In light of current events surrounding racism and being Pride month, we want to discuss the obligations of the real estate businesses in overcoming bias in regards to housing and home-buying. With information from the National Association of Realtors (NAR), we are going to take a look at the history of discrimination and what realtors are doing to work towards overcoming bias in regards to fair housing.
Home Owners Loan Corporation (HOLC) and Redlining
Inequality in housing opportunities existed for a long time before the Great Depression, but redlining is seen as one of the greatest impacts on racial disparity in the United States. After the Great Depression, the New Deal helped people find “relief for unemployment and poverty, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression” frequently referred to as the “3 Rs”. One of the programs under this act was the Home Owners Loan Corporation. On the one hand, it focused on providing low-interest/long-term refinancing to home owners facing foreclosure.
However, this program also created maps of neighborhoods that were defined by “socioeconomic” status in order to influence who would receive assistance or not. Neighborhoods that were defined as “high risk” or “hazardous” were color coded in red, and with the racist attitudes that were pervasive in the HOLC appraisal sheets and maps put the majority of African American neighborhoods in the red zone. This meant that people in these neighborhoods had great difficulty getting any kind of financial support of relief during the end of the Great Depression. The impact of the redlining done under the HOLC program affected the institutionalized racial discrimination and segregation that can still be seen even today.
The Fair Housing Act
Over thirty years after the impact of HOLC’s redlining practices, the Fair Housing Act was enacted to help combat the effects these discriminatory maps. At the time, this act outlawed discrimination in the sale, lease, or rental of housing because of race, color, religion, and national origin, but has been expanded to have other protections. While this act was a step in the right direction towards overcoming racial discrimination in housing, there are still issues that face BIPOC (Black, Indigenous and People of Color) in real estate. “Real Estate Steering” was still a common practice after the passing of the Fair Housing Act that steered prospective home buyers towards or away from certain neighborhoods based on race. U.S. Senator Cory Booker has a compelling story about the racial discrimination his parents faced after the passing of the Fair Housing Act.
While the Fair Housing Act has added many additional protections since its inception, sexual orientation and gender identity are not yet protected under the Fair Housing Act. Twenty two states, including Maine, have stepped up and passed laws prohibiting discrimination based on sexual orientation and gender identity. In addition, the US Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity issued regulations to prohibit LGBT discrimination in federally assisted housing programs in order to keep these the programs open to all eligible people. These laws and regulations move in the direction towards better equality, but there is still work to be done in many states.
Facing these Problems Today
While there is some legal protection in the face of discriminatory bias, there is more work to be done. As individual realtors and businesses, we have an obligation to challenge hidden biases. The National Association of Realtors worked with the Perception Institute to create both a training video “Bias Override: Overcoming Barriers to Fair Housing” as well as an Implicit Bias Test to help identify hidden biases that people may have. Tools like these can help us understand and work towards a better future in real estate.
Continuing to understand the past and understanding its affects on the present are important in challenging the biases that still exist present day. We also want to continue being proactive in being the change that we want to see in the future. Supporting laws and action plans that give legal ramifications for discrimination in real estate helps us create an environment that supports all potential home-owners and renters in the best way possible.
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