By Allison K. Bethel & Maria Krysan (click here for the PDF)
Real estate agents who endorse the National Association of Realtor’s® “Fair Housing Declaration” promise to “Take a positive approach to fair housing practices and aspire to follow the spirit as well as the letter of the law.” Keeping in mind the complex web of causes of contemporary patterns of segregation, as outlined in Part 1 of this article, and the crucial role that real estate agents play in marketing housing and – often without realizing it—perpetuating segregation, we make the following suggestions about how the industry can reimagine its role in expanding Fair Housing.
Revisit Fair Housing Education for Real Estate Agents
Despite the complexity and nuance surrounding the legal context of the Fair Housing Act—where steering is prohibited, but proactively promoting integration is required—research suggests that the industry does not educate agents in this complexity.
For example, in a recent ethnographic account of licensing curriculum in New York—where the requirement is four hours of Fair Housing training—Max Besbris (2020) found that what passed for training on fair housing “lacked substance and nuance.” The primary emphasis of the curriculum was on making sure that agents-in-training knew the year when the Fair Housing Act was passed, who it covers, and how to define such terms as redlining and steering. As Besbris (2020, p. 103) described it, “Much of this instruction focuses on enforcement rather than conveying the desirability of a more equitable housing market. In the textbook provided by a Manhattan licensing school, the first page of the chapter on fair housing warns aspiring real estate agents about testers working for the state or federal government who pretend to be buyers asking questions that agents legally cannot answer.”
Findings from HUD’s 2010 housing audit, a recent ethnographic study by Elizabeth Korver Glenn (2021), and Newsday’s (2019) investigation into housing discrimination on Long Island, are just three vivid reminders that the industry has agents who continue to operate in a way that explicitly supports segregation and violates the Fair Housing Act. The industry should identify ways to hold accountable those who violate the non-discrimination elements of the Fair Housing Act, and real estate agents who are guided by racist principles and racial stereotypes of both buyers and sellers should not be allowed to be involved in real estate transactions.
But what is insidious is that segregation will persist even without such people, which means that Fair Housing training also needs to be more nuanced.
Given the racist foundations of this industry and how the vestiges of that racism impacts—subtly and not so subtly—the day-to-day operations of the real estate market, much more needs to be done. Licensing curricula need to be updated to reflect the complex and continuing forces that perpetuate segregation. This includes such things as the social factors that impact who shows up in real estate offices looking for help; how segregation itself shapes the neighborhoods clients tell their agents they want to live in; and the assumptions and stereotypes clients hold about neighborhoods that are often not based in fact. Agent education that unpacks the sources of neighborhood stereotypes, the persistent causes of inequality and disinvestment, and the easy use of stereotypes by clients and agents alike in making decisions about places to move—or to recommend one’s clients move—is needed.
To evaluate the effectiveness of such bolstered training, agencies could do self-testing. Like “secret shoppers,” fair housing testers are trained to pose as home seekers and inquire about housing opportunities, and the results of these tests can be used to support or refute a claim of discrimination. Industry professionals generally fear testing because it has been so effective in exposing their illegal activities in fostering discrimination. The FHA contains a provision allowing for industry self-testing, but it is rarely done, likely out of fear of the results. But the Act includes protections on the use of test results and some incentives to encourage use. If agencies are serious about examining their practices, self-testing could help in their efforts.
Expand Real Estate Agent Education About Integrated Neighborhoods in Particular
From the standpoint of what the real estate industry could do to follow the spirit of the law of fair housing, and to affirmatively further fair housing and support integrated communities, it is useful to remember that many of the same factors that shape individual homebuyers’ perceptions of communities and neighborhoods also impact real estate professionals’ perceptions. Their professional (and personal) social networks are likely segregated—both at the individual level, as well as at the level of their office, agency, and firm. The lived experiences of agents—again, both personal and professional—are often racially distinct. The media that industry actors consume about communities and neighborhoods overlaps with what their clients consume.
