We know that housing discrimination contributes significantly to the racial and ethnic wealth gaps in our country. Demos issued a report in 2016 that documented just how much it would mean if Black and Latino households owned homes at the same rate as white ones: “median Black wealth would grow $32,113 and the wealth gap between Black and white households would shrink 31%. Median Latino wealth would grow $29,213 and the wealth gap with white households would shrink 28%.”
But that’s just the impact of equalizing homeownership rates. Discrimination—such as redlining, which was carried out by our government as well as the private sector—has also cost families huge sums, even if they were able to buy and keep a home. What would happen if the differences between racial groups, in terms of the returns on their homes, were equalized? As per Demos, “median Black wealth would grow $17,113 and the wealth gap between Black and white households would shrink 16%. Median Latino wealth would grow $41,652 and the wealth gap with white households would shrink 41%.”
The value of one’s primary residence is the largest source of wealth for U.S. households—over one-quarter of net worth.
Getting screwed on the purchase of a home means a loss that typically has a decades-long impact on a family, and in many cases is never reversed—although Evanston, Illinois, just became the first municipality to take active steps to do so. Building generational wealth without home ownership has proven to be virtually impossible.
In 2014, Ta-Nehisi Coates brilliantly humanized the theft from Black families in the decades leading up to the Fair Housing Act. Separate from the argument he made on reparations more broadly, Coates brought the receipts on the multiple billions of dollars (at least) stolen from African Americans. Much of the theft was legal, if sickeningly immoral, at the time the reverse Robin Hoods of real estate were doing the actual stealing.
In her new book, former Demos president and author Heather McGhee told the stories of Black families who were illegally discriminated against after 1968, and even after the 1977 Community Reinvestment Act that was supposed to have ended redlining once and for all. She pointed out that this continued discrimination signaled that serious problems existed in the mortgage industry long before the 2008 crash—if white Americans had been paying attention. Additionally, the mortgage industry’s malfeasance is just one of many arenas where racial discrimination didn’t just harm Americans of color; it harmed middle-class and lower-income whites as well, all to the benefit of the economic elite. For a comprehensive history, see Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership by Princeton professor of African American studies Keeanga-Yamahtta Taylor, who discussed her book in a 2019 interview with Vox.
It also hasn’t helped that Donald Trump and HUD Secretary Ben Carson actively sought to reverse whatever progress on residential segregation we had actually achieved. Their efforts were clearly motivated by electoral politics. During the 2020 campaign, The Man Who Lost The Popular Vote (Twice) tried to strike fear into the hearts of “suburban housewives” about an “invasion” of “low-income people” who would be moving into “their neighborhood.”
In July 2020, Trump reversed a rule issued by the Obama-Biden administration, known as Affirmatively Furthering Fair Housing, that aimed to bring about greater residential integration. The twice impeached former president falsely accused Democrats of seeking to “abolish the suburbs” and wanting to force “low-income housing down [suburban residents’] throats.” Not exactly subtle. Trump and Carson even published an op-ed piece in the Wall Street Journal with the headline “We’ll Protect America’s Suburbs.” The unwritten part: “from dark-skinned people.”
Separate from efforts by the government to counteract (or not, in the case of Trump) residential segregation, the discrimination that fed it in the past continues right up to the present. On March 15, the Housing Rights Initiative (HRI), a nonprofit watchdog organization, filed a lawsuit alleging pervasive discrimination in the New York City rental market. The lawsuit specifically addressed potential tenants with Section 8 rent vouchers; under the program, the tenant pays approximately 30% of their gross income each month toward rent, while the federal government pays the rest. In order to qualify, one must have a monthly gross income that is less than 50% of the Area Median Income for the location where the rental apartment is located.
The lawsuit named names that include some pretty big fish: Century 21, Compass, and Corcoran Group. Take a listen to Exhibit A.
In another example, a woman said she was calling on behalf of herself and her boyfriend about an apartment renting for $1,751 a month on Manhattan’s Upper East Side. The real estate broker told her that a visit to the place was the next step, and he’d be thrilled to arrange it. She’d be using a Section 8 voucher, the woman then informed the broker, and asked if the landlord would accept it. “If she accept what? Oh, no, she would not. She just doesn’t. She wants well-qualified people.”
That is against the law. Period.
HRI’s founder and executive director, Aaron Carr, laid the hammer down at a presser when his organization, working with the Legal Aid Society, officially filed the suit: “Our goal here is simple: it is to get real estate companies to abandon their discriminatory housing practices and to follow the damn law. They are the gatekeepers of housing and get to decide where families live, where they work and where children go to school. Housing discrimination goes beyond the walls of housing.” Carr added: “This investigation didn’t target any one real estate company, it targeted an entire real estate sector. Housing discrimination is exacerbating racial and economic segregation.”
As Carr notes, this goes beyond housing. The connection between residential segregation and de facto segregation in many schools is vitally important, and shows another way that injustices in housing have a multi-generational impact.
The HRI investigation documented 88 landlords and real estate agents who basically refused to rent apartments to people who said they had a Section 8 voucher. More than half of HRI’s testers were denied, demonstrating the ubiquity of this injustice. Again, most of those who try to use the vouchers in New York City are Black or Latino, which means that discriminating against those with vouchers has the effect of discriminating against those groups. One New Yorker, Nancy Padilla, shared her personal experience with this discrimination.
