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

“…highly when it is located near desirable amenities like a park or central business district, or near socially-constructed desirable traits like communities with wealthier and whiter populations (Rothstein 2017; Taylor 2019), which has implications for access to credit and net worth accumulation.”

“This constitutes a form of what Taylor (2019) calls “predatory inclusion,” where some are allowed entry, but on unequal and costly terms.”

“…and Singhal 2019; Summers 2019; Taylor 2019).4 The valuation process primarily benefits White products, places, and people, while devaluation disadvantages non-White people (Dantzler 2021; Dantzler and Reynolds 2020; Gilmore 2002; Leong 2013; Melamed 2015; Pulido 2017; Taylor 2019; D. Wilson 2009).”

“…‘ productive ’ (read paid) and ‘ virtual ’ (read finance) economy (see Peterson, 2004), a point also recently stressed by a rising literature on the financialisation of life and debt and its gendered and racialised features (e.g. Hossein, 2016; Taylor, 2019; Natile, 2020; Cavallero & Gago, 2021).”

“…practices such as contract sales3 in the 20th century (Trounstine, 2018), predatory lending in Black communities the wake of the Fair Housing era (Taylor, 2019), subprime lending in the 1990s (Immergluck, 2009), and the practices leading up to the subprime mortgage crisis of the 2000s are…”

“Indeed, there is robust evidence of structural racism in numerous domains, including economic (Darity and Mullen 2020), educational (Tyson and Lewis 2021), political (Manza and Uggen 2006), criminal-legal (Lee 2024), and housing systems (Taylor 2019).”

“White places develop through routine extraction of resources and power, enabled through the devaluation of Black places via seemingly race neutral structures of political geography, property ownership, and public finance (Delaney, 2010; Taylor, 2019).”

“…and the movement from financial exclusion to what KeangaYamhatta Taylor refers to as the ‘predatory inclusion of African Americans in the housing market’, which she traces to the housing and credit reforms in the late 1960s and 1970s (Taylor, 2019; also see Wang, 2018, pp. 125–150).”

“(Taylor 2019, 133) The similarity ended there.”

“…documents the myriad of ways private and institutional racial discrimination has shaped US housing markets, resulting in severely unequal housing outcomes such as neighborhood access and housing cost burden by race (for example, see Reina et al., 2021; Rothstein, 2017; Taylor, 2019; Yinger, 1986).”

“…deprivation.3 The criminalization of poverty is rooted in racial capitalism, which has historically excluded people of color from access to adequate housing (Taylor, 2019; Willse, 2015), and produced white wealth through the exploitation and carceral management of surplus labor (Gilmore, 2007).”

“Or we might look instead at how racial capitalism operates at the point of consumption, such as through what Keeanga-Yamahtta Taylor (2019) has called “ predatory inclusion, ” securing land values for the real estate industry at the expense of livelihood for the Black working class.”

“…are promising efforts to redistribute wealth, provide pathways to homeownership for households of color, revitalize disinvested neighborhoods, fund public investment accounts for newborns, and finance reparations for slavery (Darity Jr & Mullen, 2020; Hamilton & Darity Jr, 2010; Taylor, 2019).”

“While Black women inhabit multiple social and political identities, as Keeanga-Yamahtta Taylor (2020) notes, “ it was Black women ’ s class position as poor workers, often domestic laborers, that gave them a vantage point from below and fueled their tendency towards radical politics ” .”

“This literature has powerfully demonstrated the connections between private financial capital, racial violence, and sociospatial inequality (e.g., Melamed, 2015) at a range of scales, from the nation (Marable, 2015) to the city (Ponder and Omstedt, 2019; Pulido, 2016) to the home (Taylor, 2019).”

“…long history of racist institutions, policies, and practices, including chattel slavery, the Black Codes, JimCrow laws, Progressive Era policies in northern cities, housing and lending policies, and the police and criminal justice system (e.g., Hinton 2016; Kendi 2017; Muhammad 2010; Taylor 2019).”

“Its proponents argue that a home’s exchange value is racially-spatially structured such that homeowners living in spaces marked as Black do not enjoy the rates of home price appreciation as those living in spaces marked as not Black (Darity et al., 2018; Perry et al., 2018; Taylor, 2019).”

“lending process can be seen as an instance of predatory inclusion [76, 87, 88].”

“…a broad range of topics including, but not limited to, incarceration (Gilmore 2007), real estate (Fields and Raymond 2021; Korver-Glenn 2021; Taylor 2019), evictions (Immergluck et al., 2020; Raymond et al. 2021; Michener 2022), gentrification (Boston 2021), urban agriculture (McClintock…”

“…silence sharply contrasts with the burgeoning literature on the intersections of race and debt, including recent studies of the racialized impacts of financial crisis, austerity, and financial practices such as subprime lending and ‘ redlining ’ (e.g. Chakravartty & da Silva, 2012; Taylor, 2019).”

