Racialized geographies of housing financialization

I Housing Financialization as Racialized Expropriation

The relationship between racial differentiation and capital accumulation has been incompletely theorized throughout the voluminous literature concerned with financialization. The bulk of work on post-1970s financialization is concerned with the shift toward finance-led capital accumulation (Christophers, 2018; Krippner, 2005); the relationship of shareholder value to corporate and macroeconomic governance (Froud et al., 2000; Rutland, 2010); and finance’s extension into, and influence over, everyday life (Langley, 2008; Martin, 2002; Roberts, 2013). In short, this work emphasizes the ascendant power of finance and how this ‘influences and reshapes the operations, logics, motivations, cultures, and processes of firms, social and public institutions, and diverse individuals well beyond the confines of that sector’, portending ‘broader economic, political, social, and cultural transformations’ (Haiven, 2017: 350). Despite significant scholarly attention to financialization, little of this attention is directed toward the central role of racialized expropriation in post-1970s financial capitalism (Fraser, 2018; Wang, 2018).

Research focused specifically on housing, widely understood as a core domain of financialization, similarly fails to grapple with the racialized dimensions of this process (though see Chakravartty and da Silva, 2012; Wyly et al., 2012 for important exceptions). For example, a recent high-level review of financial geographies of housing and real estate mentioned race only once, referring to increasing indebtedness ‘among more vulnerable groups, including but not limited to ethnic/racial minorities, migrants, elderly women and a range of social groups vulnerable to labour market shocks’ (Aalbers, 2019: 377). ² In this section, we show how this omission is related to the theoretical foundations of much of the research on housing financialization and provide an alternative set of theoretical commitments that enable us to better contend with race and racism.

Scholarship on housing financialization draws primarily on geographical political economy, namely David Harvey’s Marxian-inspired theories of overaccumulation and the spatial fix (Aalbers, 2012). A central distinction between this theoretical starting point and theories of racial capitalism and settler colonialism is how primitive accumulation, or accumulation by dispossession, is theorized. In conventional Marxian scholarship, primitive accumulation (including through colonialism and slavery) is placed in the prehistory of capitalism. Britain’s enclosure movement is the emblematic case of primitive accumulation. The seizure and commodification of common land by landowners was a necessary precondition for the 18th-century development of industrial capitalism, creating a surge of rural-to-urban migration by commoners with little choice but to sell their labor for wages in emerging urban industrial centers (Harvey, 2004; Marx, 1992; Thompson, 1964; Williams, 1975). In this account, the violent process of primitive accumulation serves as the origin of capitalism by helping to make both land and labor into commodities.

The concept of primitive accumulation has been revised in recent years, with Harvey (2004) coining the phrase ‘accumulation through dispossession’, to point toward ‘the continuous role and persistence’ (p. 74) of primitive accumulation within capitalism. In other words, primitive accumulation was not only needed to jumpstart capitalism; capitalism must routinely turn to dispossession of non-capitalist and/or underdeveloped places and populations as a means of forestalling crisis and securing further accumulation (Fraser, 2018; Harvey, 2004; Luxemburg, 2014). Harvey describes accumulation by dispossession as a feature of international relations, and an emerging tactic deployed by private finance capital and international organizations, but does not attribute a specifically racialized character to this ‘new imperialism’ or to dispossession (Chakravartty and da Silva, 2012).

Accumulation by dispossession is regularly invoked as a means of understanding the coercive and violent appropriation of land and livelihood associated with the role of housing in contemporary financial capitalism, particularly the waves of evictions and foreclosures seen in the wake of the 2008 financial crisis (Aalbers, 2008; Alexandri and Jansoshka, 2018; Cooper and Paton, 2019; Pósfai et al., 2017; Vives-Miró et al., 2015). Drawing on Harvey, Wijburg et al. (2018) and Aalbers (2019) incorporate accumulation by dispossession into a theory of the financialization of social and private rental housing. In their framework, Financialization 1.0 involves the ‘original acquisition of de-commodified and not fully commodified land and real estate’ by ‘opportunistic investors’ using ‘aggressive strategies’, which Aalbers (2019) designates as ‘pure speculation’ (p. 381). Financialization 1.0 is ‘globally mobile’, ‘restless’, and ‘pushes for the primitive accumulation of land and real estate’ (Aalbers, 2019: 381), enabling Financialization 2.0, which incorporates property into systems of long-term investment and practices of rentiership. Involving strategies such as publicly listed real estate investment trusts (REITs), the latter stage substitutes ‘pure speculative strategies in the housing market by those in the stock exchange’ (Wijburg et al., 2018: 1114). Financialization 1.0 and Financialization 2.0 are here understood as two (non-exclusive) moments (involving distinct strategies and market actors) in a broader cycle of accumulation by dispossession (Wijburg et al., 2018). But again, this cycle is conceptualized without reference to processes of racialization.

