By Maria Krysan & Allison K. Bethel (click here for the PDF)
In November 2020, the nation’s largest real estate trade association, the National Association of Realtors®(NAR), formally and publicly apologized for its role in contributing to racial inequality:
“What Realtors® did was an outrage to our morals and our ideals. It was a betrayal of our commitment to fairness and equality. I’m here today, as the President of the National Association of Realtors®, to say that we were wrong. We can’t go back to fix the mistakes of the past, but we can look at this problem squarely in the eye. And, on behalf of our industry, we can say that what Realtors® did was shameful, and we are sorry… Because of our past mistakes, the real estate industry has a special role to play in the fight for fair housing.”
NAR President Oppler cited, among other things: (1) NAR’s opposition at the time to the Fair Housing Act of 1968; (2) its denial of membership in NAR based on race and sex; and (3) NAR’s being complicit in redlining. The association laid out a plan to become a leader in Fair Housing, as its Vice President of Policy Advocacy, Bryan Greene, explained at the time: “Now we are talking about expanding the Fair Housing Act in ways we could not have imagined perhaps several decades ago.”
Currently, NAR aligns its “duties to the public” to the mandate of the Fair Housing Act—as reflected in its code of ethics and standards of practice, which focus on non-discrimination in the treatment of clients and the advertising of housing. Most recently, in November 2020, NAR added a prohibition against “harassing speech, hate speech, epithets, or slurs” against protected classes as well.
Unfortunately, it is increasingly clear based on what we know about how segregation is perpetuated, that ensuring non-discrimination in the sale and advertising of housing and prohibitions against harassing speech are insufficient to tackle the inequities that have been created by residential segregation. Decades of racist housing policies at the local, state, and federal level; practices by the real estate industry; and white residents who took action to maintain their segregated white communities, together created the segregated cities of our nation. And there is now substantial momentum built into the system, so that disrupting residential segregation will require a broader array of tools than merely stopping discrimination (though we obviously need to do that too).
An industry working to reimagine the Fair Housing Act must create its new vision in a way that is informed not only by the historical policies that baked segregation into our cities, but also by a clear understanding of how the legacy of segregation impacts how its clients navigate their housing searches. In Part 1 of this article, we amplify the contemporary causes of persistent segregation and review the legal context that the industry operates within. In Part 2, we offer specific suggestions for the industry as it seeks to reimagine the Fair Housing Act and its role in supporting integration rather than perpetuating segregation.
How the Housing Search Process Contributes to Residential Segregation1
In their book, Cycle of Segregation: Social Processes and Residential Stratification, Maria Krysan and Kyle Crowder point out that residential segregation has become a self-perpetuating system. It is partly maintained by the drivers of segregation that have informed academic and policy discussions for decades: racial differences in income and wealth (itself, in part, a product of segregation); preferences driven by racial prejudice and experiences of discrimination; and discriminatory practices by government and the real estate industry. But even if all of these were eliminated, segregation would persist because of a series of additional factors that shape where people search for homes and then end up living. As we think about how the real estate industry can help work to disrupt the cycle of segregation, we need to keep two features of the housing search in mind: (1) searchers rely on incomplete information about their options and use shortcuts to decide where to look; and (2) social factors shape what people know—or think they know—about their housing options.
People Take Shortcuts to Guide Their Housing Search
On the face of it, this first feature of housing searches appears to have little to do with segregation or race but is simply a function of the limits of human beings when making complex decisions like buying a home. Specifically, neither real estate agents nor the clients they serve process information like a computer. Clients do not approach a search with complete and accurate information about every possible community or housing unit that might be available to them. They cannot absorb every detail about a community as they decide where to consider or not consider moving. Rather, people use shortcuts to eliminate large numbers of possible neighborhoods or communities before settling on a handful to pursue in detail. As research shows, often this decision about the handful of places to search is made prior to contacting a real estate agent and without relying on meticulous and careful research into census data about neighborhood and community features. Instead, people take shortcuts, one of which is that if they know one detail about a place, they often assume they know a lot of other things about it.
And here’s where race and its legacy can interfere in the housing search process.
In a segregated city, the one detail people often know (or think they know) is a neighborhood or community’s racial composition. Based on that assumption about the racial composition of a community (which may or may not be accurate), searchers imagine they also know about its school quality, safety, property values, and the like. These assumptions lead people to quickly eliminate lots of possibilities as they zero in on the handful of places where they will search.
This means that although the process of using shortcuts to eliminate places is neutral because race is such a prominent feature of many cities, the use of these shortcuts (often connected to race) will regularly have a racial consequence.
