Housing Discrimination and Segregation (Mooney, Linda, Knox, David, and Schacht)
Before the 1968 Fair Housing Act and the 1974
Equal Credit Opportunity Act, discrimination against minorities in housing and
mortgage lending was common. Banks and mortgage companies commonly engaged in
"redlining"---the practice of denying mortgage loans in minority
neighborhoods on the premise that the financial risk was too great, and the
ethical standards of the National Association of Real Estate Boards prohibited its
members from introducing minorities into white neighborhoods.
Although housing discrimination is illegal today,
it is not uncommon. To assess discrimination in housing, researchers use a
method called "paired testing." In a paired test, two
individuals---one minority and the other nonminority---are trained to pose as
home seekers, and they interact with real estate agents, landlords, rental
agents, and mortgage seekers to see how they are treated. The testers are
assigned comparable or identical income, assets, and debt as well as comparable
or identical housing preferences, family circumstances, education, and job
characteristics. A paired testing study of housing discrimination in 23
metropolitan areas found that whites in the rental market were more likely to receive
information about available housing units and had more opportunities to inspect
available units that did blacks and Hispanics (Turner et al. 2002). The
incidence of discrimination was greater for Hispanic renters than for black
renters. The same study found that, in the home sales market, white home buyers
were more likely to be able to inspect available homes and to be shown homes in
more predominately non-Hispanic white neighborhoods than were comparable black
and Hispanic buyers. Whites were also more likely to receive information and
assistance with financing.
In a study of housing discrimination in the
Philadelphia area, Massey and Lundy (2001) found that, compared with whites,
African Americans were less likely to have a rental agent return their calls,
less likely to be told that a unit was available, more likely to pay
application fees, and more likely to have credit mentioned as a potential
problem in qualifying for a lease. Sex and class exacerbated these racial
effects. Lower-class blacks experienced less across to rental housing than
middle-class blacks, and black females experienced less access than black
males. Lower-class black females were the most disadvantaged group. The
experienced the lowest probability of contacting and speaking to a rental agent
and, even if they did make contact, they faced the lowest probability of being
told of a housing unit's availability. Lower-class black females also faced the
highest chance of paying an application fee. On average, lower-class black females
were assessed $32 more per application than white middle-class males.
Residential segregation of racial and ethnic
groups also persists. Almost a quarter of all census tracts within the largest
U.S. metropolitan areas are more than 90 percent white and 12 percent are more
than 90 percent minority (Turner & Fortuny 2009).
Sources
Turner, Margery Austin, Stephen L., Ross, George Galster,
and John Yinger. 2002. Discrimination in Metropolitan Housing Markets. Washington,
DC: Urban Institute.
Massey, Douglas S., and Garvey Lundy. 2001. “Use of Black
English and Racial Discrimination in Urban Housing Markets: New Methods and
Findings.” Urban Affairs Review
36(4): 452-469.
Turner, Margery Austin, and Karina Fortuny. 2009 Residential Segregation and Low-Income
Working Families. Washington DC: Urban Institute.