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Diverse representation among real estate professionals is coming up short — and it’s a missed opportunity for financial growth.

In a study of more than 1,000 U.S. companies, those companies which prioritized an ethnically and gender diverse workforce outperformed their less diverse counterparts by a staggering 36% in profitability, according to McKinsey.

This paints a stark picture on the lack of gender diversity in the industry, where roughly 36% of commercial real estate professionals are women, and only 9% of C-level positions at CRE firms are held by women. Comparatively, brokers and agents from minority groups include:

  • 85% white individuals, compared to 35% of California’s population;
  • 12% Latino individuals, compared to 39% of California’s population;
  • 8% Black individuals, compared to 5% of California’s population; and
  • 4% Asian American individuals, compared to 15% of California’s population, according to BLS Beta Labs.

By placing greater emphasis on developing a diverse workforce, professionals will better position themselves for success by building a system to support more people in the community.

After all, California’s housing market is not one-size-fits-all — and neither are its prospective tenants and homebuyers. However, despite California’s diverse population, the real estate industry has yet to catch up to the community it provides services for.

Worse, in the absence of diverse representation, too many discriminatory mortgage lending practices have occurred, including redlining and lower property appraisals for homeowners from minority groups.

For example, a Black homeowner experienced this first-hand when they received a property appraisal a whopping $100,000 higher than the previous appraisal after removing family photos depicting the Black family.

When the appearance of race alone causes such a huge disparity for household wealth, it’s a notice to all real estate professionals the system needs repairs.

Benefits of a diverse real estate team

Unhealthy discriminatory practices have created an untrustworthy real estate environment for many communities, exposing implicit bias within the industry.

This implicit discrimination ensures homebuyers and renters of minority groups are:

  • shown fewer properties; and
  • given less information by real estate agents, according to the Urban Institute.

A diverse real estate team brings together a wider range of perspectives and experiences, ones which are better able to understand the cultural differences — and struggles — of the communities which rely upon them for their expertise.

By growing a real estate team to include members which reflect the community served, real estate professionals also gain larger client pools — an important tool for any professional seeking to maintain their income during the housing market recession which began here in California in 2022.

Further, a diverse workforce helps break the cycle of explicit bias practices. For example, a real estate agent or landlord who deliberately refuses to show homes to or accept applications from members of a protected group is guilty of explicit discrimination.

Brokers seeking to diversify their brokerage are best served including an Equal Opportunity Employment (EOE) statement in their employment advertisements. The EOE statement acknowledges the present bias in the employment process while also countering it by promoting a diverse applicant pool.

An example of an EOE is: XYZ Brokerage is and equal opportunity employer. We do not discriminate on the basis of race, color, religion, sex, gender identity, sexual orientation, pregnancy, national origin, age, disability, or genetic information.

By prioritizing inclusivity in their brokerage, brokers will create a thriving company culture — with proven results.

Implicit bias training is now required for all renewing California real estate agents and brokers. firsttuesday’s Implicit Bias and extended Fair Housing courses prepare real estate professionals to identify and counteract elements of systemic racism — conscious and unconscious — in real estate transactions.

Current firsttuesday students may access their required course by logging into their existing accounts. Students who are not yet enrolled may visit the order page. Or give our customer service team a call at 951-781-7300.

Related article:

The new Implicit Bias and expanded Fair Housing course are available for your 2023 California real estate license renewal