Editor’s note: Keeanga-Yamahtta Taylor, a professor in the Department of African American Studies at Princeton University, was recently awarded a MacArthur Foundation “Genius” Fellowship for her work. This is an excerpt from her award-winning 2019 book Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership.
The Fair Housing Act was passed as part of the federal government’s response to the riots after Martin Luther King Jr.’s assassination. The condition of African American housing was identified as one of the catalysts of urban rebellions throughout the 1960s. The lesser-known Housing and Urban Development (HUD) Act was signed into law a few months later and was to massively expand the amount of housing available for poor and working-class families. For the first time, a government program to promote homeownership would be directed at Black citizens, granting them access to the same kinds of generous benefits and subsidies that had created tens of millions of white homeowners in the post-World War II era. Between the two historic pieces of legislation, the American housing market was to be revolutionized with abundant housing and new Black homeowners in thriving suburban communities.
But in reality, the private sector forces, including mortgage lending banks and real estate agents, ensured that the same principles of segregation that had girded the private housing market for the entirety of the 20th century became the guiding principles of the new HUD Act housing initiative. These same corrosive public-private relationships undermined the regulating capacity of HUD. It wasn’t just the real estate industry. White suburban homeowners and the elected officials who did their public bidding passed intricate and specific zoning ordinances that were intended to keep African Americans out of their communities.
This motley coalition of self-interested parties consistently claimed that race was not the issue, that they were primarily concerned about low-income people eroding their hard-earned property values. But the close relationships between race, poverty, and low-income status made them indistinguishable. The failures of the program to build sufficient housing beyond the urban core and open new housing opportunities for Black renters and buyers meant that the new programs added to the old problems of residential segregation. Instead of new housing, real estate agents steered Black buyers back to the urban core and back to houses in disrepair.
The eventual collapse of these housing programs not only exacerbated the existing housing problems experienced by Black people, it was also easily mapped onto the developing problems with public housing. It became the pretext to simply defund and devolve the programs while simultaneously tarring the Black families as responsible for the poor condition of the homes. Those unfair accusations were in turn used to undermine and dismiss all Black housing needs.
The legacies of these programmatic failures provided the visual cues of “urban crisis” that mark the perceptions of decline in the 1970s. Dilapidated and deteriorating buildings, growing crime, and disappearing jobs combined to paint a bleak picture of urban obliteration. The prevailing discourse transferred the imagery of urban crisis onto the bodies of urban dwellers, alchemizing an urban underclass that was also impervious to social intervention or change.
In 2019, Newsday, a daily paper on Long Island, published an investigation of racial discrimination among real estate brokers, finding that “Long Island’s dominant residential brokering firms help solidify racial separations.” For three years, “paired” housing testers—one white and one minority—worked in conjunction with Newsday and posed as prospective buyers to test whether Long Island real estate brokers were engaged in fair housing practices and treating their clientele equally. In many cases, they found the opposite. In 40% of their test cases, reporters found that minority testers experienced disparate treatment compared to their white counterparts.
More recent stories reveal the continuation of redlining practices. In 2020, fair housing organizations filed suit against the online real estate website Redfin, accusing it of engaging in “digital redlining” by offering fewer services to homebuyers and sellers in minority-majority neighborhoods compared to those offered in white neighborhoods. Investigations into redlining practices in 2018 found that African Americans were denied mortgages at much higher rates than whites in 61 metropolitan areas.
Since the economic crisis of 2008, creditors have made access to mortgage capital even more restrictive, complicating efforts for Black buyers to regain a foothold in the housing market as owners. Over time, this has resulted in stagnant rates of Black homeownership that never exceed 50% of the Black population.
When Black people aren’t excluded from purchasing homes, the homes they are able to buy are still valued differently and thus don’t carry the same benefits that homes in the possession of white people do. A 2018 Brookings Report concluded that homes in Black-majority communities are undervalued, on average, by $48,000 per home, costing African Americans upward of $156 billion.
It is an astounding confirmation of the way that institutional racism girds our society. The undervaluing of Black homes has steep financial consequences. If homeownership is intended to weather the financial crises that ordinary people encounter over the course of their working lives, then the systemic undervaluing of Black homes leaves Black families vulnerable to financial crises, predatory lending, and potential home loss.
Today, there are renewed fights over very old questions, especially when it comes to racial redress. In the summer of 2020, millions of Americans engaged in rebellion and furious protest as police brutality lit the fuse of a much larger constellation of grievances, entrenched housing insecurity for African Americans chief among them. But the constraints on access to Black homeownership overlap with the troubles of Black renters. More than half of African Americans rent their homes, making them particularly vulnerable to the ever-rising costs of rent compared to the stagnation of American wages and salaries. African Americans also make up at least 40% of the homeless population in the United States, the most profound expression of the housing insecurity that pervades Black communities.
One of the most pressing questions has been how to secure the provision of safe, sound, affordable, and decent housing for everyone. The obstacles have always been business’s bottom line. The eruption of struggle at the end of the 1960s put housing back on the table as a central demand of insurgent urban Black populations. The failure to resolve deep and abiding inequality in the 1960s and 1970s, including the absence of secure housing for millions of Black households, is the long prehistory to the uprising that shook the foundation of the United States in the summer of 2020. It remains to be seen whether the same kinds of policy innovations arise out of this contemporary movement.
From Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership by Keeanga-Yamahtta Taylor. Copyright (c) 2019 Keeanga-Yamahtta Taylor. Used by permission of the University of North Carolina Press.
Recognize your brand’s excellence by applying to this year’s Brands That Matter Awards before the early-rate deadline, May 3.