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

“This is how, for example, the purveyors of neo-liberal urban (re)development in the United States legitimize real estate markets as race-neutral (Taylor, 2019) while simultaneously manipulating Blackness as what Summers (2019: 4) strikingly terms “ an aesthetic infrastructure of gentri fi cation ” :…”

“The discriminatory impact of these practices on homeownership of people of color persists today (Kuebler & Rugh, 2013; Rothstein, 2017; Shapiro, 2006; Taylor, 2019).”

“With regard to housing, a growing literature [14– 16] situates such things as residential displacement and segregation, and race inequities in wealth accumulation, in a long history of racist housing policies and practices enacted through racist politics.”

“In the United States, the law continues in practice to exclude Black people from its protections, even as it includes them by letter, via predatory inclusion (Seamster and Charron-Ch enier 2017; Taylor 2019).”

“On the other hand, this “predatory inclusion” (Taylor, 2019) in racialized geographies sets the stage for value extraction.”

“…designed to disproportionately impact Black Americans replicated the racial control and exploitation functions of legal segregation and discrimination, but in superficially non-racial terms (e.g., Alexander 2020; Baptist 2016; Bonilla-Silva 2018; Rothstein 2017; Taylor 2019; Wacquant 2003).”

“…a distinct racial or ethnic source of inequality, variously described as explicit discrimination, implicit bias, systemic or institutional racism, or some combination (Heath and Cheung 2007; Heath and Di Stasio 2019; Kogan 2007; Sharkey 2008; Mazumder 2014; Taylor 2019; Sampson, and Winter 2016).”

“But what is especially significant is that there is evidence that buildings sold to Black women were more likely to have needed repairs at the point of purchase than those sold to Whites, Black men, or couples (Taylor 2019; Zaimi 2021).”

“…finding reflects the ample scholarship showing even if the HOLC or historic poverty do not affect Black populations, they can still experience some degree of disadvantage that adversely affect them over time (Darity & Mullen, 2020; Freeman, 2019; J. L. Jackson, 2003; Pattillo, 2007; Taylor, 2019).”

“Subprime mortgages or large, costly student loans for low-quality, low-status higher education that lead to home foreclosure or student loan default leave many borrowers unable to imagine paying off their loans or escaping financial penalties (see also, Yamahtta-Taylor 2019).”

“…extract as much as they can from Black spaces before they reclaim them for those that can pay more, from the practices of redlining to “predatory inclusion” in which mortgage lenders, the real estate industry, and speculators exploit Black homeowners and renters (Satter, 2010; Taylor, 2019).”

“…have largely maintained authority over whether and how much public housing investment to accept; wealthy suburban areas leveraged more resources to exclude public housing construction (Taylor 2019) and developments were overrepresented in less-resourced central city neighborhoods (Trounstine 2018).”

“Segregation created a housing market that was profitable for those who did own because it was based on the exploitation and exclusion of Black people from ownership or value accrual (Taylor, 2019; Connolly, 2014).”

“public housing, homelessness, symbolic boundaries, deservingness, Hawai‘i dictated the demographic gradients of urban places, doing lasting harm to poor and minority households (Aaronson, Hartley, and Mazumder 2020; Massey and Denton 1993; Taylor 2019; Vale and Freemark 2012).”

“Over decades, planners and policymakers have limited the ability of marginalized populations to build wealth through homeownership (Dickerson 2014; Taylor 2019) and influenced the geographic relationship between Black, Indigenous and people of color (BIPOC) neighborhoods and areas of climate risk…”

“…and redlining fueled these low homeownership rates for people of color even before the Great Recession (Markley et al. 2020; Orlando 2022; Taylor 2019), predatory lenders who sold subprime mortgages more frequently to families of color, particularly Black families, were partly to blame…”

“Using their compelling narratives and comprehensive data, they orchestrated lawsuits, public awareness initiatives, and direct-action campaigns challenging the constitutional-ity and morality of the government’s segregationist housing policies (Brown-Nagin 2022; Popkin et al. 2000; Taylor 2019).”

“Such urban neighborhoods became synonymous with the Black families that occupied them (Taylor 2019).”

“However, given the literature on the unevenness of housing markets within metropolitan areas, and the forces at play, including discrimination such as racial steering, subprime mortgage lending, and uneven public investment, we also expect neighborhood housing and demographic characteristics to be associated with neig…”

“This thesis is built upon by Taylor (2019), Taylor (2020), and Imbroscio (2021) whose works theorize that racial inequality in housing markets is not simply the result of public policies and predatory fi nancial practices that lead to neighborhood dis-investment.”

“Experts have criticized HUD ’ s failure to address fair housing concerns (Taylor 2019), but state and local governments also have the capacity to enforce fair housing laws.”

“Following Keeanga-Yamahtta Taylor (2019) we can call this a form of “ predatory inclusion.”

“This remains true into the present as discriminatory real estate practices keep Black residents in and out of certain neighborhoods (Rothstein, 2017; Taylor, 2019), mass incarceration moves Black people across states and keeps them in cells (Alexander, 2010; Gilmore, 2007), wealth disparities…”

“Incorporating lower income households into housing and financial markets can reproduce and extend racialized and gendered patterns of social inequality, clearly evident in the foreclosure crisis (Dymski et al., 2013) and earlier federal homeownership programs (Taylor, 2019).”

