Should the BRE investigate agents it suspects are violating Fair Housing laws?

  • Yes! The Bureau should be proactive about enforcement. (77%, 17 Votes)
  • No. The Bureau should only pursue violations which are reported. (23%, 5 Votes)

Total Voters: 22

Racial discrimination still measurably impedes minorities’ home searches and access to housing, according to a Department of Housing and Urban Development (HUD) study of housing markets in 28 metropolitan areas nationwide.

The decennial survey found overt racial discrimination by real estate agents and housing providers has decreased substantially since the survey was first conducted in 1979.

Overt discrimination includes, due to an individual’s race, gender or ethnicity, outright refusals to:

  • show properties; and/or
  • take rental or purchase applications.

Outright racial discrimination may have declined, but African-, Hispanic- and Asian-American renters and buyers continue to suffer from implicit racial discrimination at the hands of real estate brokers and agents. Minority groups are still shown and given information on fewer properties than their equally-qualified white counterparts.

The study measured implicit racial discrimination by comparing the experiences of one white and one minority tester, both with identical socioeconomic profiles, with the same rental or sales listing.

White and minority testers obtained listing information and scheduled viewings in equal measure, demonstrating that blatant racial discrimination has fallen significantly.

However, compared to white buyers and renters responding to the same listings:

  • African-Americans were shown 18% fewer for-sale listings and 4% fewer rental listings;
  • Asian-Americans were shown 19% fewer for-sale and 7% fewer rental listings; and
  • Hispanic-Americans were shown 7% fewer rental listings.

Agents also exposed all minority participants to fewer available units than their white counterparts.

first tuesday insight

Racial housing discrimination is not just morally and ethically reprehensible. It’s also bad business. Implicit racial discrimination hinders sales volume in the real estate market, and to a lesser degree, ties up rental activity.

As an agent, be more concerned about the person inquiring about a listing than your own comfort zone. Permit them to steer you to the property they want to locate, rather than steering them to the property you think they ought to like. Don’t discriminate unwittingly by trying to predict the will of your client.

Not coincidentally, it was real estate agents, not owners, who engaged in the implicit discriminatory practices found by the HUD investigation.

Implicit racial discrimination affects minority renters and buyers by:

  • limiting their access to available housing;
  • making the housing search longer, costlier, and more difficult;
  • hampering economic mobility by limiting a minority buyer’s housing choices in areas with access to better employment and quality schools; and
  • reinforcing the de facto racial segregation that has gripped many American cities in the years since outright segregation was outlawed.

This disparate treatment of users by agents is compounded by the disparate impact of lending practices on buyers. This makes the market unfriendly to minorities seeking financing.

Related articles:

The uneven recovery

The Atlantic Cities, The Enduring False Narratives of Segregation

But the harm of racial, ethnic, and economic segregation reaches far beyond just those who are isolated from the market by these practices. It drags down the larger economy of an entire region – and with it, real estate sales volume – according to research published in the Journal of Urban Studies.

Metropolitan areas with high levels of racial and job skill segregation suffered reduced rates of short- and long-term economic growth between 1980 and 2005, the Urban study found. The future of any community is no less endangered by segregation.

Worse, poverty is very costly to a local economy. Housing discrimination and racial segregation only exacerbate those costs, cutting into the incomes of all people with local vested interests. Thus, the Bureau of Real Estate (BRE) has more than just moral cause to pursue discriminatory agents.

What’s missing? BRE enforcement.

Everyone already knows that discriminatory practices by brokers and agents subject licensees to disciplinary action from the BRE, including license suspension or revocation.

These practices include implicit forms such as:

  • refusing to show users property or provide information whether voluntarily or on request;
  • steering users away from specific properties to properties located elsewhere;
  • reducing the level of services or not responding to an inquiry into a listing; and
  • discriminating in the terms and conditions of a sale, such as charging minority users higher prices.

With the BRE now absorbed into the Department of Consumer Affairs, it now has access to a muscular investigative arm with the power to stringently pursue agents who violate Real Estate Law. [For more on prohibited practices, see Fair Housing Chapter 7 of Agency, Fair Housing, Trust Funds, Ethics, and Risk Management]

BRE Commissioner Wayne Bell has stated the BRE will not pursue ethics violations in the absence of a formal complaint. Thus, it now becomes the duty of brokers and agents on the ground to report, or cause renters and buyers to report, suspected implicit discrimination to the Commissioner.

Re: “Racial and Ethnic Minorities Face More Subtle Housing Discrimination,” from the Department of Housing and Urban Development (HUD) and

Housing discrimination persists in U.S. in more subtle ways HUD report says,” from the Washington Post