Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership chronicles an often overlooked period in the affordable housing literature to show how the shift from racially exclusive housing policies in the 1940s and 1950s (where it was nearly impossible for Blacks to buy high-appreciating homes using low-cost and low-risk federally insured mortgages) to a regime of more inclusive policies in the late 1960s and 1970s laid the foundation for Blacks to lose massive housing wealth decades later during the 2007–2009 Great Recession. While the book was published pre-COVID, historian (and 2021 MacArthur Fellow) Keeanga-Yamahtta Taylor's damning criticisms of federal housing policies that are centered on selling homes help explain why low-income renters faced significant eviction risks during the pandemic.
Taylor cites congressional testimony, agency reports and advertisements, newspaper and magazine articles, and photographs to describe federal housing policies in the 1960s and 1970s that were designed to rescue poor Black renters from rat-infested and crime-ridden public housing projects in deteriorating center cities. Though these ostensibly inclusive and colorblind housing policies helped some poor Black renters buy homes, poor renters then (and later during the COVID-19 pandemic) have never had long-term housing stability or access to housing in high-opportunity neighborhoods principally because federal housing policies have never sought to advance fair housing goals including integrating suburban neighborhoods or guaranteeing that low-income renters have access to safe and stable affordable housing.
Taylor argues that the Nixon administration was motivated to help poor Black renters move out of rundown and dangerous public housing projects primarily because of the political imperative to end the urban riots that were threatening the financial success of commercial corridors. Once the riots stopped, so did any serious interest in advancing truly inclusive federal housing policies. In fact, instead of finding ways to increase the supply of public housing, the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) adopted federal housing policies, which continue to this day, that depend on public-private ventures (like Housing Choice vouchers) to house the poor. In fact, the book's greatest contribution to the affordable-housing literature is Taylor's blistering account of Nixon administration decisions that forever ceded control of federal housing policies to private mortgage bankers, real estate agents, home builders, speculators, and appraisers (a cabal I label the real estate industrial complex, or REIC).
Allowing REIC members to decide the fate of poor Black renters was destined to have catastrophically negative effects since many of them had participated in creating and advancing the racist housing policies in the 1940s and 1950s that fair housing laws in the 1960s and 1970s were intended to reverse. Stressing the near impossibility of converting the “arch villains of covert segregation to superheroes of fair housing,” Taylor details the ways REIC and virtually all FHA and HUD administrators blocked efforts to building housing for the poor in suburban neighborhoods even though expanding the supply of affordable housing outside of center cities would have been the best way to give poor urban Black renters access to higher-quality housing and better long-term employment opportunities (p. 135).
Taylor criticizes FHA and HUD housing officials for embracing the racial liberalism notion that color-blind U.S. systems and institutions will protect Blacks in private market real estate transactions if they were willing to work hard and play by the rules. Nixon housing officials staunchly maintained that there was no need to force integration in white suburban neighborhoods since federal laws banned explicitly racist housing policies and Blacks could now participate in color-blind real estate transactions that would spontaneously cause them to find safe and affordable housing. The book resoundingly refutes these fallacies, concluding that “racial inequality was structured and embedded within the architecture of the system of buying and selling real estate in the United States” and there has never been a time “where racial discrimination had not prevailed as a defining industry practice.” (pp. 7, 144).
Federal officials (with perhaps the exception of George Romney, former Michigan governor and HUD secretary in the Nixon administration) consistently abandoned poor Black renters and took a hands-off approach when appraisers artificially inflated the value of homes that often lacked heat or running water or when realtors misled poor Black renters into believing that the appallingly dilapidated and often uninhabitable homes they were buying using federal subsidies would be repaired before the closing date. Rather than remove lower-level housing officials who were ardent segregationists, or prevent unscrupulous REIC actors from deciding the housing fate of urban Black renters, FHA and HUD administrators embraced the view that poor Blacks were to blame for being too unsophisticated to be home buyers or too dysfunctional to maintain the (dilapidated) homes they bought. Likewise, despite broad evidence of fraud and deceit, federal officials cavalierly suggested that Blacks who complained about the deplorable conditions of the homes they bought with federal subsidies were simply being ungrateful, even though these homes were often in no better condition than the public housing projects the buyers were fleeing.
A constant theme in the book is that the federal government is motivated to increase Black homeownership rates only when it is politically expedient (e.g., to quell urban riots) or when increasing home sales help the REIC. This remained true even after Nixon left the White House, as the Clinton and George W. Bush administrations sought to increase Black and Latino homeownership rates in the late 1990s and early 2000s primarily because white home-buying rates stalled and sluggish home sales threatened the profitability of the REIC and the stability of the U.S. economy. While Black and Latino homeownership rates increased during the 2000s housing boom, those increases were short lived, as the 2007–2009 Great Recession wiped out all housing gains for Black families. Like the Blacks who lost their homes in the real estate transactions depicted in Race for Profit, Blacks borrowers were again steered to high-cost and often predatory subprime mortgage products that were profitable for the REIC but financially devastating for them.