Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership

Calvin Schermerhorn
2022 Journal of American Ethnic History  
Race for Profit is a landmark study of how structural racism transforms and reproduces disadvantages. Keeanga-Yamahtta Taylor tells a convincing story of race and capitalism in late twentieth-century urban American housing markets in transition. The book develops the theme of "predatory inclusion" of African-descended Americans in home ownership sponsored by the Federal Housing Administration (FHA) and financed by private lenders after the urban riots of the mid-1960s (p. 5, passim). One was
more » ... helmina Gause of Philadelphia. A twenty-seven-year-old Black mother of three, she could not afford a house, yet a real estate agent said there were none for rent in the neighborhood. She saved the $500 down payment, signed the mortgage, and moved in to discover that a broken pipe leaked sewage into her basement, a wall leaked rain into her house, and a backyard drain was stopped up, flooding the yard. And Gause now owned the property. Her family's experience typifies the transition from redlining to predatory inclusion. Taylor wonders, "How could a house that appeared to be falling apart also be appraised by the FHA as having any value and then approved for a mortgage subsidy?" (p. 142). Race for Profit intervenes in a historiography of race, capitalism, and urban housing that includes Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap (2017), Richard Rothstein, The Color of Law: A Forgotten History of How Our Government Segregated America (2017), Thomas Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (1996), and Rhonda Y. Williams, The Politics of Public Housing: Black Women's Struggles against Urban Inequality (2004), among many others. Before civil rights legislation including the Housing and Urban Development Act of 1968, legal discrimination excluded Black borrowers from loans, segregating urban spaces and trapping low-income homeowners, particularly Black and Latino residents, in enclaves of impoverished schools and services. Instead of exclusion, the HUD Act subsidized lenders, which encouraged them to lend to those who were traditionally excluded, particularly Black women who were heads of households. But in the shift from legal discrimination to predatory inclusion, brokers and lenders worked to sell substandard and unsafe housing to homebuyers who found themselves saddled with debt in a home they owned but could not safely live in. Black borrowers set up to fail lost their property at a moment in the 1960s and 1970s when urban areas became targets of renewal projects and other investment. Race for Profit explores how the change from exclusion to homeownership occurred. Taylor's narrative seamlessly weaves stories like that of the Gause family with Black women's organizing, policy-making, and an eagle-eyed view of the
doi:10.5406/19364695.41.2.12 fatcat:fxr7pztiyfguhlxhkk5oqjyfw4