Most people in the United States are familiar with the story of Rosa Parks, but just in case, a refresher: Parks is a household name because she symbolized one of the many breaking points in the racial tension in the American South in the 1950s, and the blatant discrimination against her was evident. She was denied a basic right because of the color of her skin when Montgomery, Alabama, city bus driver James Blake asked her to move so that a white passenger could take her seat. This was legal in Montgomery at the time, and when Parks refused, two Montgomery police officers arrested her.
Parks’ story is, on the surface at least, pretty easy to understand — in fact, we teach school children about Rosa Parks and the Montgomery Bus Boycott because when it’s boiled down to “black” and “white,” it’s easy to for kids to understand. To make these topics more “teachable” — and more palatable to adults — we round off the edges and skip over the nuance.
We do this because discrimination is a difficult and multilayered topic. Discrimination is widespread society-based subjugation based on features such as race, color, sex, religion, national origin, disability, or familial status. It’s the invisible confluence of forces that keeps the “haves” and the “have nots” on different sides of the tracks. And it’s a very subtle yet pervasive thing — it seeps into every aspect of our lives from our schools to our jobs to our homes.
Housing discrimination, in particular, influences systemic racism at multiple levels and has a number of causes and contributors, making it an especially difficult topic to parse. (This could be one big reason why we don’t teach school children about it along with the Montgomery Bus Boycott.) A quick look at three widespread housing discrimination terms you should know and understand will show that the real estate industry and the law have often been at odds.
When it comes to housing discrimination, a lot of thought has gone into bringing both unconscious and conscious biases to the surface. Major court decisions have helped shape both the conversation and the practical realities of housing discrimination in America, but this topic is far from exhausted. That’s why it’s important to have a clear understanding of basic housing discrimination terms around the three most common real estate-specific discriminatory practices.
What is housing discrimination?
Housing discrimination is a term that describes policies that affect a person’s ability to rent or buy property.
Seems pretty simple, right? Well, it is and it isn’t.
Although the laws that govern these policies are well-intentioned, sometimes the protections can be a little off the mark. For example, we know that ground-floor apartments are more prone to break-ins than upper-story units. However, anti-discrimination laws prevent landlords from even suggesting that single female tenants might not want to rent on the ground floor, even though they could feel safer upstairs.
This would be an example of discrimination based on sex: Our hypothetical landlord, though trying to do the right thing, may also be discriminating against men who may also prefer an upper-floor unit. Directing a tenant to one unit over another based on a variable such as the tenant’s sex is discrimination, and it is illegal because of the protections put in place by the Fair Housing Act.
This is just one example of one form of housing discrimination, which is called “steering.” Housing discrimination is addressed by one landmark bill: the Fair Housing Act.
The Fair Housing Act
Passed into law in 1968, the Fair Housing Act is a federal mandate against discrimination based on certain protected classes.
The law states that homeowners (sellers), banks or lenders, appraisers, landlords, or other real estate professionals cannot legally do any of the following to renters, buyers, or sellers based on a protected class:
- Refuse to rent or sell a property that’s available
- Refuse to negotiate
- Make housing unavailable
- Provide different terms for protected classes
- Set different conditions or privileges for buying or renting property
- Deny access to or membership in a facility or service related to housing (such as an HOA), or provide different services or facilities to protected renters or buyers
- Discriminate in advertising
- Use different qualification standards or applications
- Evict or harass tenants or guests
- Fail to maintain or repair rental property, or delay repairing rental property
- Assign different tenants to specific buildings, neighborhoods, or sections based on a protected class
- Try to persuade homeowners to move because neighborhood demographics appear to be changing (also known as blockbusting — more on that later)
- Impose different rates or terms on a loan (for lenders)
- Refuse to make a loan (for lenders)
- Discriminate while appraising a house (this one is for appraisers only)
Exactly who is included in those protected classes?
Everyone! That hypothetical man in his hypothetical ground-floor apartment is protected by his membership in a protected class: sex.
It’s common to think that people protected by these laws are “minorities” of some kind. And that association is based on the reality that marginalized people are generally (though not always) the ones who suffer the most from the discriminatory practices that these laws are intended to address.
But in practical terms, everyone (as in everyone-everyone) belongs to multiple protected classes as defined by the Fair Housing Act:
- National origin
- Familial status
Conspicuously missing from this list: sexual orientation, gender identity, and gender expression.
While about half the states in the U.S. offer additional protections against discrimination based on sexual orientation and gender identity and expression, it follows that about half do not.
What does this look like in practice?
We have a clear picture of what discrimination looks like on a case-by-case (or class-by-class) basis, but what does it look like if we zoom out?
Unfortunately, the real estate industry has practiced systemic discrimination in the past, and many argue that these problems have not gone away. You’re probably somewhat familiar with these terms, but let’s take a closer look at the three most prevalent housing discrimination terms.
This is when real estate agents “steer” clients from different backgrounds (also known as protected classes) toward certain neighborhoods or away from others, either by advising them to buy a house in one area, or by failing to show them or tell them about houses in other areas that fit their needs and budgets.
