NEWS & MEDIA
Photo: Birmingham Civil Rights Institute
FEBRUARY 24, 2020
Agents Could Violate Fair Housing Act Without Realizing It
From Florida Realtors
A massive, three-year Long Island study using paired testing found Fair Housing Act violations by 40% of the agents tested. In many cases, individual acts – such as requesting ID from some buyers but not others – was subtly discriminatory because it affected minority buyers more than white ones.
WHAT REALTORS NEED TO KNOW ABOUT FAIR HOUSING LAWS
A detailed look at the Fair Housing Act and the Florida Civil Rights Act, including legal information on “testers” and 55-plus communities.
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ORLANDO, Fla. – Last November, Newsday shocked the real estate industry with the results of a three-year investigation which revealed “widespread evidence of unequal treatment by real estate agents” in Long Island, NY – an area that remains segregated despite fair housing laws enacted in 1968.
“The investigation was designed to answer this question: Was the real estate agent and the industry that has to follow fair housing standards involved in any way with creating the segregated neighborhoods that have persisted on Long Island for so long?” says Newsday Project Editor Arthur Browne.
The Long Island newspaper used a research method known as paired testing in its investigation. Posing as buyers, white and minority testers made identical requests to agents for help finding houses. Each buyer had the same background, including financial. After reviewing 273 hours of undercover video recorded by the fictitious buyers, Newsday found Fair Housing Act violations by 40% of nearly 100 agents at 12 of Long Island’s largest brokerages. Forty-nine percent of black buyers were treated differently than their white counterparts, along with 39% of Hispanic buyers and 19% of Asian buyers.
The investigation revealed that some steering by agents was blatant – a clear violation of the Fair Housing Act. One agent, for example, told black testers that they needed to get pre-qualified for a mortgage before they looked at a home, calling it brokerage policy. However, that same agent did not require white buyers to be pre-qualified. Some agents required minority buyers to show them an ID – a common safety recommendation for Realtors®. But they showed homes to white buyers without a similar request.
“Realtors are not only required by law to abide by the fair housing laws but hold themselves to a higher standard in their Code of Ethics,” says Florida Realtors CEO Margy Grant. “Everyone is entitled to a discriminatory free experience in searching for a home, and Realtors must always take care to ensure compliance of all fair housing rules.”
Unintentional discrimination
Some agents may inadvertently discriminate. Buyers’ agents, for example, know they can maximize profit by A) quickly determining what type of home would be ideal for a customer, B) finding homes that fit this ideal, and C) minimizing the time it takes for a transaction to reach the closing table.
“Any drive to quickly identify and find a property can, inadvertently, lead to a fair housing violation,” says Grant. “While agents ask good questions and honestly try to find the ideal house for a prospective buyer, we, as human beings, pick up subtle clues from personal behavior or dress. It’s those ‘subtle clues’ that can unknowingly lead us to stereotype people who are members of Fair Housing Act protected classes.”
An agent may ask some buyers to get pre-qualified for a mortgage to avoid wasting time – why show homes to someone who can’t afford them? However, it’s a slippery slope if that agent doesn’t require all prospective buyers to get pre-qualified. If Agent A tells 85% of black prospective buyers to get pre-qualified for a mortgage but only 20% of white buyers, it could suggest discrimination and a Fair Housing Act violation.
The investigation found that school quality, or an agent’s perception of school quality, figured prominently in where the agents would send or suggest housing to buyers. Yet, as the National Association of Realtors stated in a 2014 post on its website, “Discussions about schools can raise questions about steering if there is a correlation between the quality of the schools and neighborhood racial composition.” Characterizations about schools with low test scores, for example, or comments that reference a ‘community with declining schools’ become code words for racial or other differences in the community,” the post states. As a result, such comments become “fair-housing issues.”
The letter of the law
Newsday reporters studied agents’ behavior but not necessarily the reasons for that behavior. In some examples, it appears that agents understood Fair Housing Act requirements and made an effort to follow the letter of the law – but not necessarily its intent.
One Long Island agent’s advice to white buyers was consistently “Follow the school bus, see the moms that are hanging out on the corners.” In one case, she told a family with a baby to go to the local 7-11, buy diapers and look around at the other customers. The agent told Newsday after the study concluded, “I have to say it without saying it.”
Newsday’s two fair housing consultants called this type of fair housing abuse “coded language” or “a euphemism” used to steer white testers away from racially diverse neighborhoods.
“There’s nothing inherently wrong with a suggestion to visit a prospective neighborhood at different times of day,” says Florida Realtors Vice President of Law and Policy and General Counsel Juana Watkins. “It may even be good advice. But a problem can arise if that advice is handed out unevenly.”
Be the change
The Newsday writers spoke recently at an Inman conference and said their goal wasn’t to target real estate agents. “We didn’t think Realtors were racist,” Newsday Deputy Editor Keith Herbert said. “What we knew was Long Island had a historical segregation pattern. We just wanted to know if the industry had any hand in continuing this pattern. As a person of color, if I come into your business, I want my dollar to go as far as a white person’s. I want to be able to get the best house in the best neighborhood with the best school district, regardless of my race.”
Newsday writer Olivia Winslow reminded the Inman audience of the power – and responsibility – real estate agents have in their communities. “Real estate agents are the gatekeepers. If you help people find homes in a way that violates fair housing law, that will impact that individual’s life and that individual’s children and the schools they go to.”
“The bottom line is to treat every buyer the same,” says Florida Realtors Associate General Counsel Meredith Caruso. “If ‘Drive around the neighborhood at different times of the day’ is good advice for one of your buyers, it should be advice for all of your buyers.”
© 2020 Florida Realtors®
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