The Black radical tradition and accounts of racial capitalism offer a critical intervention to how accumulation by dispossession can be theorized within work dealing with housing financialization. Prior to Harvey’s work on accumulation by dispossession, Cedric Robinson (2000 [1983]) was already characterizing primitive accumulation as a continuous process within capitalism, while also demonstrating how race emerged as an ideology in the feudal era to organize social relations within Europe and has been carried forth to the present. Capitalism’s ‘racist dawn’ in early modern Europe unfolded in ‘essentially racial directions’ (Robinson, 2000: 2) creating a racialized proletariat within Europe, developing systems of settler colonialism and transatlantic slavery in the imperial era, and permeating successive regimes of accumulation (Hudson, 2016). Accounts of racial capitalism underline how ‘capitalist modernity has always depended as much on the production and negotiation of difference as it has through enforcing sameness, standardization, and homogenization’ (Hall, 2017: 118-119, quoted in Virdee, 2019: 9).

The logic of difference embedded within capitalism underpins a hierarchical ordering of society. Those seen as most similar to the dominant group are assigned higher status and seen as more valuable, and those seen as different from the dominant group are assigned lower status and less value (Virdee, 2019). The resulting political subjection for the latter underwrites a process of racialized expropriation that ‘works by confiscating capacities and resources and conscripting them into capital’s circuits of self-expansion’ (Fraser, 2018: 4, emphasis in original). Racialized expropriation here refers to the confiscation of both labor and land. This ‘looting component of capitalism’ (Wang, 2018: 113) is legitimated by a logic of hierarchical racial difference in which those at the top of the hierarchy are seen as more human than those below them (Fraser, 2018; Wynter, 1995). Throughout the history of capitalism, such expropriation has disadvantaged racialized (in relation to white) subjects, peripheral (in relation to core) global regions, and economically underdeveloped (in relation to developed) regions within nations by (Fraser, 2018; Luxemburg, 2014; Wang, 2018).

Of particular relevance to debates about financialization is the central role that debt has long played in the expropriation of land and housing from racialized peoples. In the US, debt has served to expropriate indigenous land in the colonial-era (Park, 2016), rural land worked by Black sharecroppers in the South after the abolition of slavery (Du Bois, 2017), residential real estate in the urban core purchased by Black women through a 1970s federal program intended to expand low-income homeownership (Taylor, 2019), and housing financed by subprime loans to Black and Latinx debtors in the 1990s and 2000s (Dymski, 2009; Wyly et al., 2009).

To summarize, both the Marxian and Black radical traditions stress accumulation by dispossession as a continuous process that is structurally necessary to capitalism. But the latter helps us understand how racial hierarchies of value have ever shaped the socio-spatial contours of this process. This theoretical orientation can strengthen our work in two related ways. First, we become attuned more keenly to how a logic of difference animates the strategies, tactics, and consequences of housing financialization. Second, by drawing on theories of racial capitalism, we can better historicize our analyses by placing contemporary processes of housing financialization in an unbroken succession of ‘race for profit’ (Taylor, 2019) schemes in land and housing, stretching back to the frontier and the plantation (Woods, 2017a, 2017b), undertaken to preserve or restore profitability to capital. In the following section, we put this theoretical orientation to work, linking the plantation and settler colonialism to the violence of property relations in the US to show the deep roots of the 2008 crisis.

II Property, Violence, and the Settler Colonial Roots of the 2008 Crisis

As the preceding discussion emphasized, racial inequality is not an unfortunate by-product of overaccumulation, the final stages in a system prone to ever-deepening divides; rather, the production of racial difference is core to the production of value. This process is a fundamentally spatial one, whereby the sorting and separation of social groups into distinct geographies serves as the basis for racialized expropriation (Gilmore, 2002; Melamed, 2015). The practice of racial differentiation ‘produces some people and places as “surplus”‘ (Danewid, 2019: 4) in a way that is central to capitalism in all its incarnations, including the present, finance-dominated era. It follows that racial division and subordination have always been necessary to the production of value in real estate in capitalist societies.

The institution of private property is key to the operation of racial capitalism, particularly in settler societies like the US. Forged in the crucible of colonialism and slavery and evolving conjointly with notions of race, private property is a crucial apparatus of dispossession (Bhandar, 2018; Blatman-Thomas and Porter, 2018; Bonds, 2019; Harris, 1992; Rolnik, 2019). Within settler societies, property has long been, and remains, a fundamental mechanism in the ‘subordination of Black and other non-white racialized bodies’ (Bonds and Inwood, 2016: 719). Focusing specifically on housing, Anne Bonds (2019) positions property as a ‘race-making institution’ in the sense that ‘the loss or acquisition of a property produces a set of racialized relationships and conditions’ (p. 575) that order people and place. As Brenna Bhandar (2018) argues, contemporary understandings of property are rooted in ‘the attribution of value to the lives of those deemed as having the capacity, will, and technology to appropriate, which in turn was contingent on prevailing concepts of race and racial difference’ (p. 4). In this way, property not only makes space into a commodity, it also produces racial subjects with differing rightful claims to space (Bhandar, 2018).