This practice leads to massively problematic outcomes and is a clear-cut example of forced segregation. As a nation (by way of a seminal court decision), we’ve come to agree that “separate but equal” is not realistic and does not lead to equality. Steering has been illegal since the Fair Housing Act was passed.
Isn’t steering a problem of the past? Sadly, it’s not. As recently as November 2019, investigative journalists at Newsday found that agents steered clients (or at least strongly appeared to do so) in 21 out of 86 test cases, a disheartening 24% of the time.
This is when agents or developers convince white homeowners that the neighborhood demographics are shifting dangerously with the influx of people of a different race or class.
The agents and developers (or blockbusters) tell homeowners that they, and their way of life, are in danger, and that local property values will plummet. In short, blockbusters urge white homeowners to get out, quick.
So they sell low. And when they do, often the blockbusters are right there to re-sell the home, often at inflated prices, to BIPOC (Black, Indigenous, and people of color).
Another effect of blockbusting is “white flight” — white homeowners selling and moving out of neighborhoods where they perceive the racial demographics are shifting.
On top of all the deceit involved in carrying out this act, the result is the same as racial steering: segregation. Separate, but not equal.
Blockbusting reached its peak after World War II and has largely died out since the 1980s, although it, too, has been illegal since the Fair Housing Act was passed. However, research indicates as recently as 2018 that white flight (especially from middle-class, suburban neighborhoods) is still a persistent and pervasive issue. It’s not blockbusting, but white flight is related and has similar long-term effects.
Redlining is a discriminatory practice based on demographics; where real estate is concerned, it mostly involves mortgage lending.
Redlining is when either a private company (such as a bank or mortgage lender) or a government agency provides different services to different neighborhoods based on the proportion of minority residents in those neighborhoods. Redlining drew its name from the practice of using a red line to denote predominantly minority neighborhoods separately from predominantly white neighborhoods; the term was coined by sociologist John McKnight in the 1960s. Redlining is one of the most overtly racist housing practices in recent history.
It’s probably useful here to remember what is meant by the term “minority.” In discussions like these, the term extends beyond its use as a relative measurement of “more” or “less”; in this context, “minority” doesn’t mean that there are fewer of a certain type of person in a particular population, but it does mean that those people are socially and economically subordinate to either a larger or more dominant class (or a class that’s both larger and more dominant).
For private companies like banks, redlining often means denying or offering fewer and less favorable mortgages in those areas than in other neighborhoods. “Reverse redlining” occurs when a lender doesn’t overtly refuse to lend in a certain area, but instead charges more fees, higher interest rates, or offers much less favorable terms for mortgages in certain ZIP codes or neighborhoods. Basically, it’s stacking the odds against minorities and in favor of the dominant group, which in the United States is demographically white.
For the government, this can often mean building public housing for different races in vastly different areas of the city, zoning for more industrial development around BIPOC neighborhoods, and other location-based discrimination that disproportionately affects the minority populations of certain neighborhoods.
Redlining can include (but isn’t limited to):
- Denying conventional mortgages to people in redlined neighborhoods
- Denying federally backed mortgages to people in redlined neighborhoods, such as FHA loans or VA loans
- Reverse redlining: Charging people in redlined neighborhoods more for the same mortgage
- Denying other types of loans (such as student loans or auto loans) to people in redlined neighborhoods
- Refusing to insure properties in redlined neighborhoods
- Municipalities or counties zoning areas with environmental hazards closer to BIPOC neighborhoods
- Lowballing: A type of redlining that affects BIPOC sellers, which involves appraising a home at a disproportionately low value
- Retail redlining: A type of redlining that involves refusing services to certain areas (such as taxis or deliver services) or chain stores setting higher prices in predominantly minority areas
- Digital redlining: Using technology to perpetuate redlining issues; this can include (for example) issues such as targeted advertising practices that you find on platforms like Facebook
- Political redlining: This can include tactics as nefarious as outright voter suppression, but it also includes practices such as campaign managers targeting areas where more “likely voters” have been identified and ignoring areas with fewer likely voters
Like racial steering and blockbusting, redlining contributes to an ongoing, vicious cycle of wealth inequality. The cycle of poverty (or, its counterpart, generational wealth) is perpetuated by access to homeownership. While the cycle is dependent on many factors, when buyers and homeowners are targets of housing discrimination, the critical blow to one of the most cherished promises of the American dream ripples through generations.
That might sound like hyperbole, but we know these practices lead to a loss of generational wealth, and there is also compelling evidence that the practice of redlining has direct, observable negative health outcomes for people relegated to “undesirable” redlined neighborhoods.
Getting the bus back on track
Often, discrimination is inconspicuous. It’s present in our unconscious choices, silently shaping our world view and guiding all of our decisions. We have all been subject to, the witness of, or the perpetrator of discrimination, and that’s because bias is a wily thing: it’s completely obvious when we see it, as we all do with Rosa Parks on the bus, but it can be more difficult to discern in a complex topic such as housing discrimination.
Blockbusting, racial steering, and redlining are difficult topics, but gaining a deep understanding of these three terms is critical to understanding the past, present, and future of housing discrimination in America — and how to rectify the damage that’s been done to BIPOC renters, buyers, and sellers.
Header Image Source: (Ewelina Wachala / Shutterstock)