Last week I went in to the ‘what’ of the Fair Housing Act. This week let’s delve a bit into the ‘why’ and talk about a few practices from the less than ethical history of real estate that are now illegal: blockbusting, redlining, and steering.
Prior to a 1917 Supreme Court ruling it was legal to forbid persons of color to live in certain areas by zoning them ‘white’ or ‘non-white’. When the ruling deemed this unconstitutional based on the Fourteenth Amendment, municipalities found a loophole to this by creating deed restrictions enforcing such unethical policies siting them as ‘contracts between persons’ and therefore legal. This practice was prevalent until the courts once again stepped in to outlaw them in 1948. This is when ‘blockbusting’ became common practice. Once these laws were overturned, people living in overcrowded neighborhoods caused by segregation started migrating toward less dense areas now available to them. Agents looking to make a profit on the phenomena would go to owners in traditionally white neighborhoods and talk them in to selling at a lower price under the guise the property values would drastically drop when persons of color started moving in. They would then turn around and sell at a higher price to those seeking better housing and subsequently pocket the rewards.
A partner of this practice on the lending and insurance side is called ‘redlining’. When the zoning laws and deed restrictions were in play, these areas were categorized for quality from A to D. Any areas in the C and D categories were deemed high risk based on their demographics and therefore outlined as red zones that should either not qualify for funding or coverage or do so at a far higher rate and premium than zones of ‘lesser risk’ based on more ‘favorable’ demographics. These practices went on for decades and at much personal and economic cost to minorities and any class being vilified at a given time based on political climate.
A third practice, and one more subtle but no less wrong, is called ‘steering’. This is the practice of encouraging someone to live in a specific area, or dissuading them from an area, based on their race, color, religion, national origin, sex, disability, or familial status. The term derives from driving people around to look at their housing possibilities and essentially steering them toward or away from where the agent perceives the customers would be comfortable living.
This is what the Fair Housing Act protects people from. We have come a long way as a country because of these rulings and continue to expand on what values we need to uphold and persons we need to protect. Although I am not proud of some practices in my industry’s history, I am very proud of the advances we’ve brought in the rights of property owners and tenants alike. We have been, and continue to be, at the forefront of political discussions on human rights issues and for that I hold my head high.
Enjoy your week, finish your taxes, and don’t forget to send your suggestions for future columns.