People Build Perceptions and Knowledge of Communities and Neighborhoods Throughout Their Life
The second feature of housing searches that ties to the perpetuation of segregation relates to how people accumulate knowledge about neighborhoods and communities. Even when not looking for a place to live, people are constantly gathering information about the communities and neighborhoods where they live. They assemble impressions of communities and receive subtle—and sometimes not-so-subtle—advice about where one should and should not live.
This information comes from three primary sources: our social networks, lived experiences, and the media.
Social networks—our friends, family, co-workers, neighbors, and acquaintances—all shape the places we’ve heard of and the communities we become aware of. This can be through visiting our friends and family in their neighborhoods, but it can also be based on simply knowing where they live and hearing indirectly about what it’s like.
If and what we know about communities is also shaped by our lived experiences. These are the places we are exposed to through living our lives: where we work, shop, worship, play, and go to school. It includes the routine places we pass through every day. But it also includes the places we occasionally travel to or through, like when we take our children to soccer games or swim meets or when we visit a town to attend a festival, concert, or go shopping.
Finally, in the absence of personal networks or lived experiences, the media often fills in the gaps of our community perceptions and tells us what a place is like, what kind of people live there, and whether we might like to live there. This media can be wide-ranging, from local news to print media to movies, TV shows, ads, songs, neighborhood listservs, and social media.
In a segregated city, all three of these things—social networks, lived experiences, and the media—are racialized. When our social networks are segregated (which they often are in a segregated city), the information flowing from those networks funnels us into segregated neighborhoods. Our lived experiences flow directly from segregation, which means that in a segregated city, our lived experiences—and the communities they expose us to—are segregated. And, finally, media—social and otherwise—often paint biased pictures of communities, particularly communities of color. So these seemingly neutral features of housing searches are anything but neutral because they are constructed through daily activities, networks, and media exposures shaped by racial segregation.
Understanding the Dual Legal Context of Fair Housing
From the 1930s – 1960s, the legal system baked racial segregation into our cities through explicit laws, policies, and practices (restrictive covenants, redlining, zoning, blockbusting, public housing siting, etc.). These laws and practices confined people by race geographically and mentally, creating many of the social networks and lived experiences impacting our housing searches today. They also fueled negative images of what it looked like to live in or near people of color and fostered stereotypes about things like crime and housing values that remain today.
The legal foundation for efforts around integration and fair housing was the landmark legislation passed in 1968 in the wake of Martin Luther King, Jr.’s assassination. The Fair Housing Act of 1968 made it illegal to refuse to rent or sell to people based on race, color, religion, and national origin. Sex, disability, and familial status were added later. Additionally, the law imposed an affirmative mandate on governmental agencies to promote fair housing. While advancements have been made since 1968, racial segregation is alive and well today; and while the legal system does not support segregation explicitly in the same way, it is still part of the problem.
Creating the Boundaries – Steering
Steering – the practice of directing people to a particular area where their race predominates or away from an area where their race does not predominate – is an effective method of creating and maintaining segregated neighborhoods. It sets up demographic patterns that impact social networks and lived experiences for generations. HUD’s most recent national housing audit (2010) found that steering was one of the most common forms of race-based housing discrimination in the U.S.
Prior to the passage of the Fair Housing Act, steering was expressly authorized in ethical guidelines for real estate agents. The guidelines specifically prohibited sales or rentals to “members of any race or nationality, or any individual whose presence will be clearly detrimental to property values in a neighborhood.” In 1972, the U.S. Supreme Court recognized in Trafficante v. Metropolitan Life Insurance Co that, in addition to creating separate and unequal neighborhoods, steering deprives people of the social benefits of living in an integrated community.
Subsequent cases that recognized harms flowing from steering include stigmatizing a neighborhood or people even if the statements about the racial makeup are true. While real estate agents were primary culprits, other industry professionals steer too, such as property managers, owners, leasing agents, etc. For example, it is well documented that mortgage industry professionals contributed to the financial meltdown of the early 2000s as people of color and other protected classes were steered to predatory loans destined for failure. As these loans collapsed, neighborhoods and lives were also destroyed.
With the passage of the Fair Housing Act in 1968, steering became illegal. But that does not mean it stopped. The latest mutation of it is digital steering. Search engines and algorithms now steer people to places and things based on race or other protected characteristics discerned from computer usage. In 2019, Facebook settled a fair housing case alleging digital steering where users of color who were seeking housing were directed to minority neighborhoods.
