From my first classes in real estate, back in 2002, I was made aware of our obligation under law as well as under the Realtor Code of Ethics, to avoid even the hint of racial and other discrimination, including “steering” buyers to or from neighborhoods based on race or other criteria.
We continue to be warned about “testers” from the U.S. Department of Housing & Urban Development who pose as buyers to see whether we are in fact engaging in steering or other discriminatory practices.
I am reminded of this topic by an article in the current issue of Realtor Magazine about “The Gentrification Conversation.” You are probably familiar with this term, which refers to the upscaling of traditionally poor and usually minority neighborhoods, resulting in the displacement of minority homeowners and tenants as they are priced out of their long-time neighborhoods.
While we don’t see a lot of gentrification in our suburban counties, it has been and remains an issue in inner cities such as Denver, and I see it a lot in West Denver, between Sheridan Blvd and I-25.
The Realtor Magazine article talked about the large-scale gentrification taking place in Detroit and about the deployment of HUD testers:
“An investigation by Newsday [a Long Island daily newspaper] published in November found disparate treatment and evidence of fair housing violations when undercover testers posing as home buyers visited real estate agents throughout Long Island, N.Y. A total of 93 agents were tested over three years, and the probe found unequal treatment occurred 49% of the time with black testers, 39% with Hispanic testers, and 19% with Asian testers. Unequal treatment included showing minority testers fewer properties, steering testers toward certain neighborhoods, and refusing to serve minority testers who weren’t preapproved for financing but not requiring the same for white testers. Agents also used euphemisms to communicate the racial makeup of an area and imply racial bias.
“[National Association of Realtors] President Vince Malta says he was deeply troubled by Newsday’s findings…. ‘NAR maintains its strong support of fair housing testing to unmask housing discrimination and hold our industry to the highest standard,’ he says.”
It should be noted that race is only one of several “protected classes” under both state and federal laws. The federal Fair Housing Act of 1968 also prohibits discrimination based on sex, color, religion or creed, national origin and disability. Colorado law goes further, prohibiting discrimination based on sexual orientation (including transgender), gender identity, and familial status (single, married, having children under 18, being pregnant, etc.).
Avoiding fair housing violations can be tricky. Did you know that hoarding and peanut allergies are classified as disabilities? Or that age discrimination is not prohibited in Colorado? Or that drug addiction is protected as a disability, but illegal drug activity isn’t? Or that you can’t discriminate based on how a person earns their income? Or that you can be held liable for violating the Fair Housing Act even if you did not intend to discriminate?
The Realtor Magazine article provides guidance on how to avoid committing a fair housing violation. For example, we cannot answer questions about a neighborhood’s demographics, but we can provide a neighborhood report from Realtor Property Resource (RPR) which does provide such information. We cannot characterize a neighborhood’s level of crime, but must refer the buyer to the local police department.
We can avoid “steering” by entering the buyer’s search criteria into the MLS and letting the computer pull all listings matching those search criteria. We can enter geographical criteria such as city or draw an area on a map, as long as we are following the buyer’s request and are not knowingly avoiding one area or another based on discriminatory preferences.
If a buyer asks us to help them identify areas based on discriminatory criteria, we are advised to decline to serve that buyer. Since I have never had a buyer make such a request, I would suspect such a buyer to be a HUD tester.
The trickiest conversation to navigate would be one asking about the trends in a given neighborhood. Is it “going up” or “going down”? All we should do is provide actual statistics about the past few years, just giving the numbers, but no interpretation of them that could include demographic changes.
I can’t recall dealing with a buyer who presented a fair housing challenge, and I make an effort to stay aware of fair housing laws and understand the importance of non-discrimination. However, it can be a challenge keeping up with current housing laws, as suggested by those questions I posed above.