The expropriability of racial subjects assigned less value plays out through discourses of Black ‘a-spatiality’ (Bledsoe and Wright, 2018: 5) and indigenous ‘non-being’ (Blatman-Thomas and Porter, 2018: 5), which render Black and indigenous geographies ‘available for emerging modes of accumulation’ (Bledsoe and Wright, 2018: 6) in and through property. The occupants of racial capitalism’s ‘wastelands’ and edge spaces (Bhattacharyya, 2018: 16) are understood as doubly incapable – of appropriating land and of making home (Bhandar, 2018; Taylor, 2019). The material and symbolic devalorization of non-white racialized people, places, and property (in relation to the value attached to whiteness) can be conceptualized in terms of what Katherine McKittrick (2011) calls urbicide, with its deliberate ‘practices of place annihilation’ (p. 947). Willful practices of destruction that imperil subaltern geographies are intertwined with discourses of decay, contamination, and deterioration regularly used to classify such places as in need of being made habitable (Ansfield, 2015; McKittrick, 2011; Wynter, 1995). Devalorization ushers in revalorization and successive rounds of accumulation, hardening ‘the seemingly natural links between blackness, underdevelopment, poverty, and place’ prototyped by the plantation (Ansfield, 2015; McKittrick, 2011: 51). Like the plantation, subsequent racial violence through the systematic, finance-mediated underdevelopment of Black spaces is routine and ordinary. Such depredations are integral to creating opportunities for appreciation and ultimately value in real estate markets.

The settler colonial history of property in the Americas is inextricable from racial differentiation and subordination. When multiracial coalitions of English laborers, African laborers, and natives challenged elite rule in early colonial Virginia, elites reacted by inventing new racial terms ‘white’ and ‘negro’ and predicating land inheritance and property ownership on these newly established racial categories (Virdee, 2019). The co-construction of property laws and white identity further functioned to legitimate settler claims on native land and delegitimize indigenous forms of property (Harris, 1992). K-Sue Park’s (2016) study of foreclosure in colonial America demonstrates how the 2008 crisis is intimately tied to settler colonial commodification of property and theft of indigenous land. Park analyzes how English colonists exploited differences in indigenous conceptions of land and value to deliberately extend unpayable debts and induce indigenous people to mortgage their land. At the same time, colonists transformed long-standing English legal practices that made it difficult to alienate debtors from land. By restructuring property law to be dispossessory, that is, normalizing the seizure of land to recover debts, they forged a new, American conception of land as fungible commodity (Park, 2016).

But we not only dwell with the history of how chattel slavery and settler colonialism shaped real estate in generations past: their racializing logics still reverberate and remain fundamental to the operation of finance in housing markets today. While rural land was the most important source of wealth in colonial times, today financialized forms of capital, including urban housing, now constitute the largest components of wealth (Piketty, 2014; Pistor, 2019). Housing plainly constitutes a critical site of ‘racial and class domination’ in settler societies (Bonds, 2019: 576). Late 20th- and early 21st-century practices of predatory mortgage lending are inseparable from the violence of the plantation and of settler colonial expansion, as is the now nearly unquestioned notion of land as money.

The parallels between how colonists leveraged difference to create value and appropriate land as commodity, the emergence of redlining and practices such as contract sales ³ in the 20th century (Trounstine, 2018), predatory lending in Black communities the wake of the Fair Housing era (Taylor, 2019), subprime lending in the 1990s (Immergluck, 2009), and the practices leading up to the subprime mortgage crisis of the 2000s are striking. Predatory subprime lending represents a continuation of generations of differential access to credit for Black and other marginalized populations, in which value extraction relies on racialized geographies and ‘predatory inclusion’ of Black and other non-white populations (Taylor, 2019: 5). Like earlier schemes of predatory inclusion, in the years leading up to the 2008 crisis, finance and real estate actors appealed to and undermined Black efforts at ‘establishing legible space’ and realizing what Ananya Roy has called propertied citizenship (Bledsoe and Wright, 2018: 5; Roy, 2003; Wyly et al., 2009).

III Financialization as Technique of Racial Capitalist Abstraction

Having demonstrated how financialization is properly understood in terms of racial capitalism in the preceding sections, we now turn to how financialization affords the reproduction of racial capitalism through techniques of abstraction. Guided by Ruth Gilmore’s insight that racism is ‘a practice of abstraction, a death dealing displacement of difference into hierarchies that organize relations’ (2002: 16), we argue that housing financialization is a key site in which racial divides are encoded and legitimized through abstraction. In the 21st-century, financialization combines finance, data, and digital technology with racial hierarchies, resulting in what Ruha Benjamin (2019b) describes as the ‘New Jim Code’. The New Jim Code ‘reproduces racist forms of social control into a sociotechnical component that hides not only the nature of domination, but allows it to penetrate every facet of social life’ (Benjamin 2019a: 3). Through digital technologies that perpetuate algorithmic bias with the automated, seemingly colorblind ⁴ objectivity, housing finance both incorporates existing, entrenched racial divides into abstractions of risk and creates racial divisions anew. It is via such ‘nonracialism’ (Melamed, 2006: 3) that contemporary financial systems produce disparate impacts while denying any role in differentiating between racialized bodies or places.

