Managing the Rebellious City: Race, Housing and the Politics of Finance in Urban Crisis-Era Chicago (1960-1975)

This article examines the growing role of finance within the low-income rental housing sector in American society. It explores how, why and with what consequences federal housing officials and lower-level administrators throughout the 1960s and 70s adopted finance-driven innovations as solutions to the urban housing problem. I focus especially on the rise of state-level Housing Finance Agencies (HFAs) as a source of mortgage credit for multifamily housing developers. While sociologists have pushed back against the notion of a retreating state and debated the complicated ways in which the state participates in "financialization," this article considers the processes of institutional evolution that lead the state to construct ties to financial markets and the private sector in particular ways (and not others). It also highlights race as a foremost concern of policy makers and catalyst of financialization in the housing field, with a singular influence on how such processes of institutional evolution played out. Using archival and documentary data, I argue that HFAs were able to supplant competing public agencies and private firms in the multifamily mortgage market by using complicated financial instruments to simultaneously preserve and conceal their identity as state agencies. Flying under the political radar, HFAs could strategically manage the "Urban Crisis," with its constituent problems of worsening racial unrest in the inner city as well as growing racial backlash among white suburban homeowners. Ultimately, this article develops an analysis of financialization as a process that manipulates state visibility and, in doing so, transforms the state's capacities and the technologies at its disposal for managing the racial tensions of social policy.