Four decades after the passage of landmark federal legislation meant to eliminate race-based housing discrimination, the practice hasn’t died — it’s just evolved.
While the blatant practices of years past, like restrictive covenants and insurance redlining, are far less common, housing discrimination today may take a more subtle form, such as linguistic profiling — identifying home seekers with a particular race or ethnic group according to their national or regional accents and then discriminating against them on that basis.
The federal Department of Housing and Urban Development, in its Housing Discrimination Study 2000, found the incidence of housing discrimination had decreased overall since its 1989 study. Nevertheless, HUD reported that white homebuyers consistently received more favorable treatment than their African-American, Hispanic and Asian/Pacific Islander counterparts — including being shown more homes, receiving more information about financing and getting more encouragement in the process.
HUD also reported in 2003 that African Americans, Hispanics and Asians/Pacific Islanders experienced discriminatory treatment in approximately 20 percent of their interactions with sales or rental agents. People with disabilities seeking rental housing fared even worse, according to the agency: Wheelchair users encountered discrimination almost one-third of the time when making inquiries in person.
And even though HUD’s 2006 Annual Report on Fair Housing stated that the number of complaints received in fiscal-year 2006 by federal and state housing agencies set a new record, the report also noted the likelihood that even this number represented a significant underreporting of housing discrimination.
The concept of housing discrimination has evolved over the years as well, as local, state and federal housing laws have been amended to give protection on such factors as sexual orientation and source of income.
The National Fair Housing Alliance estimates that 3.7 million instances of sales and rental housing discrimination on the basis of race or ethnicity occur every year, but its president and CEO, Shanna Smith, calls this “the tip of the iceberg,” pointing out that the figure doesn’t capture other types of discrimination — such as those based on religion, family status (e.g., having children), other national origin (Russian, Middle Eastern) or all the steps and transactions in the sales process, such as lending and insurance.
Fair Housing: Failing the Test
April marked the 40th anniversary of the passage of the federal Fair Housing Act, a milestone that went virtually unmentioned in the recent saturated media coverage of the 40th anniversary of Dr. Martin Luther King Jr.’s assassination. That’s ironic, because the legislation, which had languished in Congress for two years, was finally signed into law one week following King’s death, after President Lyndon Johnson had urged its passage as a tribute to the slain civil rights leader.
Smith thinks that lack of attention is a shame, because the legislation is “one of the strongest civil rights laws — if not the strongest — that has ever been passed.”
In a year when the surging popularity of an African-American presidential candidate has led to talk of a “post-racial” America, the continuing need for the legislation that Smith calls “the stepchild of the civil rights movement” may not seem obvious to most white, able-bodied Americans.
Indeed, says Smith — who has spent more than 30 years working to eliminate housing discrimination — if you ask the average person about fair housing, he or she will assume you’re talking about a landlord-tenant problem. But housing discrimination is both broader and deeper, as the public and private agencies fighting it have discovered.
HUD and private fair housing centers like the ones affiliated with the NFHA use testing — a sort of sting operation in which undercover agents, or testers, respond to randomly selected advertisements for sales or rental housing. Testers of different races and ethnicities are provided with similar “cover stories.” HUD described its methodology in the 2000 discrimination study: “Both minority and white partners were assigned income, assets, and debt levels to make them equally qualified to buy or rent the advertised housing unit. Test partners were also assigned comparable family circumstances, job characteristics, education levels, and housing preferences.”
The NFHA uses similar methods but, according to Smith, provides minority testers with slightly superior qualifications — more years on their current job, higher credit rating — than their white counterparts. Even so, the organization’s tests demonstrate a consistent bias in favor of the white testers.
Noting that “low-income people can’t afford to move,” Smith explained that most housing discrimination litigation that’s brought in the Midwest and Northeast involves middle-income people. People with higher incomes are not immune either: Smith cited the case of a physician in the West who won a settlement after learning from his realtor that the white landowner had refused to sell him the view lot he’d planned to purchase and build on — because the would-be buyer was black.
“Juries go, ‘You could afford that house, and they wouldn’t sell it to you? That’s outrageous!’ Most judges and juries will take that position,” continued Smith. “Once people know (about housing discrimination), they’re just totally appalled.”
Smith criticizes HUD for its substantial backlog of housing discrimination claims, but Bryan Greene, the agency’s deputy assistant secretary for Fair Housing and Equal Opportunity, told Miller-McCune.com that he’s “not sure how achievable the congressional mandate of 100 days (to investigate discrimination claims and either close them or bring charges) is.” The agency’s 2009 performance goal of closing out 55 percent of complaints filed within the required 100 days, said Greene, is simply an acknowledgment that certain types of cases — mortgage lending cases among them — are very complex and take longer to investigate thoroughly.
