Discrimination Against Racial and Ethnic Minorties-Housing

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.