How Race Still Matters in Real Estate

September 7, 2018

Racially segregated neighborhoods are still a pernicious reality in the U.S., and the question of whether real estate professionals play a role in perpetuating those divides was explored in a symposium on race and real estate sponsored by the brokerage Redfin on Thursday.

Multi-ethnic group of young adults

© Tara Moore - DigitalVision/Getty Images

Fifty years after the passage of the federal Fair Housing Act, Elizabeth Korver-Glenn, a sociologist at the University of New Mexico who closely followed the practices of 10 real estate agents of different races in Houston for a year, has identified a “new inequality” fueled by agents’ social networks. Korver-Glenn presented her work at the gathering in Seattle for Redfin agents and the public. Her research looked at the “contextual factors that enable white agents to maintain predominantly white networks” and how minority home buyers and sellers face a disparate impact when white agents “deploy their networks in ordinary housing situations.”

In other words, your connections and influence as a real estate professional and community member may potentially benefit some groups of people over others.

Korver-Glenn’s research, titled “Brokering Ties and Inequality: How White Real Estate Agents Recreate Advantage and Exclusion in Urban Housing Markets,” was published in August in the academic journal Social Currents. It also drew upon in-depth interviews with dozens of others involved in Houston real estate transactions, including buyers, sellers, and additional agents. She chronicled 125 encounters with agents—which included, white, black, and Latino practitioners—and their clients.

Common business practices—including the use of pocket listings—tend to negatively affect minority clients because they find themselves excluded from purchasing opportunities and competitive customer service, said Korver-Glenn. While agents of all races are interested in the most lucrative customers, white buyers and sellers are often presumed to be wealthier. And agents deliver to these customers an exclusive network of services: access to listings that haven’t been marketed to the public.

Korver-Glenn chose to study Houston because it is the most ethnically diverse city in the country. The city also lacks zoning laws, which has resulted in an abundant supply of affordable housing. Korver-Glenn initially thought these factors would contribute to lower levels of segregation—but she found that wasn’t the case.

Redfin CEO Glenn Kelman invited Korver-Glenn to present her findings to raise awareness about bias and the ongoing racial divides in the real estate community that are at odds with the tenets of fair housing and to generate discussion about ways to improve housing opportunity access. “No brokerage is perfect,” Kelman said. “We’re all working to get better. Every brokerage is filled with well-meaning people. Still, there are all sorts of ways we fall short of the ideals that got us into this business in the first place, which is to help people get into homes.”

—Wendy Cole, REALTOR® Magazine