By Jeremy Dewar
‘RATS CAUSE RIOTS! Rats cause riots!’ chanted protesters as they stormed the Michigan House of Representatives in 1967. Weeks earlier Detroit had witnessed one of the fiercest of the uprisings that had erupted across the States that summer. Even the Republicans had to admit there was an ‘urban crisis’ and substandard housing was at the heart of it.
Up until then US housing policy had been run by the notoriously racist Federal Housing Administration (FHA), which backed the practice of ‘redlining’, the refusal of credit and mortgage-lending to African Americans. Over the decades this led to two phenomena: the influx of millions of Black families escaping Jim Crow in the South settled in the ghettos of northern cities; and white families moved out to the suburbs to inhabit new builds, a process known as ‘white flight’.
After WWII this was exacerbated when the FHA underwrote mortgages for working class families to buy new houses, previously the preserve of the middle classes… but only for white families. Between 1945 and 1959 only 2% of state-insured home loans went to Black families. To this day, home ownership and their values constitute the main financial difference between the economic situation facing America’s Black and white populations.
The civil rights movement sounded the death knell for redlining. One of the last acts of Lyndon Johnson’s administration was to pass in 1968 the Housing and Urban Development (HUD) and Fair Housing Acts. Surprisingly Richard Nixon appointed a liberal, George Romney, to head the HUD department with an enormous budget. It is here that Taylor starts her story of the five-year experiment in integrated homeownership and urban renewal.
Fair housing?
In his first two years in post, Romney introduced two programmes, Open Communities, which attempted to break down barriers to Blacks moving into the white suburbs, and Operation Breakthrough, a breakneck housing programme with a target of creating 26 million housing units over 10 years. The first proved a failure, while the latter, although partially successful, turned into a disaster for the working class and the poor.
Romney started off fully committed to mixed race neighbourhoods, even borrowing from Gill Scott Heron’s song Whitey on the moon to contrast the USA’s expensive lunar programme to its neglected inner city slums. But he relied on a public-private partnership which left the housing market firmly in the grip of the FHA, which was merged into the HUD, the mortgage banks and real estate agents.
These were not committed to racial justice; quite the opposite, they retained redlining in practice by discriminating on financial and supposed cultural grounds. Although legislation opened the market to working class families, even to Black single mothers on benefits, white workers could bid for homes in the suburbs, Black workers only had the option of housing in the ghettos.
Estate agents valued properties higher if they were in all-white communities and refused to lend to non-white house hunters because this would lower the value of suburban homes in their portfolio. Local authorities used phoney ‘zoning’ regulations to stop new developments next to existing white communities. Racists started riots to force Black newcomers out.
The practice of ‘blockbusting’ furthered segregation. Speculators would determine inner city neighbourhoods to be ‘ripe’ for busting. In the words of one such property flipper,
‘I make my money—and quite a lot of it incidentally – in three ways: 1) by beating down the prices I pay to white owners… 2) by selling to eager N––––s at inflated prices; and 3) by financing those purchases at what amounts to a very high rate of interest.’
In reality very few new housing was build in the inner cities; demolished slums were generally replaced with shopping malls or offices, which offered construction companies higher returns. Instead slums, including those that had just been condemned as unfit for human habitation, were sold to unsuspecting Black families who found themselves frozen out of the rental market. They then found themselves liable for all repairs for dysfunctional or non-existent plumbing and wiring, rotten roofs and floors. The rats multiplied.
Worse, the mortgage banks found that they got a higher profit by ending Blacks’ mortgages sooner in a process called ‘fast foreclosure’. If just one mortgage payment was just one day late, they would start eviction proceedings through the courts. This enabled them to reclaim the state-backed full mortgage value and flip the unit, unrepaired, to a new unsuspecting buyer. In this they were assisted by racist ‘appraisers’ (part-time state employees, whose day job was in real estate), many of whom deliberately undervalued inner city properties, only to re-sell them at inflated prices.
Fightback and demise
Taylor highlights the role of Black single mothers in fighting against these terrible conditions and the financial burden they were left bearing. Concerned Homeowners groups sprung up first in Seattle, then in Philadelphia, Detroit and nationwide. They took the HUD to court for their failure to repair their homes before sale, to ‘counsel’ or assist homebuyers in navigating the housing market, and for the racist practices of the FHA, which had never been reformed from the days of redlining.
These activists won a series of victories and forced through some reforms inside the HUD-FHA. However, their victory was short-lived because Nixon immediately after his re-election reined in the HUD and wound up the Open Communities programme. The crook, as he was soon to be exposed, declared the urban crisis was over, that there was no need to desegregate neighbourhoods because Blacks and whites wanted to live separately, and that federal funds were the problem, not the solution, as they fostered dependency.
Romney went along with this rhetoric and started defending the HUD’s performance by laying the blame not on poor housing but on ‘people with problems’, primarily drug dependency, crime and work shyness. In short, ‘dirty’, ‘lazy’ Blacks were to blame for their own poverty and segregation into ghettos. In August 1974, five years almost to the day after the HUD Act, Nixon killed the subsidy programme aimed at increasing Black homeownership.
Not only did Gerald Ford, Nixon’s successor, but also Democrat Jimmy Carter continued to turn their backs on the inner cities. Milton Friedman, architect of neoliberalism, wrote an essay, What is killing the city?, ‘Government spending is the problem, not the solution… We need to abolish the old [HUD] programs and let people spend their own money in accordance with their own values.’
Lessons
The debris the public-private HUD programmes left behind in the city centres was crushing: 100,000 abandoned housing blocks in New York alone; white families still nearly twice as likely to own their home than their Black counterparts; most manufacturing jobs having moved from the urban centres out to the suburbs; residential segregation and wealth disparity more pronounced than ever.
Taylor gives the subheading ‘Against homeownership’ to the last section of her final chapter. In it she regales against the place homeownership has in the mythology of the American Dream, and how it turned into a nightmare for millions of Black Americans. But she goes no further.
In Britain we have much to learn from Taylor’s exhaustive study. The Grenfell fire which incinerated mainly non-white families and the high death toll covid caused in overcrowded Bengali households are two reminders that race here today still plays a huge role in determining living conditions. But housing is one of the main problems facing working class families of all so-called ‘races’.
As Labour prepares its Renters Bill and to roll out its 1.5 million house building programme, we need to put working class control of every step of the process at the top of our agenda. We need rent controls, set by tenants organisations and trade unions at rates we can afford; we need inspections of slumlord properties by unions and tenants; we need to abolish evictions and confiscate empty and dilapidated properties.
We need to nationalise under workers control and without compensation the giant property developers and construction firms, so our homes are safe, ecologically sound and in areas where jobs can be found. Mortgage brokers and estate agents, who are every bit as racist here as in the US, need to be nationalised and amalgamated too, so we can end discrimination and establish fair pricing. Instead of evicting those who fall behind, the house should be brought under municipal control and rented to the same dwellers.
And we should demand that all the 1.5 million new housing units are build for rent, with tenancies that protect the families who live in them and give them rights to access quick and thorough repair and refurbishment.
Above all, however, we need someone to write as good a book as Race for profit to explain and expose the 40 years of degradation and privatisation of the housing stock since Thatcher’s Right to Buy scheme was first introduced.
