Where the FHA had once excluded African Americans from participating in the conventional real estate market, it now made Black buyers vulnerable to new exploitative and predatory practices. These public-private partnerships provided methods for the extractive relationship between African Americans and capital.
Very quickly, brokers and bankers wielded the new homeownership programs to enrich themselves while leaving poor Black families homeless with shattered credit. Speculators and real estate brokers took hold of dilapidated urban properties, performed cosmetic repairs, then flipped the properties to Black families, often headed by Black women. The terms of the programs had allowed mortgage bankers to be repaid in full if the owners went into foreclosure, and because mortgage payments were tied to the income of the owner—not to the value of the house—appraisers working for the FHA were easily enticed to take bribes to inflate the value of the city houses. Mortgage bankers who made their money on originating mortgages and other fees were quick to foreclose, recoup their investment, and begin the practice all over again. Everyone got paid except the poor and working-class Black families who were preyed upon. And within a few years, nearly seventy thousand homes had fallen into foreclosure and tens of thousands more were in default, meaning they were only a few payments away from foreclosure.
As news of the fraud and corruption in these programs peaked in 1972, headlines rarely got the story right. The real story was that the real estate industry and mortgage bankers were fleecing African Americans with an assist from an utterly passive federal government. The government’s failure to seriously enforce its own fair housing laws—as demonstrated by the paltry funding appropriated to fight racist housing discrimination—had left Black buyers and renters vulnerable to the racism of the real estate industry. Instead, members of Congress, the media, and the private sector itself pinned the crisis in the programs on the disproportionately Black program participants. Everyone involved described Black mothers, in particular, as “unsophisticated buyers,” even as white businessmen, a U.S. senator, and multiple agents working within the FHA were indicted for conspiracy and fraud.
In 1973 Richard Nixon used the scandal surrounding the HUD homeownership programs as an excuse to impose a moratorium on all subsidized housing programs. Nixon dismissed HUD as the nation’s “largest slumlord” and argued that HUD’s crisis was proof that local government, as opposed to the federal government, should make its own decisions regarding housing. It was an argument fueled on “common sense” that confirmed the suspicion and hostility with which federal programs were held.
Nixon and his replacement, Gerald Ford, used the failures of the 1968 HUD Act to hoist their new approach to low-income housing and urban development: the Housing and Community Development Act (HCDA), passed in August 1974. The HCDA deployed “block grants,” instead of direct federal appropriations, to fund federal programs. Block grants were “blocks” of money sent to localities, which would decide how the money was spent. While this fed into the folksy notion that locals knew better, it ignored that for decades African Americans had called on the federal government to protect them from the unchecked, abject racism in local governments.
The legislation also acquiesced to the segregative impulses that had guided much federal decision making regarding housing policies. Ford decided to focus on “existing” housing instead of new building for low-income housing, willfully conceding the status quo. All too often “existing” or used housing was in cities, while new construction was affordable only in outlying and mostly white suburban localities. Six years after the experiment initiated by the HUD Act, the federal approach to housing returned to its roots of local control and segregated housing.
This history is critical to understanding why some communities came to be designated as prime or subprime in the color-blind discourse of 1990s and 2000s. The foreclosures hastened by reckless federal policies unleashed by the 1968 HUD Act, along with a lackadaisical routine to address housing discrimination, legitimized the devaluation of Black homes and Black communities. These became the pretext, in a post–civil rights world, for treating Black housing consumers differently: from higher or adjustable interest rates to higher risk fees to the subprime designation.
The crisis from the 1970s also rehearsed earlier arguments that African Americans lacked sophistication and basic impulse control when it came to purchasing property. Instead, they wanted more than they could handle and nearly crashed the economy as a result. Then as now, it was a deft way of turning the discussion away from the corporate underpinnings of public policy—in this case, housing policy. It was then and it is now a failure to grapple with the central contradiction of public policies that rely on private sector institutions to fulfill them. The reliance on the private sector to address the social provision of housing has resulted in public policies that reflect the racism embedded in the U.S. housing market.
This has continued to hasten housing insecurity within African American communities—from new lows in Black homeownership to the overrepresentation of African Americans among the rent-burdened. The continued American reliance upon the private sector as the main source of housing production has meant a continuation of the inequality that systematically disadvantages African Americans in search of home.
1974–1979
COMBAHEE RIVER COLLECTIVE
Barbara Smith
In 1974 the city of Boston was in the middle of a race war. A federal judge had ruled that public schools must finally desegregate and establish a busing plan to make it happen. Boston’s particular brand of virulent racism was well known to members of the Black community. But across the nation, many were surprised by supposedly liberal white Bostonians’ violent opposition to integration, which rivaled anything that had occurred in the Deep South more than a decade earlier.
In the mid-1970s, Black Power and Black Nationalism were dominant political ideologies. Within these movements, roles for Black women were frequently even more circumscribed than they had been during the civil rights era. Since 1969, the Nixon administration had implemented numerous strategies calculated to roll back hard-won gains in civil rights. Organizations were dealing with the repercussions of the FBI’s decades of surveillance and its murderous disruption of the Black liberation struggle. During the mid-1970s, the federal government began investigating lesbian feminist communities and impaneled grand juries to locate women radicals who had gone underground to elude capture.
In this atmosphere of racial turmoil and right-wing backlash, a handful of Black women came together in 1974 to form the group that became the Combahee River Collective. We were sick of the violence. We were sick of being voiceless. We were sick of being exploited. We were sick of being told to walk three or seven paces behind. We were sick of being invisible. We were sick of it all. We wanted and needed Black feminism. Since there were few indications that such existed, we decided to build it for ourselves.
The Combahee River Collective was a Black feminist organization that worked in Boston from 1974 through 1980. Originally a chapter of the National Black Feminist Organization, the collective decided in 1975 to become independent. We named ourselves after the Combahee River, where Harriet Tubman led a military raid during the Civil War that freed more than 750 enslaved people. During the second half of the 1970s, the collective engaged in action on multiple fronts including study, political analysis, protests, campaigns, cultural production, and coalition work around a range of issues, all with the objective of defining and building Black feminism.