Today’s ‘colorblind’ financial systems mark a shift from earlier eras, when racialization processes mapped race into the body and onto the skin, employing epistemologies based on sight and naturalizing the resultant racialized hierarchy with claims of medical and scientific objectivity (Omi and Winant, 2014). Instead, algorithms and large administrative data sets are used to construct a racialized ‘digital character’ upon which the right to housing relies (Nopper, 2019). Browne (2010) describes this process as ‘digital epidermilization’, applying Fanon’s concept of epidermilization to characterize the digital era as one that establishes prototypical whiteness and the racial ‘Other’ within discursive formations like credit reporting databases. These technologies of financialization, rather than skin color per se, contain the traits by which people are tranched and ranked. Stratification is based not just on individual histories but on statistical associations to risk factors that are themselves the legacy of racial discrimination. These models thus price, allocate and deny access to housing and property in land, producing racial divides (Nopper, 2019).

Digital epidermilization depends on ‘moments of observation, calibration and application that can reveal themselves as racializing’ (Browne, 2010: 133). We can see a moment of calibration in financial regulators’ actions following the US Savings and Loan crisis of the 1980s, in which the failure of more than a thousand local and regional savings banks (also known as thrifts or building societies) threatened the financial system as a whole (Ashton, 2012). To deal with distressed assets held by these institutions, financial regulators created financial exceptions for high-risk loans, banishing them from traditional, regulated circuits of mortgage markets; and simultaneously assigning higher prices to these loans (Ashton, 2012). These calculative practices enabled the expansion of subprime lending in African American neighborhoods. In this transition, the racialization of risk shifted from a system of exclusion based on raced individuals and places into a system of ‘predatory inclusion’ based on raced avatars (Taylor, 2019). Calculative practices like credit scoring, tranching, and mortgage scoring split and priced credit risk in ways that linked ‘high interest rates and onerous loan terms onto earlier forms of racial and class dispossession’ (Ashton, 2011: 1810; Ashton, 2012), calibrating seemingly ‘colorblind’ credit scoring systems which nonetheless function to reproduce racial divides.

In this way, the financialization of housing projects racialization onto place/space, for example by indexing investment risk to observations of racial-ethnic population flux or stasis through redlining. Prior to the era of ‘colorblind’ racial capitalism, American public financial institutions (such as the Home Owners Loan Corporation and the Federal Housing Administration) and private banks used redlining maps to rigidly segregate Black, immigrant, and non-white places and to starve non-white places of finance (Trounstine, 2018). As a result, racial segregation at the neighborhood level rose steeply throughout the 20th century, and communities were recast as racialized spaces of domination, risky places to be systematically deprived of finance and other public resources (Massey et al., 2009; Taylor, 2019; Trounstine, 2018). The provision of mortgage insurance through redlining was a massive infusion of capital and a powerful intervention, but nonetheless abstract and intangible in that it obscured the government’s role in subsidizing housing and promoting racial segregation (Taylor, 2019).

In the post-Fair Housing era, segregation, dispossession, and displacement continue, but they are actualized through abstract, seemingly colorblind financial processes, in part because the practice of dividing and tiering communities by race continues to enhance prices in racially exclusive places (Taylor, 2019). Through market tiers that categorize land in terms of development, Black and brown communities are classed as low value, high risk, and requiring revalorization through reinvestment that often results in displacement. Financial markets continue to deny credit to Black and immigrant spaces through tiered markets, and the lack of bank branches in non-white neighborhoods (Squires, 2011). Dispossession occurs through community banks in Black communities, which were unable to realize intentions to reinvest in their communities due to the institutional structure of bank depositing and lending in the broader financial system and served instead to drain capital and perpetuate the racial wealth gap at the neighborhood level (Baradaran, 2017). In home buying, the appraisal system replicates the history of credit rationing within neighborhoods, projecting past credit rationing into current and future home values (Howell and Korver-Glenn, 2018). Similarly, automated home valuation systems incorporate race, or proxies for race into hedonic models, naturalizing the withholding of finance to spaces coded as non-white. Contemporary cycles of neighborhood disinvestment and revalorization rely on the ongoing abstraction of complex, entrenched histories of racialized processes into risk, justifying neighborhood decline and dispossession, or displacement, redevelopment, and raced gentrification (Brand and Miller, 2020; Sims, 2016).

As racial formations transition from epistemologies based on vision and the body and are incorporated into digitized financial systems in which the body and place are classified by databases of past transactions, the assumed objectivity and opacity of the software and algorithms provides the naturalness that the biological sciences once provided (Browne, 2010). The institutional complexity and Black box nature of financial systems operates as a screen over the violence of displacement and deprivation occurring in commodified housing systems (Pasquale, 2015).