Real estate agencies can identify creative ways to provide their agents with opportunities to learn more—and more deeply—about all the neighborhoods and communities in their market. There have been innovative efforts in this regard around one neighborhood feature in particular: school quality.
Substantial research has demonstrated that people’s assumptions about school quality are shaped by assumptions about racial composition and test scores. And online search tools reinforce that limited perspective. But efforts like the Pasadena Schools program help enrich real estate agents’ knowledge about school quality through lived experiences (agents volunteer in the schools and take tours). And in the Quad Cities, real estate agents plan to work together with school leaders to create materials that allow schools to provide “fair, accurate, comprehensive details about the schools—not just test scores.” Efforts like these can help expand real estate agents’ understanding of the market beyond what their social networks, lived experiences, and the existing media tell them about neighborhoods and communities. And these experiences, and any corresponding marketing strategies that flow from them, can proactively address and break down what are often negative media messages about diverse neighborhoods.
Real Estate Office Locations, Staffing Practices, and Operations
Above and beyond providing specific opportunities for agents to learn more about communities in their market, and agency marketing efforts flowing from those efforts, there are other institutional strategies the industry should consider.
For example, we know that the real estate industry is itself racially segregated—with Black agents more likely to serve Black clients and offices marketing white neighborhoods more likely to be staffed by white agents. And we know that many brokers focus on specific areas and consequently do not know other areas outside their own often segregated circles. And even if they do know of them, they may hold conscious or unconscious biases against them because of historical or media stereotypes.
Thus, the industry could turn an eye on its institutional practices, including the location of its offices and how it hires and mentors its agents to break down this segregation and build up their individual and collective knowledge base. Agencies should ask themselves: Are we locating our offices so that we can market the entire city? Do we have more offices and agents in predominately white neighborhoods than in diverse or predominately Black neighborhoods? Do we have mentoring programs set up to help disrupt these segregated practices? What are we doing to ensure that our staff is diverse and knowledgeable about all parts of a city?
As offices move to the cloud, agencies should also ensure that their websites are accessible and welcoming to clients of all races and ethnicities. Attention should be given to words and images with a view towards actively promoting fair housing principles. As an example, most agencies include the minimum equal opportunity sentence in promotional materials. But the print is usually small, and thus its message is easily overlooked. These messages could easily be enhanced in both form and content to promote equitable housing.
Addressing some of these things can help address others. For example, diversifying offices would create organic opportunities for staff education and cross-fertilization so that agents’ knowledge of communities is more robust and breaks out of their siloes—siloes created and perpetuated by a system that is much bigger than any given individual.
An example of what not to do is seen in the recent fair housing complaint filed against Redfin, an online real estate company. According to the complaint, Redfin redlines minority neighborhoods – the same kind of redline that was drawn pre-Fair Housing Act – and does not do business there. It also has a policy to not do business in areas where the homes fall below a minimum home value because it is not profitable for the company. Redfin has this practice, it states, because it cannot pay a living wage to agents serving poorer neighborhoods.
This rationale is a perfect example of the cycle of segregation at play today. Most of the neighborhoods that meet these criteria were created by decades of redlining, steering, and predatory lending practices, both before and after the passage of the Fair Housing Act. Redfin’s approach is no way to address the systemic racism that deflated these property values to begin with; it simply punishes the victims of discrimination a second time. At a time when we need to uplift communities of color depressed by decades of oppression, this business model furthers the cycle of segregation.
Allow Agents to Promote Integrated Communities – Break the Cone of Silence
Today’s real estate professionals generally refuse (and are taught as much, as we saw above) to discuss race or other factors contributing to neighborhood diversity, fearing they will be sued. Much like the failed “don’t ask, don’t tell” policy of the military, real estate agents often refuse to discuss race even if the client raises it. To be sure, this is tricky territory. But what we do know is that the cone of silence strategy is not working because it neither stops real estate agents from discriminating through steering nor does it promote fair housing.
