Property managers’ lack of response to applicants of color contributes to housing segregation by race, according to a new study by the National Bureau of Economic Research.

Looks like a Caleb Peterson is more likely to hear back from a prospective landlord than an Isabella Lopez.

That’s according to a new working paper from the National Bureau of Economic Research finding that U.S. landlords nationwide are less likely to respond to tenant applications with black or Latino-sounding names, leading to more housing segregation by race.

The paper, “Racial Discrimination and Housing Outcomes in the United States Rental Market,” details the largest study of its kind in the rental housing market to date, in which researchers examined more than 25,000 interactions with rental property managers across the nation’s 50 largest metro areas and then matched them to the actual outcomes at those properties.

Using a software bot, the researchers sent a three-day sequence of inquiries from fictitious renters to 8,476 property managers starting with a simple default message that included no financial information: “I am interested in this rental and would like to schedule a viewing.”

Researchers targeted listings in the downtown and suburban areas of each market on the day after the property was listed on an online rental housing platform that the researchers did not name but said was “one of the largest” such platforms. According to the paper, the bot sent each property manager one inquiry per day using fictitious identities drawn at random from a set of 18 first/last name pairs that researchers chose based on cognitive associations with one of three racial or ethnic categories: African American, Hispanic/LatinX, and white.

The final set of first-last name pairs the researchers used were: Nia Harris, Jalen Jackson, Ebony James, Lamar Williams, Shanice Thomas, DaQuan Robinson, Isabella Lopez, Jorge Rodriguez, Mariana Morales, Pedro Sanchez, Jimena Ramirez, Luis Torres, Aubrey Murphy, Caleb Peterson, Erica Cox, Charlie Myers, Leslie Wood, and Ronnie Miller.

The study found that inquiries sent from a white renter identity received an average response rate of 60 percent compared to 54.4 percent for an African American renter identity and 57.2 percent for a Hispanic renter identity.

Treating rental applicants differently due to their race violates state and federal fair housing laws as well as ethics policies of real estate trade groups, including the National Association of Realtors’ code of ethics.

“Housing discrimination can have a critical impact on residential location choices and access to opportunity,” the paper said.

“Our results indicate that households of color face higher constraints when searching for rental properties in most U.S. markets.”

Still, the researches noted that the overall response rates mask stark regional differences.

“Inquiries sent from African American identities received response rates that were approximately 12 percent lower (than response rates to comparison white identities) in the Midwest and in the Northeast, 7.9% lower in the West, and 7.6% lower in the South,” the paper said.

“Trials in the Midwest and South indicate a statistically significant difference in the level of discriminatory constraints facing African Americans in the two regions.

“Hispanic/LatinX renters faced stronger constrains in the Northeast (8.1%), followed by the South and Midwest (5.2% and 3.6%) and then the West (2.6%). The findings also indicate that African American renters face stronger constraints than Hispanic/LatinX renters in all regions, though the differences are only statistically significant in the Midwest and West.”

Researchers found that African Americans faced the most discrimination in Chicago, Los Angeles and Louisville, Kentucky, while Hispanics faced the most discrimination in Louisville, Kentucky; Houston, Texas; and Providence, Rhode Island.

“This geographic variation reveals a strong correlation between relative response rates and housing market segregation, illustrating that renters of color face stronger constraints in more segregated cities,” the paper said.

Researchers found that in nearly all markets, African American and white households were more segregated than Hispanic and white households and that African Americans experienced more discrimination than Hispanic households.

“Cities with larger gaps in African American-white income mobility also have higher levels of discriminatory behavior, though the same pattern does not hold for Hispanic/LatinX renters,” the paper said.

“The stark difference between the groups is important, given evidence that the African American-white income gap remains large in many parts of the country while the Hispanic/LatinX-white gap in incomes has fallen dramatically in the past generation.”

Of all of the properties included in the experiment, 12 percent were ultimately rented by African American households, 11 percent by Hispanic households, 71 percent by white households, and 6 percent by households from other groups.

The study’s results reveal that differential treatment for each group predicts differences in rental housing outcomes, according to the paper. Researchers found that non-response to an inquiry from a renter of color lowers the probability that a renter of color will ultimately inhabit a given property by 17.3 percent.

“The present findings reveal a strong relationship between neighborhood segregation and racial discrimination in the rental market,” the paper said. “This relationship disproportionately affects housing access for African American households due to stronger patterns of neighborhood segregation facing the African American community in most U.S. cities.

“This may help explain recent findings showing that residential segregation has contributed to amplifying income inequality, and the importance of city and neighborhood exposure in short, long and intergenerational outcomes. This study reveals evidence of a strong relationship between the income mobility gap and discriminatory constraints facing African American renters.”

Researchers noted several caveats in the paper. They pointed out that NBER working papers are circulated for discussion and comment purposes and have not been peer-reviewed.

They also highlighted some limitations of the study, including that its results are restricted to listings advertised on a single rental housing website and does not account for other channels or properties that may be advertised separately; that the sample of names used was “intended to elicit racialized perceptions” and  is not representative of the total population of renters in the U.S.; and that the results are limited to the first interaction between renters and landlords and therefore don’t capture discrimination in subsequent interactions.

Email Andrea V. Brambila.

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NAR | realtors
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