I am grateful for the four essays in response to Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership and the insights they bring to the many different policy and historical narratives in the book. In doing so, they collectively point our attention to the persistence of housing insecurity and inequality in the post-1968 period. Ta’Nehisi Coates’s 2014 essay “The Case for Reparations” brought newfound attention to the phenomenon of redlining and the role of the federal government in its facilitation. It was a national epiphany. But quizzically, redlining and its attendant exclusions in banking and all forms of real estate transactions have been banned for more than fifty years. Because different patterns of exclusion continue to mar the real estate and banking industries, we continue to rely on the framework of redlining to explain the phenomenon but, often, without addressing the distinctions between the period of systematic exclusion and today’s world of professed inclusion. Race for Profit was an attempt to better understand the transition away from the exclusion of Black consumers, but on unfair and discriminatory terms. The essays included here show new and dynamic ways to extend the analysis into the future, while drawing on the past to make sense of those new directions.
I have tried to imagine this post-1968 period as one of “predatory inclusion” where conditions wrenched by disinvestment and extraction are refurbished as “risk” and become a new basis upon which to treat Black renters and buyers differently, or on, what Paige Glotzer, pithily describes as “bad terms.” There is a consequence for not telling the full story of residential segregation. It typically means that practices supporting residential segregation are only legible if we see the old signs of intentional or explicit acts of racism. But the 1968 Civil Rights Act as well as the moral power of the Civil Rights Movement has meant that, with the exception of the crass and uneducated, these raw forms of racial bias rarely show up in real estate and banking transaction. This means we must use different measures or clues to assess impact and outcome—not only the act itself—as credible evidence.
The constant search for a smoking gun of “explicit” racism continues to obscure the role of racism as a financial tool intended to shape a housing market to enhance the benefits for some while securing the manipulation and exploitation of others. Free market champions like to talk about the “invisible hand” of the market guided only by the neutral colorblind forces of supply and demand. In reality, real estate operatives and their banking brethren have not only been hyperconscious of race, they have also helped harden perceptions of racial difference in society.
For the entire history of modern real estate brokerage, the industry has been a pioneer in residential segregation driven by the racial pseudoscience of eugenics and culturally biased ideas about the nature of “good neighborhoods” and “bad neighborhoods” based on who was living there. These ideas helped etch neighborhood design and planning, dissuading the flow of resources to Black communities because they were considered lost causes. The entry points to Black homeownership were opened only as white families were lured to new suburbs, leaving behind housing that was made available to a rising Black middle class, not out of egalitarianism, but because peddlers of housing and bank loans recognized there was a new market to be constituted and exploited in the urban core by turning low-income Black renters into homeowners. Julia Rabig, in her essay, points to this productive power of segregation and the business of urban crisis during this period. Indeed, these real estate brokers and banks were open to making African Americans homeowners as long as the housing market remained segregated. Real estate and banking industries did not promote wholesale exclusion from homeownership, just exclusion from white neighborhoods.
This exploitative and extractive relationship is grist for Jessica Ann Levy’s sharp invocation of neo-colonial subjugation as a framework with which to understand the particular form of coercion experienced by poor and working-class Black families. Working-class Black renters and buyers were central prey for the extractive designs imposed upon Black urban and suburban space by the housing industry. Black communities were dominated politically by white municipal regimes often in collusion with real estate operators profiting from the substandard housing that dotted Black urban communities. The neocolonial focus on the productive work of segregation—not passive but active—in the manipulation of Black buyers and renters is crucial to understanding the persistence and longevity of our spatial arrangements.
But in other ways, the colonial framing does not work because the Black housing problem was temporary. It was born out of the particularity of the postwar order that swung from overcrowded cities to urban abandonment within the span of a generation, as whites left behind perfectly habitable properties for suburban outposts. The “spatial fix” that exploited Black renters and buyers as American cities reconfigured was temporary. Neither the outmigration of whites nor the urban rebellions of the 1960s represented an ongoing strategy for this particular kind of extraction. Black homeownership peaked at around fifty percent in the early aughts of this century and it has largely stayed within the forty to forty-five percent range it was at when the Fair Housing Act was signed in 1968. The intensification of gentrification in the last two decades in major urban districts has led to the displacement of African Americans and the reignition of a “reverse migration” of Black families back to the South. Colonialism is an economic, as well as, spatial relationship that may not exactly fit in this case.
Moreover, it doesn’t fully represent the different political responses to segregation, including a failed effort of George Romney and the homebuilding industry to push low-income Black people into the suburbs both for political and economic reasonings. Romney’s experience as governor of Michigan when Detroit rebelled in 1967 convinced him that the U.S. was on the verge of unraveling if ghettos were not deconcentrated. Debates over where African Americans should live not only raged in white suburbs but among Black activists as well, reflecting legitimate concerns that the diffusion of African Americans throughout white suburbs would dilute emergent Black political power. Of course, Romney faced steadfast opposition from Nixon who opposed what he termed “forced integration.” Suburban enclaves deployed increasingly esoteric inventions of zoning laws to keep poor and working-class Black families out of their communities.
Some historians don’t like the term “neoliberalism” as a framework. As with many frameworks, they can be misused and misunderstood, but neoliberalism remains a powerful tool in my work. The New Deal state and the Great Society fell far short in their provisions for Black families compared to how they subsidized white families, thereby dismantling systemic poverty and creating a white middle class. These did not have nearly the same impact for Black families, but their impact was meaningful enough that it led to the historic shift in Black voting patterns. Also, Black poverty plummeted from 1959 to 1974 from fifty-five percent to thirty percent.
To be sure it was still too high, but government intervention had made a difference, but so did the lack of intervention. Throughout the Ronald Reagan presidency in the 1980s, Black poverty was on average above thirty percent. Ronald Reagan honed his own war against welfare in the post-1968 era in California, arguing that government intervention in Black communities created the problem of Black dependency. The disintegration of federal intervention involved wanton malfeasance in its execution aided by state ineptitude but also the character assassination of Black women. Black families were predisposed to being lazy, they argued, but this “dependency” was also largely created by the state coddling Black families who supposedly came to expect getting something for nothing. This language and these ideas about African Americans had existed for decades prior and certainly can be traced back to the assaults against the state’s relationship to African Americans during Reconstruction. But neoliberalism’s analytic is not about its uniqueness or innovative qualities, it is about the deployment of these political and financial tools in the context of crisis in the 1970s and the perversion of the social contract in the name of the restoration of profit for the capitalist class. As Kimberley Johnson argues in her review, “under the spreading aegis of neoliberalism, the primacy of profits would become defined as the essence of public welfare.” In housing this meant the wholesale abandonment of a federal role in the provision of housing or housing assistance for poor and working-class people, while market-bound schemes reigned supreme throughout the real estate industry, replicating racially discriminatory mechanisms.