Violence is inherent to the unwilling separation of people from their homes and land. The dynamics of financialization obscure this violence by introducing more intermediaries into supply chains, entailing multiple layers of abstraction in the production of financial instruments, and enabling financial actors to exercise power in local contexts from a distance while remaining invisible to those on the ground (Fields, 2017). Automated valuation, appraisal systems, and bank-branching infrastructures of finance serve to naturalize the ‘decay and death of a very complex Black sense of place’ (McKittrick, 2011: 951). Housing displacement and dispossession are part of a ‘white supremacist, settler socio-spatial dialectic’ that necessitates these processes to make land productive and profitable (Bonds and Inwood, 2016: 720). As Ponder and Omstedt (2019) observe, the harms resulting from financialization ‘are rarely recognized as violent because they frequently lack immediately identifiable perpetrators and/or relations of cause and effect’ (p. 2). Such ‘abstract violence’ is often ‘attributed to “objective” market conditions’ rather the social relations that produce racialized expropriation (Ponder and Omstedt, 2019: 2). The effect is to make financial violence invisible by refracting it through ‘much longer histories and geographies of racialization and puerility’ (Ponder and Omstedt, 2019: 6), a process that played out after the 2008 crisis in media and political discourses that condemned Black and Latinx subprime borrowers as ‘unfit economic subjects’ (Chakravartty and da Silva, 2012: 362). To the extent that the violence of property relations play out via housing financialization, critical geographers must work to draw together long histories of racial capitalism always at work in the landscape and spatial development; lived experiences of financial violence; and the specific financial actors, logics, and techniques implementing that violence (Ponder and Omstedt, 2019).

The use of finance to enact racial hierarchies is not new; these practices stretch back into the dawn of imperial capitalism. In the US context, we see financialized racial capitalism in colonial-era systems of racialized property and debt. For example, Kish and Leroy (2015) link today’s social impact bonds to early American financial innovations based on the bodies of enslaved people, confirming how ‘financialization has long been – and continues to be – deeply racialized’ (p. 632). Similarly, in the early 20th century, financial markets responded to the problematic positionality of blackness with a strategy of individualizing and quantifying risk. Early forms of actuarial statistical segmentation were invented to price life insurance for non-white customers, charging Black Americans higher premiums to reflect the fact that they died younger than their white counterparts, a fact inseparable from the violence of racism (Bouk, 2015). Quantitative social reasoning based on ‘fossilized data’ warped by injustice, power dynamics, and the legacy of inequality works to preserve these disparities (Sloane and Moss, 2019: 331).

What is new since the late 20th century is the combination of finance with automated and digitized technologies as a means of governing the allocation of investment, wealth, landed property, and access to place. The perpetuation of racial capitalism through the financialization of homeownership has included the creation of segmented risky financial products (Squires, 2003; Taylor, 2012) and the innovation and standardization of credit scoring, automated underwriting, and algorithmic racism (Chander, 2016; Freeman, 2016). Credit scoring, automated underwriting, risk-based pricing, and tranched securitizations emerged to replace the wholesale exclusion of non-white borrowers and neighborhoods under the redlining of earlier eras. The individualization and quantification of risk extended mortgage credit to non-white borrowers and places, while simultaneously constructing them as hazardous. That characterization served to legitimate higher prices, predatory terms, devalorization, foreclosure and displacement and speculative investment (Immergluck, 2011; Taylor, 2012). Housing financialization reconfigures the death-dealing abstraction of racism, shifting it away from systems of individual bias and racialized bodies and into automated systems.

IV Reasserting Racialized Geographies

In the 2000s, the system of extraction through racialized abstraction moved toward crisis. The volume of loans needed to keep the ‘securitization machine’ running in the years leading up to 2008 entailed retooling tactics historically applied to Black urban spaces for Sun Belt suburbs and growing shares of white borrowers (Wyly et al., 2012: 600) and reconfiguring mortgage property rights to advantage bulk securitizers over individual mortgagors (Levitin, 2013a, 2013b). Subsequently, nearly eight million households went through foreclosure between 2007 and 2017 (CoreLogic, 2018). The foreclosure crisis briefly overspilled long-standing racial geographies of dispossession wrought by financial tactics, enabling Wyly and colleagues to argue in 2012 that ‘the devastation wrought by deregulated mortgage capital’ threatened ‘the home equity premium so long promised by American white privilege’ (p. 600). But more than a decade after 2008, the crisis can clearly be understood not as a moment of exception from racial capitalism, but a moment in its replication and reformulation. In this section, we briefly discuss that reformulation, drawing on two examples of post-2008 housing financialization.

As a result of the federal government largely ceding recovery to the market and years of record-low interest rates prompting the growth of alternative investment strategies including real estate and private equity, the status of housing as a financial asset has only been entrenched since 2008 (Fields, 2018). The ‘overall churn, disinvestment, and housing insecurity’ (Seymour and Akers, 2019: 3) affecting Black neighborhoods through the 2008 crisis and uneven recovery has created ‘wastelands’ (Bhattacharyya, 2018: 16) that offer private equity investors space for accumulation. After the violence of racialized dispossession authored by predatory lending practices, these investors are resurrecting racially exploitative mechanisms of home purchase and undertaking aggressive eviction practices in ways that continue to make home a racialized ‘death trap’ (Chakravartty and da Silva, 2012).

