As any homebuyer or renter knows, purchasing a new place to live is a multi-step process. But a lesser known truth about this common practice was recently released in a study from the U.S. Department of Housing and Urban Development. The HUD study findings confirm that you, as a consumer, can fall victim to racial housing discrimination at any point during the browsing and purchasing or renting of a new home, from the first phone call to the sale itself. HUD’s release from more than 8,000 fair housing tests conducted across the country indicates that although blatant discrimination in the advertising and sale of homes may be on the decline, more subtle forms persist with equal consequences to the housing consumer.
Searching For a Home
Before the first showing, homebuyers peruse the availability of homes in their preferred area. Throughout the country, testers found that when contacting agents about advertised residences for sale, black homebuyers learned about roughly 17.0 percent fewer housing availabilities than their white counterparts, and were “shown 17.7 percent fewer homes.”
The First Call: Scheduling an Appointment & Pre-Qualification Process
The 2013 HUD study showed significant disparities in the initial contact between buyer and REALTOR along racial lines, even when it came to sensing racial background over the phone. According to HUD, black “renters whose race is readily identifiable based on name and speech are significantly more likely to be denied an appointment than minorities perceived to be white.” During an in-person visit, renters who are identifiably black “are shown fewer units than minorities who are perceived to be white”. Similarly, homebuyers who are identifiably black…“face higher discrimination during the in-person visit than those who are perceived to be white.”
Significant numbers of testers in certain metro areas (including the Richmond, VA region) were repeatedly denied appointments by housing providers because they had not yet been prequalified. The report cites a case where the black tester called and spoke with an agent who insisted that she must be prequalified in order to see homes. He refused to meet with her until she had talked to a lender. The white tester was not asked about prequalification over the phone, and made an appointment to meet with the agent.
For example, field testers in certain metropolitan areas were so consistently denied appointments based on lack of pre-qualifications that HUD had to grant testing organizations permission to use qualifying dollar amounts over the phone just to schedule a first meeting. These nine localities included
Albuquerque, N.M.; Atlanta, Ga.; Chicago, Ill.; Dallas, Texas; Fort Worth, Texas; Greensboro, N.C.; Miami, Fla.; Washington, D.C. and our own Richmond, Va.
The First Meeting & Showing the House
A significant racial divide was also found when testers first met with real estate agents and were shown houses. In terms of variety of neighborhoods shown, national trends indicate that more homes and apartments are communicated and shown to white homeseekers than to racial minorities. HUD reports that
“agents spend more time with white homeseekers than with equally qualified blacks” and that “in about two-thirds of in-person visits, one tester is shown more units than his or her partner, with whites significantly more likely to be favored than blacks.”
Even an agent’s description of a neighborhood can be tinged with discriminatory language. The report states that:
“whites hear more positive comments about white neighborhoods and more negative comments about minority neighborhoods than do blacks, potentially steering them away from mixed or minority neighborhoods.”
Minority home buyers sometimes experience other forms of discriminatory treatment as well, relating to housing costs and financing, housing quality, and the helpfulness of the sales agent. These differences are less consistent and smaller in magnitude than the differences in numbers of homes available and shown.
But one particularly potent finding from the 2013 study may be the most unsettling – these disturbing trends only amplify when particular cities and towns (localities) are put under the magnifying glass, particularly urban areas.
The unfortunate truth is that even after sale, discrimination can occur during a buyer or renter’s time at their residence, and on bases of a variety of different “protected classes” other than race. The study itself cites the limitation that:
“results reported here probably understate the total level of discrimination that occurs in the marketplace… (and) do not capture all the forms of discriminatory treatment that minority home seekers may experience.”
HUD even indicates that the extent of housing discrimination faced by “minority home seekers with lower incomes, less wealth, weaker English language fluency, or blemished credit” may extend to levels beyond those actually reported this year.
We need to do more. To stop these disparities, it is paramount that buyers, renters and housing industry professionals are educated in fair housing practices.
Enforcement is still a necessity, as HUD states:
“Prejudice has by no means disappeared….minorities still face significant barriers to [their] housing search, even when they are well-qualified as renters or home buyers.”
A strong method to enforce fair housing laws is to have local fair housing organizations increase their proactive testing of the housing industry (the sales market more so than rentals). Another proactive step is to research what specific localities and neighborhoods are experiencing these discriminatory housing practices, in order to pinpoint areas where investigations could really make a difference. Reinvesting in neighborhoods to create equal access to services and encourage diversity is another long-term method to reduce these detrimental disparities facing minority home seekers, renters and owners. It is for these reasons that fair housing organizations like HOME fight for equal opportunity to housing for all, through fair housing policy change, education and enforcement.