Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership by Keeanga-Yamattha Taylor (review)

The expansion of the US housing market following World War II largely benefited white Americans. Whereas rates of homeownership among whites rose from 45 percent to 65 percent between 1940 and 1960, rates of nonfarm homeownership among African Americans rose from much lower heights and at a much slower clip.¹ Despite the increase in the number of African American suburbanites throughout the 1960s and 1970s, by 1990 black homeownership was largely concentrated in older, racially segregated suburbs with poor services and low rates of property appreciation.²

The late twentieth century, then, appeared to offer a story of equal opportunity. As minority homeownership increased by 30 percent between 1988 and 1998, racial liberals cast the uptick as the fruit of civil rights reform. Mortgage bankers added that such opportunities were the inevitable result of deregulation. We now know about the terms of inclusion. As sociologist Sarah Quinn has recently summarized, black and Latino families with strong credit were “three times more likely to be given a subprime loan than white counterparts, even controlling for income.” Mortgage lenders lured borrowers through “low teaser rates that converted into volatile adjustable-rate mortgages.” If the postwar American city was made blighted by federal subsidies and the profitability of neglect, post-2008 urban and suburban landscapes were partially blighted through subprime loans to “communities of color.”³

As Keeanga-Yamattha Taylor reveals in her widely anticipated book, this is only the most recent chapter in a longer history of what she calls “predatory inclusion” (5). Race for Profit moves quickly from a postwar moment of extreme urban inequality to the urban riots of the 1960s. The riots, Taylor maintains, “finally forced the federal government to relent” (3) in its practices of redlining. Yet, if public policy brought redlining to an end, its afterlife could not so easily be exorcized. Through the Fair Housing Act of 1968 and the Section 235 mortgage, many low-income African Americans became homeowners, often in previously redlined urban neighborhoods. Predation occurred through the somewhat counterintuitive calculus of real estate agents and mortgage bankers. Working in partnership with the federal government, they “valued” low-income black women not despite their poverty but “because of the likelihood they would fail to keep up their home payments and slip into foreclosure” (5). Real estate agents and mortgage bankers would just as quickly place foreclosed homes on the market for the next low-income buyer. But there was no “rinse” in the rinse-and-repeat cycle. The house remained uninhabitable. As Taylor shows, this cycle of predation was predicated on the business model of mortgage banking—a model reliant on “maintenance fees and volume sales to make their profit” (18).

Race for Profit ends with a discussion of the 1973 moratorium on the major federal interventions that remade urban and suburban space. For Taylor, the suspension of low-income housing construction and end to urban renewal signaled a “return to redlining practices,” a “retreat from most of the civil rights commitments,” and a “movement away from” a tepid commitment to providing a decent home to all Americans (213– 214). Along the way, Taylor raises a few provocative questions: How does that which is compelled by working-class Americans (decent housing) become a form of social control (58)? Just what kind of market is this where the past weighs so heavily on the present? Why is the “cumulative effect” of “marked Black neighborhoods” so enduring that they are made “distinguishable and vulnerable to new forms of financial manipulation” (18)?

The book is brimming with many insights, but Taylor’s main argument is against racial liberalism. The outsized power of mortgage bankers and real estate agents, the recourse to public-private partnerships, and the weight of the past meant that no single law could undo racial inequities baked into the US real estate market. She...