In Section I, we argued that theorizing financialization in terms of racial capitalism attunes our analyses to how a logic of hierarchical difference shapes strategies, tactics, and consequences of housing financialization and enables us to historicize financialization so as to observe the continuity of this logic across different eras of capitalism. Predatory inclusion of housing finance in the post-civil rights era was a recapitulation not just of redlining under Jim Crow, but of the use of credit markets to fuel expansion into the frontier as settlers took advantage of Indian removal policies to replicate suburban development patterns across the nation during the 1800s (Hudson, 2017; Jackson, 1987; Levy, 2021; Quinn, 2019).

The return of land contract sales after 2008 highlights the convergence of these arguments during the recovery period after the Great Recession. Land contracts, or contract for deed, enable buyers without access to mainstream mortgage financing to buy a home by putting money down and paying in installments, only receiving title and starting to build equity when they have paid off the principle in full. Widespread as a means for Black people to buy homes in the segregated real estate markets of the pre-Fair Housing Act 1950s and 1960s, contract for deed is associated with abusive terms and practices that often lead to repossession, including high interest rates, wide latitude to evict buyers, and sale of properties unfit for habitation (Satter, 2009). Land contract sales of the 20th century were made possible by how the projection of racial hierarchies onto space starved Black geographies of access to mortgage credit.

Today, ‘the land contract has returned as an instrument for finding profit in otherwise devalued landscapes’ (Seymour and Akers, 2019: 5). While a broad range of actors have long deployed land contracts, the bulk disposition of foreclosed homes by public institutions after 2008 has enabled nationally coordinated private equity firms able to raise capital from wealthy investors and pension funds to engage in contract sales (Akers and Seymour, 2018; Immergluck, 2018b; Seymour and Akers, 2019). Investors engaging in contract selling are most active in Black metropolitan areas and Black neighborhoods; landscapes destabilized by predatory subprime lending and the foreclosure crisis, then shut out of recovery from the Great Recession, now beset by negative equity and low-value properties banks have all but stopped financing (Carpenter et al., 2019; Seymour and Akers, 2019; Stevenson and Goldstein, 2017). Buyers in such communities are made vulnerable by poor credit or incomes insufficient to qualify for traditional mortgages, and more limited access to mainstream financial institutions (Carpenter et al., 2019; Stevenson and Goldstein, 2017).

Acting in the market created when government agencies and mortgage giants Fannie Mae and Freddie Mac began selling entire portfolios of repossessed homes to investors, firms such as Harbor, Stonecrest, and Vision are engaging in the same kinds of practices local actors used in the mid-20th century: selling derelict homes at high interest rates, contracts offering little protection to buyers, and substantial markups from acquisition costs without making improvements to the property (Goldstein and Stevenson, 2017; Stevenson and Goldstein, 2017). Under this business model, buyers often forfeit the contract and leave the property after being unable to make repairs or comply with local ordinances, but not before plowing into savings or taking on additional debt (Carpenter et al., 2019; Goldstein and Stevenson, 2017). Under this business model, the churn of tenants in and out of the same property tips it into further disrepair. Analyzing private equity’s resurrection of land contracts from the perspective of racial capitalism brings to the fore the ‘willful place annihilation’ associated with urbicide as ‘the ongoing destruction of a Black sense of place in the Americas’ (McKittrick, 2011: 951, emphasis added). The resurfacing of contract sales wielded by corporate investors draws together numerous moments in ‘the longue duree of racial capitalism’ (Ponder and Omstedt, 2019: 8) through the operations of finance in housing markets, and also adds to it.

While one set of private equity firms is reviving contract selling, another set has become more traditional landlords. Global investment giants like Blackstone, Cerberus, and Colony Capital have become some of the nation’s biggest property owners through buying foreclosed single-family homes by the thousands and converting them to rental housing (Charles, 2019; Colburn et al., 2020; Fields, 2014). Unlike traditional landlords, these actors are not just collecting rent checks, they are bundling them into financial assets similar to mortgage-backed securities, and also selling shares in REITs (Fields, 2018; Charles, 2019; Colburn et al., 2020). In binding tenants into relationships with bondholders and shareholders, corporate landlords are adjusting the social relations of rent to better accommodate financial accumulation (Fields, 2018).

