August 1, 2003
Not This House!
Many urban neighborhoods throughout the United States, in cities like Boston, Chicago, and New York, are experiencing revitalization and urban-renewal efforts. But racial steering, a form of housing discrimination in which minority homebuyers are shown houses in neighborhoods less desirable than those shown to comparable whites, can prevent even middle class African Americans from purchasing property.
According to Shanna L. Smith, president and CEO of the National Fair Housing Alliance (NFHA), a nonprofit housing organization in Washington, D.C., gentrification is almost always assisted by racial steering, a form of discrimination practiced by real estate agents. “Years ago, they just wouldn’t do business with black buyers,” Smith explains. “Now, they do the business, but will steer whites to white communities and blacks to black or interracial communities.”
Reports by the NFHA show that only about 1% of the annual incidence of such cases is reported. “Real estate agents have a tremendous influence over what a neighborhood will look like in terms of complexion,” says Peter A. Moody of Real Estate Investments, in New York. NFHA has found discrimination on two levels through nationwide testing. It discovered that in targeted underserved areas, properties are marketed to whites as affordable, solid, long-term investments in up-and-coming communities. But blacks are often steered from these communities, told that property prices are overinflated. For example, if a black person qualifies for a $200,000 mortgage and a white person qualifies for one at $190,000, the white candidate will be shown houses in the $225,000 range and the black candidate will be offered homes in the $180,000 range.
“What they will say to the black or Latino homebuyer will always sound like advice,” Smith says. “[Blacks are told]: ‘This will lower your monthly payment and you’ll have money to take a vacation or buy furniture.’ To the white [buyer] they’ll say, ‘If you can push it up to $225,000, this house will appreciate and you’ll be able to recover the difference in a year or two, take out a home equity loan, and do the things you want.'” So how do you fight racial steering?
Make initial inquiries by phone. Call the real estate agent who is handling the property you’re interested in. Without giving away your racial identity, “get all the hard details of the property, including the price, and then make an appointment to see the house,” says Moody. “That gives the broker little wiggle room if, when they see you, they feel differently.” A broker may say, in an effort to cancel an appointment, that he or she has already received an offer. But Moody stresses that having received an offer is not a legal reason to not show property. “Only a signed contract on a house could prevent that.”
Report discrimination. “Thirty-five years after the passage of the Fair Housing Act, discrimination persists virtually unchallenged,” says Smith. “If you’re shopping and finding the agent unresponsive, call your local fair housing center and ask it to send out a white tester.”
Enlist a white friend. If you make an inquiry