Window to the Law: Fair Housing Update

Window to the Law: Fair Housing Update: Transcript

For more than 50 years, the Fair Housing Act has declared a national policy prohibiting discrimination in housing. And yet, there is still much progress to be made. For example, according to the U.S. Census Bureau, the percentage of African-American homeowners fell to an all-time low in 2019, on top of recent investigations revealing discrimination still occurs in both overt and subtle ways.

The Fair Housing Act prohibits real estate professionals from discriminating in real estate sales or rental transactions on the basis of race, color, religion, sex, disability, familial status, or national origin.

State and local laws often provide even broader coverage and prohibit discrimination on an expanded list of bases such as ancestry, political affiliation, and citizenship status. And, as REALTORS®, you are bound by an even higher ethical standard. Article 10 of the REALTOR® Code of Ethics prohibits discrimination not only on the federally prohibited bases, but also on the basis of sexual orientation or gender identity.

Discrimination occurs any time you use a prohibited basis to treat the same requests for services or housing information differently. For example, suggesting an African-American couple focus their search in a neighborhood because it is predominately African-American, and discouraging them from looking in a nearby neighborhood that is predominately white, is steering, an example of intentional discrimination prohibited under the fair housing laws. Steering is the practice of directing potential buyers towards or away from a particular neighborhood or community based upon a protected characteristic. A 2010 nationwide study conducted by HUD showed that agents placed minority buyers in more integrated neighborhoods at a higher rate than white buyers. And where steering was once blatant and overt, the illegal practice can now be veiled in seemingly objective criteria like school performance or crime statistics.

But remember, intent doesn’t matter; intent is not an element to prove discrimination took place. As a real estate professional, you must be mindful of the discriminatory impact your words and actions may have. The effect of a real estate professional’s actions could be discriminatory if an action or policy, no matter how neutral it may be on its face, results in an unjustifiable impact on persons of a particular background.

Also, keep in mind this common fair housing danger zone that real estate professionals should avoid: inconsistent pre-requisites to providing services. For example, requiring a prequalification letter from African-American buyers, but not white buyers; or only requiring buyers of a certain national origin to show ID before showing them a home; or requiring only Muslim buyers to sign an exclusive buyer’s brokerage agreement before you’ll work with them may run afoul of fair housing laws. Anytime you inconsistently apply requirements, you run the risk of discriminating on a prohibited basis.

As a real estate professional, keep the following tips in mind to avoid fair housing pitfalls, and to further your duty to provide equal housing services to all:

1. Keep any prerequisites to providing services consistent and objective.
2. Provide buyers with listings based on the buyer’s objective criteria for a home, not on the racial, ethnic, or religious makeup of the neighborhood or your opinion of where you think the buyer might like to live. Start by asking buyers objective questions to help identify listings to meet the buyer’s criteria. What specific elements are they looking for in a home? What’s their price point? Are they looking for a certain commute time to work or distance to a relative’s home.
3. Avoid giving your personal opinion about a community or area, even if your client asks. Instead, guide buyers to third-party sources that can answer their questions about neighborhood-specific information, like school ratings and crime statistics, allowing them to reach their own decision.

REALTOR® members across the country have both the opportunity and responsibility to increase efforts to support diversity and inclusivity in the real estate market. Check out NAR’s Fair Housing Toolkit for additional resources to expand your understanding of and compliance with your responsibilities under the fair housing laws.

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