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NPR’s Ailsa Chang chats with writer Keeanga-Yamahtta Taylor about racist real estate practices that secured racially accumulated wealth, even after housing discrimination became illegal.
AILSA CHANG, HOST:
This week, we’re celebrating NPR’s 50th anniversary, launching a series we call We Hold These Truths to examine what works and what doesn’t in American democracy. And one of the foundations of democracy, without a doubt, is property. You see; there was a time when owning property was required just to participate in this democracy. Yet we started out as a nation that saw black people as property, like three-fifths of a person.
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There is also an assumption in this country that owning a home is the best way to build intergenerational wealth. But more than a century and a half after slavery ended, property eludes black Americans more than any other racial group. In fact, the gap between white and black ownership is greater today than it was in 1960, when racial discrimination in the United States was still legal.
CHANG: So this week, we’re going to take a look at the structural forces in government and the real estate industry that have denied black Americans a fair chance to fulfill the American dream of homeownership. One person who has spent many years thinking and writing about this is Keeanga-Yamahtta Taylor. She wrote the book “Race For Profit”, a 2020 Pulitzer Prize finalist, and she’s going to help us open our series. We started our conversation by explaining why homes owned by black Americans do not accumulate value in the same way as homes owned by white people.
KEEANGA-YAMAHTTA TAYLOR: The market is a reflection of social attitudes in our society. I think sometimes we are led to believe that the market is this neutral space where supply and demand are the only thing that dictates how it works.
CHANG: Yeah.
TAYLOR: And that’s just not true. The market is a reflection of what we see as valuable, what we see as desirable, what we see as undesirable. And it’s impossible to measure that without considering race in the United States.
CHANG: And there’s a long-standing practice in real estate to associate race with the perception of risk, which means it’s considered riskier to lend to black homebuyers. Can you talk about how the government has helped perpetuate this perception through redlining?
TAYLOR: So redlining is a practice that developed from public policy in the 1930s. And basically the federal government – in response to the Great Depression, where millions of people lost their homes and the banks. were no longer willing to lend money – created programs to help people refinance their homes. So the federal government was considering, what is a good area for us to refinance home loans from people in this community? And later, what is the right area to guarantee us a mortgage?
And so you have the federal government acting as an insurance agency, and that meant they created color coded maps that date back to the 1930s. The most popular areas on those maps were blue, green. , yellow, then red meant that an area had very old and dilapidated buildings. It was unlikely that value would accumulate in these properties. And it was also to indicate what types of people were settling in those areas, whether they were African Americans, immigrants or other undesirable populations. And that desire has been built around the notion that some people are good for property value and some people are bad for property value.
And that helped really dictate where other companies would invest, and this is really when divestment and all the consequences that come with it really get etched into politics. And we continue to see the reverberation of those public policy decisions made in the 1930s today.
CHANG: Exactly. Consequences flowed from these decisions. This perception that it’s a greater risk to lend to blacks – I mean, you wrote about how it ends up becoming a kind of self-fulfilling prophecy for black homeowners, evidence that we can see today. .
TAYLOR: Yeah, no, that’s exactly it. It becomes a self-fulfilling prophecy where – if the federal government has refused to support mortgages in these areas, signaling other companies not to participate economically in these areas, then it means there are higher levels. dilapidated and deteriorating housing because it was not only large mortgages that blacks were excluded from, but the Federal Housing Administration was also giving white homeowners small maintenance repair loans so they could cope the maintenance problems of their house.
Thus, African Americans and other people living in Category D areas marked in red on these residential maps are also excluded from small repair loans. And so that means the housing is in greater distress, is in greater disrepair. Lack of investment means there are fewer jobs. These neighborhoods therefore look depressed. But people passing through the neighborhood do not understand the public policy decisions that have been made that created these conditions.
CHANG: Yeah.
TAYLOR: All they see are African Americans living in these neighborhoods. The buildings are overcrowded. They are in bad shape. And so it merges with race.
CHANG: Right. So far we’ve talked about the financial hurdles faced by black Americans who want to accumulate real estate wealth and the divestment that comes with it. But there have been other kinds of barriers preventing black people in this country from owning homes. Let’s talk about racial restrictive covenants. Briefly explain what it was about.
TAYLOR: So when a property is sold, there’s an endorsement included in the deed that says that property can only be sold to other white people. And he would list who would be excluded from the sale. Sometimes it was Jews, different immigrant or ethnic groups, but it was mainly a tool to exclude the sale of African Americans.
And the reason the alliances became popular is that there was an initial effort by municipal governments to use what was called racial zoning, where the municipal government could come up with racially designated blocs within a community and say that white people live here; Blacks live there. But a 1917 Supreme Court ruling said it was a blatant violation of the Fourteenth Amendment, and so the real estate industry switched to using racial restrictive covenants as a way to keep African Americans out. legally excluded from white communities.
CHANG: And, you know, even after racial restrictive covenants were ruled inapplicable by the Supreme Court in 1948 and even after redlining was abolished by the Fair Housing Act in 1968, the imprint of these racist policies and practices remains. So I’m curious. How do you see the government and the private real estate industry working together to prevent black Americans from owning homes?
TAYLOR: Well, that’s part of the problem. I mean, you can’t have 35, 36 years of legal discrimination and then declare it over and expect the legacy, history and impact of these policies and practices to disappear overnight.
CHANG: Yeah.
TAYLOR: They have lasting effects that continue to mark African Americans as irresponsible landlords, neighbors. It is used to refer to African Americans as, in quotation marks, “subprime.” It helps to constitute blacks in credit risks. And all of these factors in the differential treatment of African Americans in the housing market. So that’s an underlying explanation for what I call predatory inclusion, which is that African Americans are no longer left out of the market. Now they are included.
CHANG: Yeah.
TAYLOR: But this whole exclusionary thing creates the basis on which black people are now included but on different terms with subprime loans, for example, paying higher interest rates, paying more fees due to cumulative impacts of these policies and practices over these several decades, reconstituted their districts as risky, reconstituted them themselves as credit risks. And with the risks comes the legal pretext for treating black consumers differently. So you can be included, but you have to pay an additional price to do so.
CHANG: Keeanga-Yamahtta Taylor is a professor at Princeton University and author of “Race For Profit: How Banks And The Real Estate Industry Undermined Black Homeownership”.
Thank you very much for lending us your time.
TAYLOR: Thanks for having me.
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