Let the Buyer Beware

One major problem with the HUD’s response to the urban housing crisis was the quality of the homes made available to working class and poor African Americans. While affordable housing was a government goal, it relied on private businesses that operated in the interest of profit. Additionally, the business of home appraisal was based on the assumption that property value decreased with proximity to African Americans. This racist ideology greatly limited the housing options of working class and poor African Americans. Homes with major issues were deemed inhabitable and sold. Unsuspecting buyers often did not have the disposable income to keep up with home repairs and mortgages. Mortgage lenders made a habit of profiting off houses that went into foreclosure quickly. The HUD was unable to effectively address the predatory practices of the private sector because of low staffing, over-extension, and anti-black racism within the organization.

Predatory Inclusion

Homeownership in the U.S. is often touted as a means to escape poverty, build wealth, and fully participate in American society. However, racism in the broader American society ultimately resulted in a racist housing market that excludes Black people from homeownership and depresses the value of property inhabited by African Americans. The perception that Black buyers are risky has continued to fuel predatory practices in real estate. The author notes that African Americans should not be limited to the rental market because of inequality in the housing market. Instead, she suggests people should question American society, a society in which full citizenship is reliant upon home ownership.

Homeowner’s Business

In the late 1960’s it was common knowledge that the nation’s urban areas, mostly inhabited by African Americans, were plagued by poverty and unrest. The Lyndon B. Johnson administration felt the urban housing issue could be solved with a marriage between the private and public sectors. For decades the Federal Housing Administration (FHA) barred African Americans from homeownership by claiming they were too financially risky to receive the same services from the real estate and banking industries as Whites. The passing of the Housing and Urban Development (HUD) Act of 1968 eliminated this perceived risk by allowing low interest mortgage loans that were fully backed by the federal government. Finally, African Americans were given access to conventional real estate practices and mortgage financing. However, ingrained racisms within the government and private sector ensured African Americans were incorporated into the housing market on more expensive and unfair terms than White Americans. The author refers to this phenomenon as predatory inclusion.

Unsophisticated Buyers

As the HUD failed to provide adequate housing for African Americans, officials and media increasingly placed the blame on the African American homeowners. In many cases the focus was on African American women. Instead of attributing an abundance of foreclosures to the selling of dilapidated housing and the inability of tenants to pay for extensive repairs, people claimed African American women were not knowledgeable enough about home maintenance and budgeting to own homes. In some places, potential low-income home buyers were educated on budgeting and home maintenance. However, the assumption that counselling could lead to better home retention ignored the systematic issues that placed Black people in inferior housing. Stories about low-income homeowners, mostly women, suing organizations for tricking them into poor residences, helped undercut the unsophisticated buyer narrative. Additionally, reports of scandal and corruption within the HUD cast a negative light on the response to the urban housing crisis.

Unfair Housing

The Great Migration saw millions of African Americans move from rural areas to cities between the 1940s and 1970s. The existence of segregated housing meant that African Americans were forced into the most impoverished residences. In the 50s and 60s, the government implemented urban renewal projects in which inadequate housing was destroyed. Subsequently, private land developers were supposed to purchase heavily subsidized land and build affordable housing for those displaced by the demolitions. Instead, land developers built housing and shopping areas for middle class clientele. Ultimately, more affordable housing was destroyed than was built, further contributing to the urban housing crisis. After the push to provide more housing for African Americans living in cities, the FHA and private companies saw an opportunity to increase profits. They knew that maintaining segregation would ultimately benefit the housing industry and in turn, the economy at large. They also realized expanding housing opportunities for African Americans would do the same. Overall, the FHA and private companies enacted practices that kept entry into White suburbs difficult for African Americans, which increased the ability to financially exploit African Americans looking for better housing.

The Business of the Urban Housing Crisis

By the 1970s, the sustained vacation of cities by White Americans shrunk the tax base needed to improve urban housing. Additionally, funding for domestic programs was compromised by the cost of the Vietnam War. The strain for resources lead to the private-public partnerships that characterized the response to urban poverty in the mid-twentieth century. The Joint Committee on Urban Problems (JCUP) was formed by several insurance companies. The JCUP provided funding for several urban development programs. The private sector had a demonstrated interest in profit and not racial integration, which would have been a natural by-product of fair housing. Ultimately, the JCUP and other private companies reinforced segregation and exploited Black potential-home owners. The author suggests that had companies been willing to build affordable housing in White suburbs and the government more rigorously enforced fair housing laws, the urban housing crisis could have improved.

Forced Integration

Because race and poverty often overlapped in the United States, discussions about housing policies often became discussions about race and class. In an effort to maintain a White, middle class base, Richard Nixon often attempted to make the urban housing issue a problem of class and not race which subverted the racial integration agenda of the George Romney-led HUD. The implementation of color-blind discourse prevented the creation of policies that addressed the racial component of the urban housing crisis. As Romney pushed for integration in the suburbs, White suburbans and conservatives in government (most importantly Richard Nixon) decried what they considered to be forced integration.

The Urban Crisis Is Over—Long Live the Urban Crisis!

George Romney announced his resignation from HUD after Nixon’s reelection in November 1972, citing the lack of integrity and honesty in politics as his reason. Nixon declared the urban crisis over despite the fact that HUD had met very few of its goals and certainly had not eradicated urban poverty. With Romney’s departure, funding and construction of affordable housing ceased and several community improvement programs were eliminated. Nixon cut billions from affordable housing and urban renewal programs despite the fact the funds had already been appropriated by Congress. Ultimately, Nixon claimed that housing issues should be solved by more local authorities. Section 8 was introduced to allow privately owned businesses to rent to public housing recipients. Unfortunately, section 8 vouchers were often not enough to move people out of inadequate housing, and private owners were not obligated to accept section 8 vouchers.