DAVID J. HARRIS
‘Differential treatment’

While many Realtors are well versed in Fair Housing laws, preliminary results of an ongoing study show that black and Latino home-seekers are frequently treated differently than whites when they visit Bay State real estate offices.

The first results of the audit, which is being conducted by the Fair Housing Center of Greater Boston, shows that black and Latino homebuyers are often steered to lower-priced homes and communities and asked for mortgage pre-approval before being allowed to see a for-sale home with a real estate agent.

The testing pairs blacks and Latinos with whites, and the teams visit real estate offices posing as homebuyers. The homebuyers share similar characteristics, except their race is different and the testers of color have more money for a down payment and are seeking to purchase a higher-priced home. So far 17 paired testers, or 34 testers in all, were sent to real estate firms in two North Shore communities that were adjacent to satellite cities, a satellite city, a community in the far South Shore, one community near the South Shore and one near a western suburb of Boston.

The testers visited large franchise and smaller and mid-sized independent real estate firms and were debriefed about their experiences separately. While the non-white testers did not report any “overt hostility” from real estate agents and said that they were treated professionally, in each of the 17 tests, the black and Latino testers were treated differently, according to David J. Harris, executive director of the Fair Housing Center.

“This [audit] is not intended for enforcement at this point. Our goal is not to pursue bad actors. It’s to let the real estate industry and the public at large know what some of the impediments are to people obtaining housing and what are some of the discriminatory practices we see,” said Harris.

“Our goal is to get some sense of the extent and types of differential treatment taking place in the real estate industry,” he said.

Harris discussed the preliminary results at a housing conference organized to discuss a study by The Civil Rights Project of Harvard University. The study showed that Greater Boston communities are segregated partly because of discriminatory practices in the real estate and mortgage industries. The analysis also challenges the assumption that high-cost housing is keeping people of color from moving to some predominantly white communities.

In fact, the study revealed that people of color could afford to live in many more communities than they currently do.

The Fair Housing Center’s audit is a follow-up to two rental audits conducted by the center over the past three years. In those audits, the center found that black renters, families, Section 8 rental subsidy voucher holders and Latinos experienced discrimination in more than half of their attempts to find rental housing.

“It’s really depressing. Basically we have a situation in both markets – both sales and rental – where people of color are being consistently disadvantaged by unfair and illegal practices,” said Harris.

When asked to comment on the audit, two longtime real estate professionals said Realtors get plenty of training on Fair Housing laws and discrimination issues.

“The very first thing you learn when you’re a new Realtor is that Fair Housing is a key issue and that we treat everyone equally. That’s one of the basics that we learn,” said Judy Moore, president of the Massachusetts Association of Realtors.

As part of their pre-licensing coursework, all students who seek real estate licenses are required to take Fair Housing classes, and Fair Housing is included in orientation programs organized by local real estate boards and associations, explained Jody O’Brien, a certified instructor for Carlson GMAC Real Estate in Woburn.

O’Brien, who teaches new and seasoned real estate agents, said Fair Housing courses are also offered to licensed real estate agents for continuing education credits, but are not required. Fair Housing was required as part of agents’ continuing education coursework every two years, until the requirement was eliminated at the beginning of 2001.

Still, O’Brien and Moore maintained that Realtors get a lot of training on how to avoid discriminatory practices. Both Realtors inquired about the testing methodology used by the Fair Housing Center, and O’Brien said that it was difficult to comment on the audit because she hadn’t seen the results and didn’t know specifics about how the testing was conducted.

“I’m not sure it [discrimination] is happening,” said O’Brien. “I think that real estate agents do get a lot of education on it … The Realtor population gets that information and does treat people fairly.”

In addition to the courses that Realtors take, the industry promotes equal treatment of buyers and sellers through the National Association of Realtors’ code of ethics, and the state Realtor association will be offering a diversity course twice this year that raises Realtors’ “awareness and sensitivities” to people of different cultures, said Moore.

Housing discrimination also is a focal point in the coursework for the Graduate Realtors Institute designation, which 600 Bay State Realtors participated in last year, said Moore. “We take Fair Housing seriously, and as an association we put a lot of resolve and energy in promoting equal opportunity,” she said.

Setting Policy

Moore also pointed to a study released by the Massachusetts Commission Against Discrimination last August that she said contradicts the findings of the Fair Housing Center’s audit. The MCAD study, “Towards an Integrated Approach to Fair Housing Enforcement,” looked at residential real estate sales in Eastern Massachusetts and the “No. 1 finding,” according to Moore, was that “discrimination in residential sales does not exist.”

But according to a press release about the MCAD report, the two-year study “identifies potentially discriminatory practices by real estate agents, mortgage lenders and insurance companies.”

“Although there wasn’t direct evidence of discrimination, the research revealed that some lenders, real estate agents and insurance companies used certain practices that subjected homebuyers of color to disadvantageous terms and conditions in their transactions,” the press release noted.

“The results of the study were mixed. On the one hand, there was no evidence of overt discrimination against minorities in the targeted areas of this report. This is an encouraging finding. On the other hand, there are some areas of concern,” stated MCAD Chairwoman Dorca I. Gomez in the press release.

Results from the Fair Housing Center’s ongoing audit so far revealed that the most frequently cited difference in treatment was that black and Latino testers were asked for mortgage pre-approval before Realtors would scheduled an appointment to show them a home, while the white testers weren’t. All the testers were pre-qualified for a mortgage.

The non-white testers were also asked about their occupation and they were steered to less expensive homes and communities, while in some cases the white testers were directed to more expensive homes. The black and Latino homebuyers were also told to visit open houses on their own and then go back to Realtors to say whether they were interested in the home.

“We’re talking about people [the non-white testers] who on their face, had more money to put down, had more money to spend on a house and were better buyers,” said Harris.

Furthermore, in some tests, the minority testers were not given the same type of information as whites, such as Web site addresses and cell phone numbers.

Harris, whose center trains real estate professionals on housing discrimination, said he did not believe the Realtors’ behavior was malevolent or intentional, but nonetheless their behavior resulted in discrimination. “The problem is unknowing,” said Harris.

“We think generally the real estate industry is responsive” when it comes to fighting housing discrimination, said Harris. “The most important thing is that individual Realtors and offices have policies that make sure that everyone is treated the same. That’s the most important thing.”

By discussing the preliminary results, Harris said he hoped that would encourage real estate companies and agents to more closely look at their practices and change any that are discriminatory. The pervasive assumption among policy-makers, journalists, Realtors and others is that people of color can’t afford to buy houses, said Harris.

The audit is expected to be completed in the next several months and will include at least 50 tests, said Harris. The testing will provide some more information on practices in the real estate industry that was not included in the Harvard University study on housing segregation in Greater Boston.

The Harvard study used mortgage and census data to look at communities in which blacks and Latinos were over-represented and under-represented based on what they could afford. Affordability was defined as owning a home of similar value to the homes in a specified community. In the vast majority of municipalities, particularly beyond Boston and its inner and southern suburbs, the actual share of black homeowners is less than half what would be expected based on what they could afford. Meanwhile, Latino homeowners are under-represented in the far southern and western suburbs.

Purchases by minority buyers were concentrated in only three suburban communities – Chelsea, Milton and Randolph. Latinos were over-represented in cities like Lawrence, Chelsea, Lynn, Revere and Everett, while blacks were over-represented in places like Randolph, Brockton, Boston and Milton.