This article was last updated Feb. 22, 2022.
Real estate agents and brokers hear many of the same questions day after day and transaction after transaction. Just like with many other professions, this leads to a kind of shorthand, where it’s easy to rely on an automatic response or a go-to reply.
As times change, however, and as we become more and more aware of the inequities baked into the real estate process, it’s time to rethink those unconscious, automatic ways of doing business.
In its Peabody-award-winning coverage of housing discrimination, “Long Island Divided,” Newsday used dozens of undercover testers and experts to expose racial profiling, redlining and steering in the New York real estate industry.
Again and again, agents denied equal access to minority house hunters and encouraged white house hunters to choose predominately white neighborhoods — sometimes in coded language, sometimes in chillingly clear derogatory terms.
Although the November 2019 reporting sent shock waves through the industry, it probably shouldn’t have come as much of a surprise. According to data from the 2014 American Community Survey and the New York Department of State, researchers found that common New York state real estate agent practices were responsible for creating the conditions that lead to housing and economic inequality.
Now, as the conversation around racial equality continues to build, real estate agents and brokers, mortgage lenders and other affiliated professionals in markets around the country are having to reckon with decades of practices that effectively promote segregation and discrimination in housing.
In addition, they’re having to create new practices and habits of thought and speech to ensure equal treatment of buyers and sellers moving forward.
The timeline of fair housing law in the US
From the Civil War-era on, federal, state and local governments have attempted to address housing rights for Black Americans, either through implementing policies and laws to promote equal treatment or, in many cases, through facilitating discriminatory practices and enshrining them in law and policy. This push-pull has resulted in a variety of policies that specifically circumvent earlier laws geared toward equal access.
Signed on Jan. 1, 1863, the Emancipation Proclamation is primarily intended to set forth the general principles under which enslaved African Americans would be freed. Within its text, it also includes the following:
“And by virtue of the power, and for the purpose aforesaid, I do order and declare that all persons held as slaves within said designated States, and parts of States, are, and henceforward shall be free; and that the Executive government of the United States, including the military and naval authorities thereof, will recognize and maintain the freedom of said persons.” [Emphasis added].
This last phrase sets up the power of the federal government under the executive branch to create and implement policies and processes to defend and promote the interest of newly freed slaves.
Civil Rights Act of 1866
The first section of the Civil Rights Act of 1866 sets out the equal treatment prescribed for the disposition of real estate for all citizens. The pertinent section is as follows:
“That all persons born in the United States and not subject to any foreign power, excluding Indians not taxed, are hereby declared to be citizens of the United States; and such citizens, of every race and color, without regard to any previous condition of slavery or involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall have the same right, in every State and Territory in the United States, to make and enforce contracts, to sue, be parties, and give evidence, inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of person and property, as is enjoyed by white citizens, and shall be subject to like punishment, pains, and penalties, and to none other, any law, statute, ordinance, regulation, or custom, to the contrary notwithstanding.” [Emphasis added].
Within the text are both the requirement (inherit, purchase, lease, sell, hold, and convey real […] to full and equal benefit) and access to the means to implement these requirements (make and enforce contracts, to sue, be parties, and give evidence).
20th century fair housing laws
In response to Jim Crow laws designed to reinforce segregation in communities throughout the country, the 20th century saw a great deal of well-intentioned policy aimed at creating more access to housing and more access to the homebuying process.
1. Fair Housing Act of 1968
The Fair Housing Act is intended to be a comprehensive law mandating equal treatment in housing matters without regard to “race, color, religion, sex, familial status, or national origin.”
It mandates equal treatment both from sellers of property and from the real estate and financial professionals who facilitate transactions. It was amended in 1988 to include protections for disabled persons as well.
2. Equal Credit Opportunity Act (ECOA)
The Federal Trade Commission (FTC) enforces the tenets of the ECOA, mandating equal treatment for borrowers regardless of “race, color, religion, national origin, sex, marital status, age,” or because an individual receives public assistance.
It sets out a series of acceptable and unacceptable practices, questions and policies in regard to the application, underwriting and approval processes for borrowers.
Recent developments in fair housing
Much of the leadership on fair housing in the past few years has come from municipalities. Just as much of the institutional racism has come from local leadership, many of the new protections and remedies have come at the local level, as well.
Many of these involve protections banning discrimination on the basis of sexual orientation as well as gender identity and expression.
The Color of Law and government-mandated housing segregation
In his book The Color of Law: A Forgotten History of How Our Government Segregated America, Richard Rothstein, a distinguished fellow of the Economic Policy Institute and an emeritus senior fellow of the Thurgood Marshall Institute at the NAACP Legal Defense Fund, lays out an argument for the way in which federal, state and local governments combined to create much of the racial, economic and judicial inequality we see today specifically through housing policy and practices.
