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Helping Brokers Fight Discrimination

November 11, 2020

While there aren’t signs that say “whites only” in brokerage windows, more coded and hidden discrimination persists. It’s a violation of fair housing laws for agents to steer home buyers away from specific communities based on race, and it’s a significant risk for real estate companies. Such behavior mirrors what was uncovered by the Newsday investigation of a dozen real estate companies with the largest market share in Long Island, N.Y., last fall.

After testing 93 agents over the span of three years, Newsday found that 49% of African American buyers, 39% of Hispanic buyers, and 19% of Asian buyers experienced unequal treatment. Bill Dedman, a former investigative journalist for Newsday who worked on the report, “Long Island Divided,” recapped the discoveries during the Idea Exchange Council for Brokers Forum at the virtual 2020 REALTORS® Conference & Expo.

The most common act of discrimination was steering. Newsday would send one white tester and one person of color to meet with the same agent separately. Both testers worked from the same script, with the same requests for home features, price range, and location. However, the Black, Hispanic, and Asian testers were offered vastly different listings in different locations compared with their white counterparts. Some testers also received unequal professional service, more barriers to service, or were even denied service. Agents would also impose more stringent requirements on the people of color, such as insisting on an exclusive contract or needing a preapproval letter before looking at a property. But those same agents would not impose those requirements on the white testers.

“We would be crazy to assume these things are only happening in Long Island or New York,” said Chris Duff, 2020 chair of the Broker Idea Exchange Council. “I think the question we should be asking ourselves is: Why does discrimination still exist? We’re still seeing these same bad acts today in 2020.”

Taking Action

Motivated by the Newsday report, the National Association of REALTORS® has taken bold steps to change the culture of the real estate industry to hold agents more accountable for discrimination and to promote more diverse, inclusive communities, said Bryan Greene, NAR’s director of fair housing policy.

“It starts at the top,” Greene said. “When it comes to discrimination, a company needs to be clear about why it’s unacceptable.”

And NAR wants to give its members the tools to do just that.

In the past year, NAR has launched a plan to address discrimination—the ACT! Initiative—emphasizing accountability, culture change, and training. One of NAR's new offerings under ACT! is a training video called “Bias Override: Overcoming Barriers to Fair Housing,” which aims to help members uncover and address how unconscious stereotypes can affect the real estate transaction. NAR will soon introduce a three-hour classroom course on implicit bias to further reinforce these concepts and tools.

To kick off the REALTORS® Conference & Expo, NAR announced Oct. 28 a new, immersive online simulation training set in a fictional town called Fairhaven, where REALTORS® work to sell homes while confronting bias in the homebuying process in themselves, in clients, and in others. Fairhaven’s web portal, which will be accessible via NRDS login, will go live Nov. 18.

Now, NAR is laying the groundwork for a program that real estate companies can use to do self-testing, Greene said. NAR is devoting significant resources to creating an infrastructure that brokers can use to test whether their agents are providing equal service to all clients. Greene described the program as a "plug and play" resource for brokers: NAR will establish the relationships, structure, and methodology to work with testers.

"It’s a Herculean effort to get this kind of thing off the ground, but that’s exactly what we want to do. This way, you can learn as a company what’s going on and you don’t have to have a newspaper come and expose what you’re doing or a private fair housing group test and sue you. You can actually get ahead of these issues,” Greene said.

Culture Change and Accountability

During the Newsday investigation, two companies showed no instances of discrimination. They were each tested multiple times, with multiple agents tested. “That’s probably not an accident. There’s something happening at those companies—a message they’re sending so that folks don’t get mixed up in this,” Greene said.

Brokers can make the point to their agents that discrimination doesn’t serve their interests or their community’s interests. “Not only does discrimination not pay, but it also doesn’t achieve the outcome you think it does,” Greene said. “When you’re misjudging people, you’re turning away business, and that’s irrational behavior that ultimately has an impact on communities.”

Quality control could help alleviate some inequalities. “Testers weren’t even handed the same information. One would get the brochure and the other would not,” said Dedman. Brokerages should ensure that all clients get the same packet of information. Brokers could also come up with an audit system that checks what listings were presented to a buyer based on the objective criteria—location, price range, and number of bedrooms, for example.

There’s also a presumption that whites want certain school districts that minorities don’t, Greene said. “Agents had a very clear map in their mind that they’d express to their clients, and they often followed the school district lines,” Dedman said. “Boy, did they know where the school lines were, and when you look them up, you see that they very much follow the racial makeup in those areas.”

The agents didn’t have to explicitly mention race to the testers because school districts follow racial lines in the community. “Schools were a mechanism for steering in almost all the cases we saw,” Dedman said. Agents would often give out lists of the “school districts you want, and the school districts you don’t want” during their introductory consultation with the testers, Dedman said. The testers would come back to the Newsday office with different handwritten lists depending on their race.

“This wasn’t some casual slur. It actually seemed to be the service they were selling. It seemed to be what they viewed their function as,” Dedman said. “Why are agents recommending, or filtering, or choosing school districts for customers at all?”

Greene said NAR plans to do a deeper dive into how schools and housing discrimination are entangled, while developing a program over the coming months that provides more accurate information and raises awareness among REALTORS®.