“The residential segregation of differently racialized groups, which is both a historical process (Massey & Denton, 1993; Rothstein, 2017) and one that is perpetuated today (Shabazz, 2015; K.-Y. Taylor, 2019), is just one glaring example of how racism influences spatial arrangements.”

“…place, home, and stability in order to protect colonizer property, profit, and power (Dantzler, 2021; Dorries et al., 2022; Harris, 1993; Howell and Teresa, 2022; McKay et al., 2020), have long been central to US housing market policies and practices (Dunbar-Ortiz, 2015; Park, 2016; Taylor, 2019).”

“Althoughtherela-tionshipbetweenraceandcapitalismisofrenewedinterestinsocial science(CombaheeRiverCollective1977;DuBois2014;Gilmore2007;James1989;Robinson2000),wedonotdirectlystudy it.”

“The United States’s legacy of anti-Black violence is foundational to the production and reproduction of urban space and continues to marginalize Black communities and residents, through gentrification and other means (Kent-Stoll, 2020; Lipsitz, 2007; Taylor, 2019).”

“The housing and rental markets thus discriminate by income and race, one of the legacies of America’s “homeowning democracy” and its (public) housing policies (see e.g. Marcuse & Keating, 2006; Taylor, 2019).”

“Struggles for inclusion in such cases were fights for economic citizenship and had quintessential civic characteristics (Krippner, 2017; Robinson, 2020; Taylor, 2019).”

“Regardless of filing fee, landlords file serially against Black tenants more often (Hepburn et al., 2020), and landlords in majority-Black neighborhoods more often employ high-turnover milking strategies (Desmond, 2016; Taylor, 2019).”

“Racial disparities in education made increasingly visible by Covid are also imbricated with histories of housing discrimination (Taylor 2019) racist policing (Vitale 2017), and a judicial system that has produced mass incarceration and codified numerous forms of inequality (Cohen 2020; Rothstein…”

“…the context of credit risk assessment, digitally epidermalized proxies may facilitate a process of “ predatory inclusion ” (Chaudry, 2018; Puar, 2012; Taylor, 2019) by which borrowers racialized as Black are included within fi nance, but on terms that become wealth depreciating (Charron-Chénier…”

“…in terms of homeownership (Alba and Logan, 1992; Coulson, 1999; DeSilva and Elmelech, 2012; Kuebler, 2013; Kuebler and Rugh, 2013; Sánchez, 2019; Taylor, 2019), home values (Howell and Korver-Glenn, 2018; Taylor, 2019; Tesfai, 2016), and access to quality housing (Friedman and Rosenbaum, 2007;…”

“Alternatively, recent research on white sponsorship of Black survival present foundations as debtors and investors in the social infrastructure of Black livability (Ferguson 2013; Taylor 2019; Francis 2019; Slocum 2019: 55-75; French 2018).”

“Scholars have, however, extensively explored how land use regulations have also produced racialized spatial inequity (e.g., Massey & Denton, 1993; Rothstein, 2017; Rutland, 2018; Silver, 1991; Taylor, 2019; Thomas & Ritzdorf, 1997).”

“Rating and scoring create opportunities for what Taylor (2019) terms predatory inclusion based on risk-based extraction, as exemplified by the practice of levying “risk fees” on some tenants or shifting them into extractive housing submarkets (Teresa & Howell, 2021).”

“As systemic racism evolves and transforms, we can track the deepening of racial inequality and injustice on many metrics (Kobayashi and Johnson, 2007: 4; Mills, 2015; Taylor, 2019).”

“Racism in the United States is endemic and structural as evidenced, for example, by persistent patterns of housing discrimination (Taylor, 2019), hiring and workplace discrimination (Bertrand & Mullainathan, 2004; Mong & Roscigno, 2010; Quillian et al., 2017), and the over-and underrepresentation…”

“Furthermore, the majority of housing affordable to working-class renters comes from downward filtering within the private market, as the public sector has consistently reduced spending on the production of rental housing since the 1970s (Taylor, 2019).”

“Save for a very brief period of time during the fi rst Nixon administration, the federal government has largely stayed out of the issue of overcoming the resistance of local governments to subsidized housing (Bonastia, 2006; Danielson, 1976; Goetz, 2019; Taylor, 2019).”

“The federal government categorized homes in White neighborhoods as more valuable, more likely to appreciate, and more stable investments than comparable homes in AI/AN, Asian, Black, and Latinx communities, justifying their racism with the market language of desirability (Taylor, 2019).”

“1 Localities maintained authority over whether to accept new public housing developments, and over how much to build (Taylor, 2019).”

“We recognize the complexity of Black suburbs both as communities profoundly shaped by spatial systems of white supremacy (Taylor 2019) and as opportunities for Black placemaking, where “[sub]urban black Americans create sites of endurance, belonging, and resistance” (Hunter et al. 2016:31).”

“These terms resonate with what Taylor (2019) describes as the predatory inclusion of black communities to housing markets in the US and its racialized bias in the 1960s and 1970s, which ended up impoverishing such communities and augmenting the pro fi ts of banks and real estate industries.”

“From the 1970s, federal policy (e.g. the 1977 Community Reinvestment Act) focused on the wealth gap as derived from unequal access to financing for wealth-generating assets (Taylor, 2019).”

“…minority communities because these neighborhoods have substantially lower rates of home value appreciation, older homes, and more multifamily housing units with a lower share of homes available for purchase (Faber & Gould Ellen, 2016; Hall et al., 2015; Korver-Glenn, 2018; Taylor, 2019).”