Among Chicago’s many notable histories, one narrative in particular stems from real estate. Issues like redlining (the practice of systematizing discrimination based on where one lives), housing projects and segregation persist within that space — and their effects still resonate.
It was this space in particular that Keeanga-Yamahtta Taylor, an assistant professor of African American studies at Princeton University, wanted to explore in her recent book, “Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership.” As she wrote, she scrutinized the level of segregation unique to Chicago (she considers it “overwhelming”), the historical lineage that preceded the collapse of the housing market in 2008, and the role the private sector plays in it all.
“The fascinating part of the journey of writing a book like this is really trying to understand where these processes break down and why they break down,” Taylor said. “And also be informative as to how one can foresee fixing the problem.”
The issue — and Chicago’s part in it — is something Taylor grappled with while studying at Northwestern University.
“I remember driving into Chicago from the east (coast), and it is just miles of black neighborhoods,” Taylor recounted. “You go for miles when you live on the South Side without seeing white people, and when you do, you’re like ‘What are you doing here? Why are you here? What’s going on?’ And I wanted to understand why and how that happened.”
In the waning years of the 1960s, a group of Chicagoans banded together to form the Contract League Buyers, which fought against predatory practices and redlining in the city.
But the fight is far from over.
A Northwestern University study published this month found that discrimination in terms of mortgage loan denial and costs has not declined much over the last four decades; black and Hispanic borrowers are still more likely to be rejected when they apply for a loan or receive a high-cost mortgage.
In line with such statistics, Taylor’s research examines race and public policy through the lens of the federal government’s promotion of single-family homeownership in black communities. “Race for Profit” explains how, after the urban uprisings in the late 1960s, bad policy through the Federal Housing Administration, coupled with malicious processes within the mortgage, insurance and real estate industries, ultimately exploited black homeowners instead of delivering on the American Dream that homeownership promised the white population.
Instead of low-income housing programs of the 1970s eliminating exclusion from homeownership for the black community, they gave rise to predatory inclusion, Taylor attests in her book. African Americans were welcomed into institutions from which they were formerly excluded because they could be financially exploited. Predatory inclusion was evident when black buyers were granted access to conventional real estate practices and mortgage financing, but on more expensive and comparatively unequal terms, she said.
“The end of explicit racist exclusion ushered in a period of predatory inclusion where the segregated housing market continued because it was profitable,” Taylor said at a University of Illinois at Chicago speaking engagement in October. “There’s an incentive to take people who, at one point, were considered too risky, and now they’re attractive because they are risky.”
We spoke with Taylor about policy, race and the institutional forces that continue to increase the racial wealth gap and keep residential segregation in the here and now. The interview has been condensed and edited.
Q: You focus on private/public intersectionality being the crux of the housing problem then and now. Can this ever be resolved, and can affordable housing become a reality?
I get asked the question, “What can we do?” repeatedly. There are two things: If the U.S. government would actually enforce its own laws regarding racism and discrimination, that would go quite a long way toward relieving some of the hardship experienced by African Americans in the realm of housing.
The explicitness of racism in real estate cannot be underestimated. A Memphis-based lawsuit against Wells Fargo is only the most recent example. In 2010, they were referring to loans to black people as “ghetto loans” and referring to black people as “mud people,” and they had an incentive system set up around offloading bad loans onto African Americans. These things continue to happen in the light of day, 50 years after the passage of the Fair Housing Act.
The second part is really coming to grips with the contradiction of the public/private partnership. The public sector is set up to protect the public’s interest, the public’s welfare. The real estate industry, whether you like it or don’t like it, is (centered on the goal to) “buy low, sell high” and make a profit. That’s what it is.
We’re trying to fit those two together, public interest and making a profit, but they don’t work in housing, in education, in the distribution of health care, in the distribution of water. Until we deal fundamentally with that contradiction — trying to fit a square peg into a round hole — we will continue to see these problems recur.
You don’t need a total transformation of society to create equitable housing for people. We have come to believe that equitable housing is just some weird thing that can’t happen here, and the reality is that we have the resources to create the kinds of housing outcomes that we say we desire.
The way to get that has everything to do with connecting the energy on the ground to a different vision for our society — one that has housing justice, equity and housing security at the heart of it. The resources and the money are there, but there’s a lack of political will from the unfortunate millionaire class that dominates our politics. The only way our desires become legible and visible is through grassroots organizing and activism, and that is a calculus that has never changed.
Q: Given the history surrounding people of color and housing mobility, is the American Dream a fallacy?
I think the American Dream for most working-class people in this country is a fallacy. Homeownership for white Americans has led to greater opportunities and greater stability. If you have a housing market, in order to make it functional, it has to work for someone.
But for African Americans, the pursuit of home ownership has produced wildly different results, even though it is constantly, to this day, prescribed as the way to end the racial wealth gap and increase black prosperity.
It’s almost a savagely cruel joke to say to African Americans that the reason there is a racial wealth gap is because of the disproportionate levels of black homeownership, and then tell black people they need to continue to pursue homeownership to make up that gap — which of course never allows for interrogation of what happens with black people who do have property.
How do we answer this question of why property in the hands of black people seems to be valued differently than property than in the hands of white people? And if this differential continues to exist, why do we continue to prescribe homeownership as a solution to anything in this society?
I think now is an opportunity to really unpack a lot of mythologies at the heart of our society, whether it is homeownership or the notion of hard work as the key to success in the U.S.
Q: The election is coming up. Is there anybody talking about what you’re talking about when it comes to affordable housing?
Democratic candidates have worked harder to create some programmatic language around housing that does actually go beyond some of the typical talking points. Bernie Sanders is the only candidate who mentions residential segregation as both a problem and a problem that should be fixed.
I think that taking up the issue of residential segregation is an important thing to actually free up potential black buyers or renters to access the entire housing market and not be trapped in particular locations. I also think that Sanders’ discussion of increasing the federal government’s involvement in the production of housing and creating social housing is incredibly important. We need to move more toward getting the private sector out of the production of our low-income housing, because it’s not being built because it’s not profitable.
Sanders has talked about building millions of units of social housing, but the idea of public housing in this country has been so distorted because the effort in the earlier part of the 20th century (to build public housing) was such a spectacular failure. That project took on a particular characteristic because of the influence of the private sector, which did not want to compete with public housing for renters or with low-income buyers.
But it doesn’t have to be like that. I think, given the persistence of the housing crisis in this country, we have to begin to think in different ways about producing housing that is equitable and actually affordable in the real-life, lived experiences of the people who need it.
Join our Chicago Dream Homes Facebook group for more luxury listings and real estate news.
