Profit and Precarity: Real Estate Investing After the Global Financial Crisis

Concentrating on Illinois, particularly the Chicagoland area, I investigate the housing finance practices and modes of accumulation that emerged in the wake of the 2008 financial crisis, and situate this contemporary activity within the historical context of the racialized housing market in the United States. Drawing on existing literature, I contextualize how post-crisis activity built upon historical segregation, racism, and post-war exclusion of Blacks from the housing market. While civil rights-era housing policy encouraged homeownership among African Americans as a means of building wealth, this “predatory inclusion” eventually saw lenders disproportionately target African American borrowers and communities for subprime loans. The ensuing financial crisis resulted in mass job loss, a widening of the racial wealth gap, and a wave of foreclosures that especially affected Black neighborhoods and homeowners. From the wreckage, private equity firms, institutional investors, and real estate actors saw a lucrative opportunity to purchase foreclosed properties and engage in one of several strategies to generate profit. Focusing on 2013, the year post-crisis activity peaked in Illinois, I identify a subset of investors that purchased large numbers of properties in bulk, track and define their investment strategies, and map these activities onto Chicagoland and the south suburbs. While overall activity was concentrated in majority-Black communities, different investors targeted different geographies according to their investment strategy. Those using more exploitative strategies—like contract lending—tend to be most active in majority-Black communities, while those active in white neighborhoods primarily used less exploitative strategies like single-family rentals. Variance in investor geographies reflects how investors’ strategies exploited and compounded existing racial-spatial patterns. Altogether, my research contributes to a broader body of work concerned with understanding how the logics of capital are racialized and continue to materialize in uneven geographies of concentrated wealth and poverty.