Mortgage Crisis: Practice Makes Perfect
With the rate of foreclosures in the U.S. soaring, discussions of housing tend to be dominated these days by the mortgage crisis rather than the issue of discrimination, but Smith sees them as related, noting that 70 percent of people of color who were sold subprime loans qualified for prime loans. As early as 1996, she points out, the U.S. Department of Justice reached a settlement with Long Beach Mortgage Company to resolve charges that the lender had discriminated against borrowers on the basis of gender, age, race and national origin. Long Beach Mortgage eventually became Ameriquest, one of the nation’s leading subprime lenders — which billed itself as “proud sponsor of the American dream” — before going under last year.
A fiscal-year 2003 HUD budget document stated that “reports continue to show that abusive lenders frequently target racial minorities, the elderly and women for mortgage loans with abusive terms and conditions.” Smith related the case of an illiterate Georgia man who was sold a loan he could never have repaid on his fixed income, and pointed to the example of Philadelphia, where in the 1990s predatory lenders targeted older African-American women with relatively high home equity for high-interest adjustable-rate loans, leading to repeated refinances and eventual foreclosure for many (see the extensive study conducted by The Reinvestment Fund). “They (subprime and predatory lenders) started out practicing on people who just didn’t know better, or, in Philadelphia, these were people who had no bank in the neighborhood,” she charged.
Smith acknowledges that the smaller lenders operating in disadvantaged communities were not the same behemoths, like Countrywide and New Century, which figured so prominently in the current mortgage debacle. But she also notes that ARMs, which she says were initially targeted to high-income borrowers with appreciating properties, became popular when Wall Street started offering premiums to lenders for those products.
“The subprimes started pushing the ARMs, because everybody made more money on that loan,” Smith said, maintaining that the aggressive widespread marketing of ARMs began in minority communities. “Once they saturated the black (housing) market, the real estate industry carried the product to the white working- and middle-class family by saying, ‘I can get you into more home.’”
Toward an Integrated Future
The second expressed purpose of the Fair Housing Act was to promote residential integration, but according to NFHA figures, the typical white metropolitan American lives in a neighborhood where 80 percent of the residents are white.
Some scholars have argued that residential segregation is simply a result of people’s preference for living among others like themselves. However, while the 2000 HUD study showed housing discrimination generally declining, it noted a troubling rise in geographic steering — some realtors’ practice of showing homes only in neighborhoods predominantly populated by residents who are the same race or ethnicity as the potential buyers, regardless of the buyers’ expressed wishes.
Smith contends that white flight is often artificially induced as well. “There are clearly racists who, when a person of color moves in, are going to move. But that’s not the majority of people in a community,” she insisted. “The people who flee are enticed and pushed, and fear is put in them to go.” According to Smith, rapid racial change in a neighborhood is frequently driven by real estate agents looking to generate sales. Like steering, this practice — called block-busting — is illegal.
Both steering and block-busting are attempts to contravene residential integration, although Smith allows that “a white person’s definition of integration and a black person’s are different.” A 1997 study bears her out, finding that a majority of blacks would prefer living in a neighborhood where half the residents were black and half were white, whereas less than a third of whites surveyed said they’d consider moving into an attractive, affordable house in a neighborhood with eight black families and seven white families. (However, more than 80 percent of whites surveyed in three major metropolitan areas said they would be comfortable living in a neighborhood that was one-fifth black.)
There may be an economic motivation for the reluctance of whites. A 2001 Brookings Institution study found that for every dollar of income earned, black homeowners had 18 percent lower home value — what it dubbed a “segregation tax” that the study’s author attributed primarily to the high degree of residential segregation that persists throughout the nation. “Within a majority black neighborhood, white homeowners as well as black homeowners were victimized by the ‘segregation tax,’” noted the study, which found that even affluent neighborhoods with a nonwhite majority had lower home values than comparable majority-white neighborhoods.
Pointing out that “schools largely determine where young, middle-class families choose to buy homes,” the report on the “segregation tax” also declared, “High-poverty, inner-city schools cannot be incrementally improved; they must, in effect, be converted into majority middle-class schools through changes in enrollment policies.”
The recent U.S. Supreme Court decision striking down voluntary integration programs in Seattle and Louisville that used race as a factor placed limits on the methods schools can use to achieve desegregation, but Smith echoed the report’s recommendation: “The civil rights education community (is) now going, ‘We have to deal with fair housing,’ when we think fair housing was the root of the solution from the beginning. … Whites — particularly younger whites — are starting to understand the value of having different cultures, different races, in a community so their kids don’t grow up isolated.”
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