On the one hand, to be clear, racial steering in service of segregation is still happening under the cone of silence. It is just on the down-low. For example, agents can circumvent the cone of silence by providing racial information through code (using the adjectives “urban” or “changing” to signal to white clients (usually) that a neighborhood has Black people living in it) and selective website referrals (which have their own data biases). Such methods are difficult to police because advocates must prove what the code words mean and how the home seeker understood them. A claim involving the statement “we don’t rent to Blacks” presents a more straightforward legal case of racial discrimination than one where the statement is “we don’t rent to voucher holders” (except in those areas with source-of-income protections).
On the other hand, the prohibition against speaking about a community’s racial composition or the value of living in a racially diverse community means that clients who are explicitly seeking out racially integrated communities are met with a wall of silence when they ask their agents for suggestions. Agents who might otherwise offer advice and suggestions to such clients in the spirit of the Fair Housing Act’s mandate to affirmatively further fair housing do not do so if they feel that they cannot discuss it. There is little to no guidance on what agents trying to affirmatively further fair housing can do when speaking about race. The only guidance seems to be, “just don’t talk about it at all,” which generally means opportunities like this to help disrupt the cycle of segregation are missed.
Is anyone allowed to talk about the integration mandate of the Fair Housing ct during a home search? HUD-approved housing counselors can advise home seekers on housing opportunities in ways that expand opportunities and choices and affirmatively further fair housing. While counselors do not focus on race, they are authorized to discuss fair housing, housing selection, and mobility – all factors that contribute to neighborhood diversity. The courts and HUD have determined this is not steering because it encourages home seekers to consider areas they might have otherwise excluded.
We think it is time to consider how real estate professionals might participate in housing counseling that promotes integration and respond meaningfully to clients seeking housing in diverse neighborhoods. The only cases involving conduct by real estate agents, sadly, deal with actions contrary to fair housing.
But several cases have explicitly approved race-based affirmative marketing and promotion of integration by HUD-approved nonprofit housing centers. See, e.g., Steptoe v. Beverly Area Planning Association, 674 F. Supp. 1313 (N.D.ILL. 1987); and South Suburban Housing Center v. Board of Realtors, 713 F. Supp 1068 (N.D.ILL 1989); 24 CFR 5.100. While there may be different views on whether or how far real estate agents can go in counseling or to otherwise promote fair housing under existing law, there is clearly room for the industry to do more. The NAR statement is a nice first step, but we challenge the industry to develop standards of practice that are as aggressive in making pro-fair housing law as it has been in making anti-discrimination law.
Perhaps HUD and industry officials can collaborate on a counseling model and other affirmative actions that industry professionals can take to promote integration. While there is certainly reason to be wary of real estate agents doing the right thing when it comes to race, we believe there are many who are seeking ways to support fair housing, and they could be trained and trusted to comply with the law.
Given the role real estate agents play in giving advice and navigating the market for their clients, they are in a unique position to do this—with the appropriate safeguards to protect against discrimination and undue influence. It must be done so that more, not fewer, housing options are provided. And so that it does not affect their client’s ability to select a prior option. And, of course, clients can always decline the additional information. Even if the home seeker ultimately makes a traditional (non-affirmative) move, their awareness has been expanded, and they may share the information with their networks.
Ultimately, the idea is that agents should be trained to help clients challenge the assumptions and biased information they bring with them about neighborhoods. Such information is provided by the real estate industry not to steer them—which ultimately is about limiting their choices—but to expand their options and choices.
Expand the Points of Contact for AFFH
This idea that clients—like the agents who serve them—are subject to social factors that influence awareness of, and perceptions about, different neighborhoods and communities, suggests that efforts to gain knowledge, experiences, and networks that expand that knowledge would be useful more generally. And this kind of information sharing and/or counseling should and could be provided to people before the home search even begins, through town halls, community forums, and the like. Since most steering cases deal with activity at the point of sale, having conversations in advance would arguably not violate the law and could lead home seekers to begin searches with less bias.