Despite the laws and regulations aimed at creating greater equality in the housing market and homebuying process, a variety of policies were put on the books to sow greater division and separate citizens into segregated communities.
In addition, many of these policies sought to take advantage of inexperienced minority homebuyers and homeowners, undermining their purchases through unfavorable lending practices and further exacerbating existing economic inequalities.
Racial zoning as a policy influencing decision-making around lending, building and other aspects of housing has been used in deeds dating from the 19th century to keep racial minorities out of predominately white neighborhoods.
According to Rothstein, property owners and builders used racial restrictions in deeds to create policies that would continue in perpetuity, permanently undermining economic mobility and racial integration of neighborhoods and schools.
Federal Housing Administration (FHA) and Veterans Administration (VA) policies that favored whites-only suburban development contributed to the massive wave of “white flight” that occurred post-World War II.
These patterns of movement drained diverse, working-class neighborhoods of white residents and created segregated communities through FHA-mandated guidelines for lending, insurance and development.
Much of the sub-prime lending crisis behind the 2008 mortgage meltdown involved loans designed for and marketed to minority communities, homebuyers and homeowners.
Many of these loan products carried onerous terms, penalties and teaser rates designed to create the very outcomes that were later bemoaned as the core of the economic collapse. Mortgage lenders like Countrywide helped wipe out decades of economic progress in middle-class Black neighborhoods in just months through these discriminatory practices.
Proactive remedies for housing discrimination
Following Newsday’s exposure of Long Island real estate agents and their violations of fair housing policies, NAR implemented the ACT Initiative, a fair housing action plan designed to facilitate further study and training for real estate agents and brokers.
However, in order to implement real change at the institutional level, where much of the previous abuse has taken place, broader remedies will be needed.
According to Rothstein’s The Color of Law, beginning in 2015, the Obama administration began to pursue a policy designed to “affirmatively further” the purposes of the 1968 Fair Housing Act, in accordance with the requirements of that law.
Subsequently, a variety of public policy analysts and activists have identified remedies that could be implemented to facilitate improvements in the overall landscape of fair housing and access.
1. Economic remedies
Economic remedies may include programs designed to correct the economic imbalances caused by decades of discriminatory policies. These may involve grants or subsidy programs designed to offset the costs of homes in predominately white neighborhoods or tax incentives for developers to offset the effects of gentrification.
These programs would help to correct not only current economic imbalances but also those caused by generations of institutionalized efforts to undermine economic security in Black communities.
2. Zoning remedies
Zoning remedies could include a ban on zoning requirements limiting multifamily housing and minimum requirements for lot size and square footage. In addition, tax incentives could be abrogated for communities that are not taking steps to fulfill their federally mandated requirement to affirmatively further integration.
Two states, New Jersey and Massachusetts, currently have laws on the books designed to combat economic inequalities by encouraging the expansion of housing opportunities to lower- and middle-class residents.
3. Successful innovations
Proposed voucher programs have already helped to increase access to communities that are integrated both racially and economically at the municipal level and are now under consideration at the federal level. Expansion and development of Section 8 vouchers at the state level and Low-Income Housing Tax Credits at the federal level also show promise in using existing infrastructure to implement more effective remedies.
Insights from a Black top producer
When Allen Johnson, CEO and broker at AJ Team of Keller Williams Realty, first graduated from George Mason University and started working at a car dealership, his early success and solid earnings meant that it was time to invest as a first-time homebuyer in the always-hot Northern Virginia real estate market.
“My dad pushed me to buy a house so we went to a couple of open houses,” he said. “No one talked to me. They only talked to my dad. I didn’t look like the prototypical buyer — I was young and had braids — but people just looked through me like I wasn’t there.”
After being stood up by an older Black real estate agent, Johnson almost gave up on the idea of buying a home. One day, however, a Latino real estate agent came in and bought a car. Johnson told him, “I’m going to buy a house, and you’re going to help me.”
Thus began Johnson’s real estate journey — and his commitment to help make real estate ownership achievable for more people in his community.
“I knew that my purpose in real estate was to make sure that people who looked like me — no matter their age, race, or stage in life — were going to have someone on their side to pay attention to them and to see them,” he said. “We’ve gone 18 years in this business making sure that anyone who has the ability and desire to buy a house will have someone to take them seriously. That’s served us well, and we feel like it’s served our community well.”
Johnson believes that unconscious biases play a part in keeping Black buyers and sellers out of the market, based in part on a lack of representation. “How often do you see Black homeowners on HGTV? How often do you see Black agents on these shows? It’s very hard for people to become something that they don’t see.”