The geography of corporate landlords tilts more toward Sun Belt metros with a greater supply of newer homes (places like Phoenix, Dallas, and Tampa) than metros in the Midwest and the Rust Belt, where contract selling by private equity is more deeply entrenched (Carpenter et al., 2019; Colburn et al., 2020; Fields et al., 2016; Immergluck, 2018a; Seymour and Akers, 2019). Within this Sun Belt-dominated geography, single-family rentals have grown most in older and racially and ethnically diverse suburbs; in neighborhoods with low property values before the crisis that experienced more foreclosures during the crisis and slower recovery afterwards (Immergluck, 2018b; Pfeiffer et al., 2020). Despite the largely divergent regional geographies of private equity contract sales and private equity single-family landlords, both are contributing to racialized housing precarity: in the case of corporate landlords, the mechanism for this precarity is evictions (Frankel and Keating, 2018; Raymond et al., 2018). When considering these geographies of racialized housing precarity alongside one another, what stands out is how they are situated in relation to 20th- and 21st-century patterns of migration within the US by people of color. The exploitation and insecurity that characterize contract sales is happening in Midwestern metro areas that were major destinations for African Americans in the Great Migration, while the violence of eviction is happening in in Sun Belt locales with large Latinx populations and growing African American populations coming to the South as part of the ‘new Great Migration’ (Frey, 2014).

The practices of corporate single-family landlords demonstrate the central role of abstraction via automated and digitized technologies in the current form of financial-racial capitalism. The scale of their operations (in the tens of thousands of properties) means that such actors rely on acquisition algorithms to evaluate properties and neighborhoods for investment, digital platform infrastructures to manage properties and tenants at a distance, and automated eviction filings to govern compliance with rent payment schedules (Capps, 2020; Fields, 2019; Terry, 2019). As we argued in Section III, such technologies incorporate and reproduce enduring patterns of racial domination, a point evident both in the geography of single-family rental portfolios and in the material impacts of eviction.

While Matt Desmond’s work (2016) has shown eviction is alarmingly common, in Desmond’s research, landlords have a face; they are people. In research on Atlanta, a long-standing Black city that has drawn Black migrants from northern US cities in recent years (Toppo and Overberg, 2015), Raymond and colleagues (2018) found eviction is even more routine for tenants of large, faceless, institutional investors like American Homes 4 Rent and Invitation Homes. Such corporate landlords were more than three times as likely to initiate eviction than mom and pop landlords. In Memphis, a city with one of the highest percentage Black populations in the country and the greatest decline in owner-occupied homes since 2008, private equity firm Cerberus Capital management has become the largest landlord of single-family rental homes (Frankel and Keating, 2018). The company files for eviction much more aggressively than other area landlords, and their filings are concentrated in majority nonwhite neighborhoods (Frankel and Keating, 2018).

The eviction practices of corporate landlords echo the practices by loan servicers in the 2008 crisis. Servicers were motivated to draw out the process of foreclosure to yield additional profits through fees and charges tacked on to mortgage arrears, burying homeowners deeper in debt (Bajaj and Leland, 2009; Goodman, 2009). The scale of their portfolios means corporate landlords can substantially increase their income through routine, automated eviction filings that pile late fees, court fees, and other costs onto past-due rent – even if, like Cerberus’s Memphis portfolio, their properties are beset by housing code violations (Frankel and Keating, 2018). Invitation Homes generated US$2 million this way in 2017 (Raymond et al., 2018). In the current phase of racial capitalism, this violence is implemented abstractly (Ponder and Omstedt, 2019), worked through the assumed neutrality and objectivity of algorithmic systems that produce intimately felt material impacts of eviction for racially subordinated communities that have already been sacrificed to financial accumulation many times over. ⁵

V Conclusion

Financial tactics of accumulation via the housing market have shifted following the foreclosure crisis, extending beyond mortgage lending to include ‘speculative bulk ownership’ (Akers and Seymour, 2018: 27) of homes by financial actors. But many continuities also remain: the networks of companies involved in bulk ownership are often operated by erstwhile investment bankers harnessing the same flows of global capital and investor networks they did before 2008 (Akers and Seymour, 2018). Despite involving some different tactics than before the crisis, post-2008 housing financialization demonstrates the persistence of what Roy (2017) terms ‘foundational dispossession’, wherein tenuous claims to personhood make home ‘a lived experience of loss’ (A9), or in Chakravartty and da Silva’s (2014) words, ‘a death trap’ (p. 367). Financial violence is racial violence.

This observation underlines the core argument advanced in this essay: because financial capitalism is fundamentally a project of racial domination (Dawson, 2020), studying and theorizing housing financialization demands understanding this process in terms of racial capitalism. While we touched upon empirical examples from the US, with its specific history of slavery and settler colonialism, neither racial capitalism nor financialization is unique to the US. Yet critical accounts of housing financialization tend to emphasize capitalist dynamics of dispossession without acknowledging the hierarchical social ideology of race that coevolved with capitalism and private property (Bhandar, 2018; Robinson, 2000), and the racial practice on which capitalism still depends today (Card, 2020). Some important consequences follow from this blind spot.

First, geographies of financialization often occlude how ‘‘new territories’ of consumption and investment have been mapped onto previous racial and colonial (imperial) discourses and practices’ (Chakravartty and da Silva, 2014: 368), resulting no doubt from historical frames largely limited to the late 20th and early 21st century (Christophers, 2015). Such analyses reinforce the mistaken notion of our current period of financial capitalism as exceptional (Christophers, 2015). In so doing, they neglect how contemporary financialization contains and reproduces racial logics and violence embedded in capitalism since its inception (Bhandar, 2014; Robinson, 2000). Scholarship on housing financialization must contend with the long-standing function of ‘property as a technology of racial dispossession’ (McElroy, 2020: 114) because without this history, the politics of 21st-century processes of racialized banishment and accumulation are illegible (Roy, 2017).