Every time a landlord or broker saw my voucher their whole face expression changed. Immediately they turned me away even though I passed the background check and credit check. Being discriminated against over and over and being rejected puts a toll on a person who is trying. I hope this lawsuit can stop anyone else from having to experience what I experienced.
Remember, people with Section 8 vouchers can pay the rent. In fact, the federal government is guaranteeing that, no matter what, a good chunk of the rent will be paid each month. If anything, that makes such tenants a very solid bet, even if their own income isn’t that high. But either way, the kind of discrimination documented in this suit is simply illegal in New York City and New York state. Clearly, existing enforcement mechanisms are doing little to prevent it.
Similarly, the law is failing to prevent massive discrimination in the home-buying market. Newsday carried out an extensive investigation over the course of three years on Long Island, utilizing 25 trained testers who engaged with a total of 93 real estate agents. The results, published in late 2019, provide evidence that America has a long way to go. Nineteen percent of Asian testers, 39% of Latino testers, and a whopping 49% of Black testers received different treatment from the white tester with whom they were paired. Here’s the methodology Newsday used:
The findings are the product of a paired-testing effort comparable on a local scale to once-a-decade testing performed by the federal government in measuring the extent of racial discrimination in housing nationwide.
Regularly endorsed by federal and state courts, paired testing is recognized as the sole viable method for detecting violations of fair housing laws by agents. Two undercover testers – for example, one Black and one white – separately solicit an agent’s assistance in buying houses. They present similar financial profiles and request identical terms for houses in the same areas. The agent’s actions are then reviewed for evidence that the agent provided disparate service.
Different treatment means that, for example, while the white tester was shown housing options in overwhelmingly white neighborhoods, the testers of color were shown options in more diverse ones. In even more egregious cases of different treatment, the agents imposed harsher financial tests on the non-white testers in order to be shown a home. The white tester would be accepted as a customer and the non-white tester—with the same financial situation—would be turned away. The racial discrimination was blatant, obvious, and very common.
George Washington University public policy professor Greg Squires said exactly what I was thinking when reading the investigation’s findings: “This is something that didn’t happen in the deep South. It happened in one of the most educated, most liberal regions of the country. These are significant numbers.”
One agent told a Black tester who asked to see houses, despite not having secured a pre-approved mortgage, “I won’t do it.” To a white tester who also lacked pre-approval, she asked, “When can you start looking at houses?” Discriminatory treatment doesn’t get much more blatant.
A pair of testers, one white and one Black, reached out about housing options in Brentwood. That town’s residents are 79% Black and brown, and at the time the area was going through a spate of murders committed by MS-13—a gang cited repeatedly by Trump and Republicans as a threat caused by supposedly lax immigration policies. The agent in question was happy to show houses in Brentwood to the Black tester: “Every time I get a new listing in Brentwood, or a new client, I get so excited because they’re the nicest people.” The message to the white tester?: “Please kindly do some research on the gang related events in that area for safety.”
If you’ve got the stomach for it, you can read the entire article. What it makes clear is that far too many Long Island real estate agents are actively working to preserve or even worsen racial segregation in housing, and thus are damaging the prospects of their customers of color.
This last incident reflects a practice known as “racial steering,” which refers to agents sending customers to a particular area because of their race or ethnicity, and because of the area’s demographic makeup. The Long Island investigation ended a couple of years ago, but there’s evidence that steering is happening even more often today, thanks in part to COVID-19. The executive director of the National Association of Real Estate Brokers, Antoine M. Thompson, characterized the pandemic as “the perfect storm for people that want to discriminate against folks, whether it’s in renting, or ownership.” He added: “[Steering] limits choice. Someone is choosing for you, as opposed to you choosing for yourself. The other thing is that it fosters a distrust in the real estate industry.”
What can you do if you think you have been steered to or away from particular housing options because of your race or ethnicity (or gender, religion, national origin, ability, or family status)? You can take action and file a complaint. Here’s a list of organizations that can help.
Residential segregation remains a widespread problem in our country, and the continued existence of discrimination in the present is one of the causes. The laws must be changed—there’s no federal law against discriminating on the basis of having a housing voucher, for example—and a greater investment in low-income housing is needed, especially in underserved urban and rural areas. The government also, clearly, has to do a hell of a lot better at enforcing the anti-discrimination laws already on the books—and make sure anyone who even considers discriminating thinks better of it because they fear real consequences.
We who seek justice and equality must challenge the lie that racism is a thing of the past, that we as a society no longer discriminate, and that the lasting effects of historic inequities will simply rectify themselves over time. The fact that a majority of Republicans have their heads in the sand—or, if you prefer, up their asses—on this obvious reality is just one more reason the advancement of justice and equality depends on Democrats gaining enough power to push through these crucially important changes. Our job is to keep up the pressure and make sure they follow through.
Ian Reifowitz is the author of The Tribalization of Politics: How Rush Limbaugh’s Race-Baiting Rhetoric on the Obama Presidency Paved the Way for Trump (Foreword by Markos Moulitsas)