In many situations, laws regarding property, housing and the process for people moving into and out of a home are left to states, counties and individual cities to determine. However, the federal government regulates housing most notably when it comes to discrimination, and is aimed at protecting groups who would otherwise face higher prices, lower valuations or even outright denial of housing. This protection at the federal level is known as the Fair Housing Act.
[READ: What Is Affordable Housing?]
Despite federal protections against housing discrimination, as well as state and local laws that echo and even elaborate on the federal law, housing discrimination still occurs. Here’s a breakdown of how you’re protected, who enforces federal fair housing laws and how to tell if you may be facing housing discrimination.
— What is the federal Fair Housing Act?
— Who is protected by the federal Fair Housing Act?
— Forms of discrimination that violate the Fair Housing Act.
— Who enforces the federal Fair Housing Act?
— How to avoid being a victim of housing discrimination.
What Is the Federal Fair Housing Act?
Originally enacted in 1968, the Fair Housing Act protects against housing-based discrimination, whether that’s buying or selling a home, getting a mortgage, renting a home or seeking housing assistance. In the years since, the Fair Housing Act has been amended to widen the protections people receive, in particular which qualifications are considered a protected class.
Who Is Protected by the Federal Fair Housing Act?
The federal Fair Housing Act protects against housing discrimination on the basis of:
— National origin.
— Sex, including gender identity or sexual orientation.
— Familial status.
The law protects against discrimination from landlords, real estate companies, real estate agents, cities or other governing bodies, banks or other lending institutions and related businesses, like homeowners insurance companies.
States often have fair housing laws to further enforce such laws at the state level, and in some cases the protections go even further than the federal law. According to the Poverty & Race Research Action Council, 20 states and the District of Columbia have state laws protecting against source-of-income discrimination, which in most cases protect tenants who receive Social Security, housing vouchers or other forms of government income assistance.
Forms of Housing Discrimination That Violate the Fair Housing Act
Housing discrimination can come in many forms, and some are more obvious than others. Setting a higher rent for an individual with a disability, for example, would be a fairly blatant violation of the Fair Housing Act.
However, it’s not always easy to tell if a person’s treatment or the outcome of a deal has motives based on discrimination. Especially in cases when there are multiple people placing an offer on a house, it’s hard to tell if the decision factored in details protected in fair housing laws. Here are a few forms of housing discrimination that occur, and how they may play out:
— Redlining. Redlining is a systemic discriminatory practice that effectively segregates parts of a city or county and undervalues property owned by a targeted group — most often racial or ethnic minorities. The practice of redlining — of which there is historical evidence in the U.S. in lending institutions, government and many other facets of the real estate industry — stunts the growth of generational wealth. While this practice was once rampant as official company policy throughout the industry, it still occurs today. A recent example of modern-day redlining was first published in The New York Times on Aug. 18 when two Johns Hopkins University professors, who are both Black, received an appraisal for their home of $472,000, which was shockingly low compared to what they were expecting. Months after that first appraisal, the couple applied for another refinance loan, removed family photos and had a white male colleague — another Johns Hopkins professor — stand in for them. The second appraiser valued the house at $750,000. The couple is now suing the original appraisal company, the appraiser and the lending institution that hired the appraisal company for racial discrimination.
— Steering. Steering occurs when a person or company tries to influence a buyer, renter or seller’s decision because of their connection to any of the protected classes. For example, if a real estate agent were to only show a Hispanic family houses in a predominantly Hispanic neighborhood despite houses in the family’s budget located in other neighborhoods, and without them having expressed interest in that specific neighborhood, it would be considered steering. The family shopping for a home would be led to believe that neighborhood was the only option for them. More subtle forms of steering may occur when an agent discusses crime in the neighborhood, which can be coded language for racial makeup of the area, regardless of actual crime statistics and whether they would put a resident at risk of becoming victim to a crime.
— Blockbusting. This practice, done by real estate agents and housing developers, is most often race-related. Blockbusting includes encouraging minority families to begin moving into a predominantly white neighborhood, while simultaneously working to scare white residents to move out based on the presence of the new, more diverse neighbors. The intended effect is to lower the value of properties in the neighborhood.
— Different or More Discouraging Application Processes. A landlord, mortgage lender or even title insurance company must have the same application and due diligence process for all applicants. A different process for different applicants, may be linked to discouraging members of a protected class from purchasing a home, or the separate process may make it easier to deny a loan or lease. The Federal Reserve’s Federal Fair Lending Regulations and Statutes compliance handbook lays out the details of this situation, among others, as a practice that is explicitly prohibited by fair housing laws.
Who Enforces the Federal Fair Housing Act?
The U.S. Department of Housing and Urban Development investigates claims of fair housing violations, with information about reporting via phone or online on its website. HUD will investigate the claim and if there is sufficient evidence of a fair housing violation, will try to resolve the issue and may take legal action, if deemed appropriate.
You may also report the claim to your state to investigate as well under state fair housing laws, which may be able to move through the intake and investigation process faster.
To determine if your situation is one worth pursuing in court separate from the government investigation, contact an attorney that specializes in fair housing. “If a person feels that their home appraisal or mortgage application is undervalued, the first course of action may be to gather their comps that support that feeling and contact an attorney in fair housing to review their claim,” wrote Portia M. Wood, a generational wealth planning attorney operating in the District of Columbia, Maryland, Virginia and California, in an email.
You may find that there is enough evidence to file a discrimination case that stands alone, or your attorney may have information about other victims from the same company or individual that could lead to a class action lawsuit.
How to Avoid Being a Victim of Housing Discrimination
Discrimination not only makes it harder to find a home to own or rent, but also makes it more expensive, and can ultimately diminish an individual’s ability to grow wealth over the course of his or her lifetime. Fair housing laws exist because discriminatory practices lead to sweeping and devastating results that last generations, whether that discrimination is unintended, blatant, subtle or even covert.
The best way to fight for truly fair housing opportunities and end discriminatory practices is to both report them when spotted and be armed with the right information to better identify something that could be discrimination, whether that’s shopping around for mortgage programs and interest rates, researching available homes in a variety of neighborhoods or finding comparable home prices before an appraisal.
“We have to know our numbers. It is not putting the responsibility or the onus on the individual alone to solve systemic racism — that is something that can only be done at the system and governmental levels,” Wood says. “However individuals need to arm themselves with as much information about the market as possible, including whatever comparable homes recently sold for and how are those sales compared to their appraisal, so that they are well-versed and able to counter a redline appraisal. Without knowledge you have no power.”
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