“This undermined intergenerational Black wealth accumulation, and set the stage for later rounds of predatory extraction (Dymski, 2009; Taylor, 2019).”

“In short, as Walker (2019) points out, and as highlighted by the racial capitalism thesis as well (see Bonds, 2019; Pulido, 2017; Williams, 2020), by the 1930s it was clear that racial segregation “was good business for an important sector of capital” (also see Taylor, 2019a).”

“…a product appropriate to the people it was meant to serve.9 Instead, Net1 exploited South Africa’s sedimented racial geographies to ‘predate’ (Taylor, 2019) upon the social grant incomes of black and coloured women.10 Contrary to understandings of debt as divisive and individualizing,…”

“…credit risks if alternative (i.e., non-credit related) behaviors were taken into consideration (Wherry et al., 2019) or claims that minority borrowers encounter predatory lenders who deny them access to conventional loans corresponding to their achieved scores (Massey et al., 2016; Taylor, 2019).”

“Still more, even when formal barriers to inclusion were dismantled, real estate fi rms engaged in what Taylor (2019) calls "predatory inclusion," or extending homeownership to Black Americans under terms unlikely to provide the bene fi ts a ff orded to white home-owners (such as the accretion of…”

“More broadly, there are sophisticated analyses of housing markets that show the role of key institutions, actors, and histories in the creation and maintenance of the American housing system (Ashton, 2009; Rothstein, 2017; Taylor, 2019).”

“…profit extracted through evolving predatory mechanisms predicated on the creation of captive housing consumers (Connolly, 2014; George et al., 2019; Taylor, 2019; Ture and Hamilton, 1992 [1967]; Satter, 2009), analyses of ground rent in urban geography continue to treat decline primarily as a…”

“…minoritized groups in the United States are apparent in research on income and health disparities (Mohatt et al., 2014; O’Connell, 2012; Taylor, 2019), in addition to more recent research that affirms the existence of intergenerational trauma as a psychosocial phenomenon (Cerde ~ na…”

“Redlining, racial covenants, and racial violence are all well-documented practices of racial capitalism (Anderson 2016; Rothstein 2017; Taylor 2019) that continue to shape the racism and class inequality of U.S. neighborhoods, particularly through the normalization of disinvestment in Black places.”

“…historically engineered segregation and unequal wealth accumulation through the racial categorization of people and places (Dorries et al., 2022; Taylor, 2019), a critical line of enquiry investigates how color-blind, yet racially biased, digital technologies (Benjamin, 2019) renew inequalities…”

“Whether the focus is housing segregation (Taylor, 2019), mass incarceration (Alexander, 2010; Hinton, 2016), voter disenfranchisement (Blessett, 2015, 2019), or school privatization (Benson, 2019), the benefactors of policy decisions and taxpayer investment are private industry, while the burdens…”

“…housing policies in creating persistent patterns of spatial inequality, including the iconic “residential security maps” created by the Home Owners’ Loan Corporation (HOLC) in the 1930s to indicate mortgage lending risk across American cities (Krysan & Crowder, 2017; Rothstein, 2017; Taylor, 2019).”

“These efforts to incorporate low-income renters as functional market participants contrast with the goals of housing policy for homeowners, which largely center ideas about civic incorporation and the expectations of community-engaged citizenship (McCabe 2016; Taylor 2019).”

“…that provided black home seekers with credit to purchase poor quality homes in distressed and segregated neighborhoods on unfavorable terms (Taylor 2019), we show that the rental market is similarly a site where legal, ostensibly inclusionary actions by private market actors may contribute…”

“In this regard, this paper builds on research on historical forms of exploitation in housing, particularly those oriented toward the exploitation of Black households facing deeply constrained housing options in older industrial cities (Slater, 2009; Sugrue, 2014; Taylor, 2019).”

“This cultural politics emerges from longer histories rooted in the devaluation of certain places and people, including women, racialised bodies, and the working classes, histories that have been shown to be actively embedded in urban development policies (Skeggs, 2014; Taylor, 2019; Imbroscio, 2021).”

“Like in many other parts of the world, residential control and separation have been used to exploit Black and brown labor, divide their resources and undercut their political power (Reid, 2003; Taylor, 2019).”

“…anti-Black discrimination resulting in a myriad of structural inequities in education (Orfield & Frankenberg, 2014; Rothstein, 2015), housing (Rothstein, 2017; Taylor, 2019) and job markets (Wilson & Rodgers, 2016) that have significantly disadvantaged Black families in the United States over time.”