The act of steering—guiding potential buyers toward specific neighborhoods based on their identity—is prohibited by the Fair Housing Act. Recent evidence shows, however, that the law hasn’t deterred some brokers and agents from breaking the law.
In November, Newsday released an investigate report, a result of a three-year probe into possible acts of buyer discrimination in Long Island, N.Y., which found that 40 percent of Newsday’s undercover tests showed evidence that “brokers subjected minority testers to disparate treatment when compared with white testers, with inequalities rising to almost half the time for black potential buyers.”
In response, New York Gov. Andrew Cuomo announced new regulations aimed at combating discrimination of minorities by real estate professionals.
“The investigation shows that we haven’t put behind us the legacy of discrimination that has plagued our industry,” Joe Rand, chief creative officer of Better Homes and Gardens Real Estate Rand Realty, told RISMedia. “I don’t think that many of these agents had malice in their hearts, but we haven’t done enough to teach them the ways that bias can involuntarily creep into our decision-making. We have to do better.”
The investigation paired up minority (black, Hispanic and Asian) testers with white testers, giving each set the same general profile to solicit an agent’s help in looking to purchase a home with the same budget. Each tester recorded their interaction with their agent via hidden camera.
According to Newsday, black testers experienced disparate treatment 49 percent of the time, while Hispanic testers experienced this differing treatment 39 percent of the time, and Asian testers 19 percent of the time. Additionally, in seven Newsday tests (8 percent of the total 86 tests), agents were more accommodating to white testers, providing more stringent rules for minorities and denying them equal service.
In almost 24 percent of tests, Newsday reports, agents provided different advice for the paired testers that could be construed as steering. For example, one agent told a black customer that a certain neighborhood in Long Island had “the nicest people.” Meanwhile, that same agent told her white customer to “kindly do some research on the gang-related events in that area for safety.”
This month, Cuomo introduced three regulations that would enforce anti-discrimination education, according to Crain’s New York Business. The New York State Real Estate Board has approved the provisions, and they are now in a two-month public comment period before being enforced.
These regulations will require all licensed agents to provide clients with a state-generated form that provides information on their fair housing rights. Firms will have to post a notice of these rights in the window of all their locations, and all brokerages will have to provide anti-discrimination education—to be recorded with sound and visual footage and saved for a year.
“New York State is taking immediate action to help ensure renters and homeowners are protected from any and all discriminatory actions when it comes to safe, accessible housing,” Cuomo said in a statement. “These new regulations and protocols will help ensure anyone looking to rent or buy a home knows their rights so they don’t fall prey to unscrupulous real estate brokers and landlords.”
“These new regulations not only make it clear that discrimination will not be tolerated, they will also help New Yorkers better understand their rights when looking for a place to call home,” said Rossana Rosado, Cuomo’s secretary of state, in a statement.
The National Fair Housing Alliance (NFHA) recently released a report, “Fair Housing Solutions: Overcoming Real Estate Sales Discrimination,” providing several solutions for the industry, as well as government agencies, for ending discrimination:
- More funding for fair housing testing, education, enforcement and research
- Increased agent diversity in real estate with more offices in communities of color
- Better content and training for industry professionals on complying with fair housing laws
- Improving fair housing investigations and implementing more serious consequences against violators
- Preserving HUD’s 2014 Disparate Impact Rule
- Preserving HUD’s 2015 Affirmatively Furthering Fair Housing Rule
“The problem of discrimination in real estate sales is not going away on its own and it is not exclusive to Long Island. It’s time for real estate associations and state and federal regulators to step up and implement actions that will fix what is clearly a broken industry,” said Lisa Rice, president and CEO of NFHA, in a statement. “The number of housing discrimination complaints is at its highest in years. The good news is that we have the tools to make changes, but we need industry officials, real estate agents, and enforcers to be willing to use them.”
National Association of REALTORS® (NAR) President Vince Malta provided the following statement:
“While NAR has long been a champion of the Fair Housing Act, recent incidents have underscored the progress our nation must still make. Governor Cuomo’s proposals continue to reflect our societal understanding of the collective need to do more, and we believe REALTORS® across the country must work with their state and local government leaders to combat issues that arise in each community.
At the national level, REALTORS® have redoubled our commitment to pursuing equal access to housing for all Americans. Back in September we created a 45-member Fair Housing Committee to further elevate these critical issues and, earlier this month, NAR sent a letter to Congressional leadership urging them to secure adequate funding for fair housing activities at HUD.
As we stated immediately following the report’s release, NAR was deeply troubled to review the results of Newsday’s three-year investigation into how real estate agents on Long Island treat buyers of different backgrounds, which does not reflect the ethical commitment made by 1.4 million REALTORS® nationwide. Housing discrimination violates NAR’s Code of Ethics, and there is no place for this behavior in our industry, our society or our world.”
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at email@example.com.