The current housing search processes outlined above, which contribute to the cycle of segregation, are themselves a consequence of real estate practices—both past and present. Thus, an industry seeking to “do Fair Housing like never before” must recognize that clients come to their offices with an understanding of the market that has been shaped by race, and that past legal and illegal efforts by the real estate industry (and others) created segregated cities. It will take more than simply not discriminating or refraining from racial harassment to overcome this cycle of segregation. Proactive steps are called for—and are in line with the mandate of the Fair Housing Act to affirmatively further fair housing, the legal context for which we turn to now.
Affirmatively Furthering Fair Housing
Much of the way we have enforced Fair Housing in this country has focused on stopping bad practices like steering. We have not, until recently, focused much on how we can proactively promote fair housing. The courts recognize that the Fair Housing Act has two purposes – eliminating discrimination and promoting integration. But the law on promoting integration has been slow to develop.
Even though the provision requiring governmental agencies to “ affirmatively further fair housing” (AFFH) was in the Fair Housing Act from the beginning, it did not receive much notice until 2007 when the case of United States ex rel. Anti-Discrimination Center of Metro New York, Inc. v. Westchester County, 495 F. Supp. 2d 375, 376 (2007) was filed. This case applied the federal False Claims Act, rather than the Fair Housing Act, to Westchester’s obligation to affirmatively further fair housing and claimed that Westchester falsely certified it was affirmatively furthering fair housing to receive millions in federal funds. In granting partial summary judgment for the plaintiffs, the court found the certification requirement was not perfunctory; rather, it was a substantive requirement rooted in the history and purpose of the Act.
What Does All This Mean for a Real Estate Industry Seeking to Reimagine Fair Housing?
From a legal context, following Westchester, interest in affirmatively furthering fair housing was heightened. Local governments scrambled to reexamine their actions. HUD, the federal agency charged with enforcing the FHA, issued new rules on it. It looked like the dawn of a new day—until politics stalled implementation of the new standards.
From the standpoint of the real estate industry, the racial reckoning of the summer of 2020, following George Floyd’s murder, seems to be signaling the dawn of yet another new day. Whereas historically, there has been little discussion of formally extending the concepts of affirmatively furthering fair housing to real estate agents or others in the private market, the recent efforts by NAR and other industry professionals signal an appetite to begin such a long-overdue conversation. History has shown that we need both the private market and government to be involved if we are to advance the cause of racial justice.
Given the power of the real estate industry to shape residential outcomes, an industry committed to reimagining Fair Housing should aspire to be more than a cog in the wheel of that system. It is not sufficient to stop discriminating (though that needs to happen too) because explicit discrimination is not the only factor restricting choices and hurting our cities. The industry must work to disrupt the cycle. And that means talking about race, not hiding from it.
From a legal standpoint, it may be that the industry needs to follow the guidance of the great civil rights leader John Lewis and ask what kind of “good trouble” it can get into as it works to do fair housing “like it’s never been done before.” In Part 2 of this article, we offer several concrete ideas that could be undertaken by the industry to start to embrace the spirit of the law, and possibly push the letter of the law in a way that creates greater choices while also disrupting the cycle of segregation.▀
Maria Krysan (firstname.lastname@example.org) is a Professor in the Department of Sociology at the University of Illinois at Chicago and a Senior Scholar at the University of Illinois’ Institute of Government and Public Affairs.
Allison K. Bethel (email@example.com) is a Clinical Professor of Law and Director of the Fair Housing Legal Clinic at UIC School of Law. She is licensed to practice law in Florida and Illinois.
1.) This section of the article is taken from Maria Krysan and Kyle Crowder, Cycle of Segregation: Social Processes and Residential Stratification (Russell Sage Foundation, 2017)
Maria Krysan and Kyle Crowder, Cycle of Segregation: Social Processes and Residential Segregation (2017). New York: Russell Sage Foundation
Jacob W. Faber. 2020. “We Built This: Consequences of New Deal Era intervention in America’s racial geography.” American Sociological Review.85(5): 739-775
Margery Austin Turner et al. “Housing Discrimination Against Racial and Ethnic Minorities 2012: Executive Summary” (2013). Washington, DC: Urban Institute. https://www.huduser.gov/portal/Publications/pdf/HUD-514_HDS2012_execsumm.pdf
Equal Opportunity in Suburbia: Report of the United States Commission on Civil Rights (July 1974) (arguing that to promote integration successfully, a duty to promote integration must also be imposed upon private entities).