Real estate agencies should affirmatively create advertisements, materials, and events that promote neighborhoods throughout their community and are specifically designed to positively highlight diverse communities and counter-act stereotypes (like local versions of ad campaigns developed by the National Fair Housing Alliance in the early 2000s).
A further effort could focus on ways to extend the AFFH mandate to the private market. Although an amendment to the law might be difficult and time-consuming, rulemaking, licensing requirements, voluntary agreements, or MOUs with HUD might be more viable alternatives. Also, since the AFFH mandate extends to all state activities relating to housing and urban development, if state real estate licensing boards are authorized/overseen under state law, states might be obligated to provide enhancements in training and other initiatives to ensure that real estate professionals affirmatively further fair housing. Whatever the method, the concept should be explored because history has shown that the public and private sectors must both be obligated to enforce fair housing, or it fails.
Revisit Targeted Advertising Regulations
HUD has specifically approved targeted advertising of housing units to promote integration, but the regulations are dated and limited. For example, they do not include internet advertising which, as shown by the Redfin case mentioned here, the Facebook case (see Part 1 of this article), and others, is already being used to thwart integration efforts and perpetuate existing patterns of segregation. It is past time to thoughtfully reimagine and rethink approaches to targeted advertising. Strategic messaging helped change perspectives on same-sex marriage and may do the same for housing discrimination. While it presents its own set of civil rights issues, its potential for combating conscious and unconscious bias and facilitating lasting change is significant.
Incentivize Real Estate Agents to Implement and Practice Pro-Integration Strategies
Finally, providing incentives for real estate agents to implement and practice pro-integration strategies bears examination. Incentives for inclusive zoning, affordable housing, and other measures to expand housing choice have been used to affirmatively further fair housing. A detailed discussion is beyond the scope of this piece, but it is noted that the concept could be explored as it relates to real estate agents and might include such things as incentives for participating in training, advertising, and collaborations with other industries and institutions.
Much of the emphasis behind our recommendations for industry action centers around the central premise that for too long fair housing efforts have translated into real estate agents being told to say nothing about race. But if the message is to say nothing, then, as we now know from George Floyd’s murder, saying nothing says something. And the message is not good.
We should be talking about race now more than ever. We need to build awareness about how it has shaped the industry. We need real estate industry professionals who can recognize the structural forces that perpetuate segregation. We need to talk about race so that we can build awareness to confront it in all its subtle—and not-so-subtle—manifestations. Being silent does not help us understand and combat both conscious and unconscious bias.
We believe that an industry poised to reimagine fair housing could ask itself: What would happen if we educated real estate agents about the racial history of the industry, allowed agents to talk about fair housing, and respond meaningfully to home seekers requesting information on housing opportunities, to help them expand their understanding of their choices in the housing market? Perhaps it will start a little of that “good trouble” that John Lewis was talking about.▀
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.
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.
Max Besbris, Upsold: Real Estate Agents, Prices, and Neighborhood Inequality (2020). Chicago: University of Chicago Press.
Ann Choi, Keith Herbert, Olivia Winslow, and Arthur Browne, Long Island Divided (2019). Newsday, November 17, 2019. https://projects.newsday.com/long-island/real-estate-agents-investigation/
Elizabeth Korver Glenn, Race Brokers: Housing Markets and Segregation in 21st Century Urban America (2021). Cambridge: Oxford University Press.
Examples of Efforts by the Real Estate Industry
Dan Reed, “Realtors Reckon with Race,” (Shelterforce, 2021).
Fair Housing Declaration of the National Association of Realtors®, https://www.nar.realtor/fair-housing/fair-housing-program/fair-housing-declaration, accessed 8/28/21.
Realtors Supporting our Schools, the Pasadena Schools Program, is described here: https://pasedfoundation.org/our-work/outreach/realtor-initiative/realtors/ and here: https://www.prrac.org/selling-housing-and-schools/
Quad Cities Realtors’ efforts in the schools are described here: https://realtorparty.realtor/news/quad-div2017-html