The failure to theorize financialization in terms of racial capitalism also has a second importance consequence, which relates to formulating emancipatory politics. Characterized by seemingly ‘colorblind’ techniques of financial abstraction that operate through the ‘displacement of difference into hierarchies’ for example of credit risk (Gilmore, 2002: 16; see also Holloway and Wyly, 2001 on statistical discrimination), financialization perpetuates the division and differential subordination of white and non-white places. Yet, analysis of racially subordinated communities solely in terms of their experience of oppression and domination can serve to reify these differences. What the Black radical and feminist traditions demonstrate is how experiences of racial violence ‘shape, but do not wholly define, Black worlds’ (McKittrick, 2011: 947). Scholarship that centers racialized death and dispossession to the exclusion of the humanity of racialized subjects raises questions about the motivations, utility, and accuracy of such work and the role of scholars as clinicians and coroners ⁶ (Woods, 2002; McKittrick, 2011, 2014). If ‘being locked in and locked out are two sides of the same coin, edges are interfaces, borders connect places into relationships’ (McKittrick, 2011: 959), urban housing scholars must attend to relationality within the hierarchy to recenter the humanity of people who inhabit spaces of organized abandonment, but who are not reducible to this experience.

Without incorporating a relational focus, housing scholarship risks analyzing racially subordinated communities solely in terms of their experience of oppression and domination. If we are to produce knowledge with an aim toward challenging and dismantling a process that abstracts concrete and specific land, homes, and communities into capital to be extracted according to investment objectives, our analyses must not fall into the trap of reducing ‘Black life to the violence and terror practiced by white people, real estate, and public policy’ (Taylor, 2020: 493). Such a path only reproduces the abstract violence of financialization by excluding from the frame ‘the seed of opposition’ contained in culture, history, and social consciousness (Amilcar Cabral quoted in Robinson, 2000: 122). Indeed, collective resistance and emancipatory social change is carried out by embodied and emplaced people with a shared consciousness shaped by ‘historical struggles for liberation’ (Robinson, 2000: 171) – not the abstracted and aggregated assets that are the basis for financial capitalism. As the work of Clyde Woods (Woods, 2017a, 2017b) shows, absent the organic intellectuals and resistance movements that challenge organized abandonment, narratives of racial capitalist development are incomplete. Another way of saying this is that studies of financialization need to account for dialectics of dispossession and resistance.

As we exit the post-foreclosure crisis recovery period, and tilt into another housing crisis driven by the COVID19 economic recession, it is crucial to remember the lessons of the episode of crisis and recovery. The last decade has taught us that centering Black, brown, and indigenous housing struggles is core to understanding techniques of economic subordination through housing and financial markets. This attention to struggle brings into the frame ‘people who have deep and complex bonds with place, with the land they live upon’ (Ramírez, 2020: 1), bonds that at once exceed and are undermined by financialization.

Take the work of Moms 4 Housing, a group of homeless and marginally housed Black mothers who in late 2019 occupied a vacant West Oakland, California home owned by a corporate investor. Their struggle does not only expose the violence of ‘fix and flip’ investors capitalizing on long-standing and recent dispossession to revalorize a historically Black and devalorized neighborhood; it also demonstrates what McKittrick (2006) terms an ‘oppositional geography’ produced by Black women (xi). Member Tolani King asserted claims to a home in Oakland in terms of her humanity and a politics of care and belonging: ‘I am someone. I deserve a house…I am a human being…I have lived in this community, I have walked up and down these streets. I grew up here. I deserve to live in Oakland’ (King, quoted in Ramírez, 2020: 1). In expressing this sense of place, Moms 4 Housing lay ‘demands on spatial arrangements’, and ‘contest, respatialize, and inhabit the uninhabitable’, producing ‘new forms of life that assert new geographic formulations’ (McKittrick, 2006: 142–143). Bringing such struggles into our frame of analysis decenters the abjection that normatively characterizes scholarship on the geographies of racially subordinated groups (Ansfield, 2015).

In this article, we argued that the growing body of work on real estate–linked strategies of financial accumulation can be strengthened empirically, conceptually, and politically by engaging with the framework of racial capitalism. We emphasized how this framework can help historicize housing financialization and its attendant dispossession. That is, financialization may be placed in a much longer line of land and housing schemes where capital accumulation is predicated on the racialization of people and place. This perspective brings questions of property as a site of racial domination into scholarship on housing financialization; such questions are particularly important as digitized financial techniques naturalize and put an objective face on racial violence. However, we also heed the Black radical tradition and Black feminist praxis to shift away from reproducing this naturalization of violence in our own work and to move toward emancipatory geographies of housing.