“We’ve got to start teaching Black people at a young age about the path to homeownership because if we don’t start teaching them early, they’re not going to have anything to aspire to. Look at the marketing and advertising. It’s evident who they’re trying to market to.”
Johnson sees communication as a key to helping break down barriers for both white and Black agents. “For me and for other agents, it’s just having conversations,” he said. “We get so used to being around people we’re used to being around.”
As a real estate agent and investor, Johnson said that he’s had to be around people he wasn’t used to being around and had to get into spaces where he felt uncomfortable. He sees this type of discomfort as an avenue for growth.
“Can agents get into rooms where they feel uncomfortable?” he said. “Can they mentor kids in schools that are predominantly African American? Can they set up programs where they’re inviting these kids to see a different world or something that they won’t see on a daily basis? It’s the reason that we set up mentoring in Title I schools — because if they can see the possibilities, they can take steps to become what they want to be.”
Johnson acknowledges that as someone who has been successful in white spaces, it’s sometimes “exhausting” to be the sounding board for the anxieties and questions that white friends and colleagues bring to him.
As a real estate agent who has been successful both professionally and financially, Johnson says that he is a “comfortable Black person for a lot of people to be around.”
“But there’s some people about 10 miles away that are living a very different life than I’m living, who you need to be just as comfortable with, who you should be having conversations with,” he said. “You should be looking at their family dynamics. You should be looking at their schools. Those are the places where we can have seismic changes in the way that we’re relating to each other.”
“There’s not one type of Black person. Don’t get yourself siloed into only interacting with people who are just like you. Challenge yourself to see how other Black people are living. It’s the same for me. Am I willing to talk to someone who’s not in the same tax bracket as me? That’s how we can begin to shift the way we’re relating to each other.”
Implementing strategies as an individual agent
Determining how to create more equality in your business begins with an honest self-evaluation of your own attitudes and practices. This is not comfortable work, nor is it work that can be done for you by others. However, change is not possible without honesty and clarity.
In practical terms, here are some things to consider in your marketing, communication, transaction management and operations.
1. Ensure that you are treating every inquiry for listings the same without regard to race, gender or other factors
Minority groups are not monolithic, and they shouldn’t be treated as such. Each homebuyer is an individual looking for the right home for his or her family. Send listings based on the buyer’s wish list, not based on your assessment of what they “need” or “should want” in a neighborhood.
2. Evaluate your marketing, and see if it betrays unconscious bias
Who do you picture as a buyer or seller? Your vision of your potential client should encompass a variety of races, ethnicities and other demographic factors.
If you’re creating direct mail pieces or online marketing campaigns featuring photographs, do those photographs reflect a diverse array of potential clients? Do they welcome everyone, not just people who look like you?
3. Consider whether you are using coded language
Consciously or unconsciously, think about the language you are using and whether it might steer clients toward specific areas or types of homes. This may include discussions about safety, security and school quality when these items are used as a stand-in or shorthand for differentiating between predominately white markets and those with more diversity.
4. If you create prerequisites for showing homes, those should apply to all potential clients
Requiring a pre-qualification or preapproval, a referral from an existing client or colleague, or otherwise restricting the services you will provide to potential buyers means having those same requirements for every potential client.
5. Embrace diversity in various aspects of your life
If you are attending networking events and conferences exclusively with people who look like you and think like you, you’re probably not having the conversations and getting the perspectives that you need to make more honest assessments of your commitment to diversity.
Seek out books, training and opportunities to have the hard conversations that would help you grow in your understanding of the experiences of others and apply them to the way that you do business.
Finally, if you are in charge of planning for an event, consider whether you are only promoting voices of those you know and who look like you. “We’ve sold $65 million in real estate,” Johnson said. “We’re in the top 200 of Keller Williams agents nationally. I’ve been on one panel.”
“We don’t as an industry celebrate everyone equally, and we don’t go out and seek out those who are doing well because we don’t have relationships,” he added.
In light of the current conversation around race, Johnson says that it’s now “popular” for him to be put on panels, “but I’ve been performing at a high level for 18 years. Because we’re not in the rooms and in the conversations with people performing at those higher levels, they don’t always know about us.”
“If as an industry we can start celebrating and empowering successful Black agents and getting them visitability, we’ll start to naturally have some of these inequities become a little more equal.”
Christy Murdock is a Realtor, freelance writer, coach and consultant and the owner of Writing Real Estate. She is also the creator of the online course Crafting the Property Description: The Step-by-Step Formula for Reluctant Real Estate Writers. Follow Writing Real Estate on Twitter, Instagram and YouTube.