Definition
Racial Steering is an unethical and illegal practice in the real estate industry where agents influence the choice of a neighborhood by potential homebuyers based on their race. It often involves guiding minority homebuyers to certain areas and steering white homebuyers away from those same areas or vice versa, contributing to residential segregation and unequal access to housing.
Racial Steering not only violates fair housing laws but also perpetuates systemic inequality by limiting the housing choices and economic opportunities for people of different races. It contradicts the principles set out by the Fair Housing Act of 1968, which aims to eliminate discrimination based on race, color, religion, sex, or national origin in housing-related transactions.
Examples
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Example 1: An African-American family is shown homes only in predominantly African-American neighborhoods by a real estate agent, despite there being suitable homes available in other neighborhoods.
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Example 2: A Latino family is discouraged from considering a predominantly white neighborhood by an agent who suggests that the schools or community may not be a good fit for them.
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Example 3: Conversely, a white family is exclusively shown properties in predominantly white neighborhoods and not presented with options in more racially diverse areas.
Frequently Asked Questions (FAQs)
Q: Is racial steering illegal?
- A: Yes, racial steering is illegal under the Fair Housing Act of 1968. This act prohibits discrimination in any housing-related transactions based on race, color, national origin, religion, sex, familial status, or disability.
Q: How can a potential homebuyer identify if they are being racially steered?
- A: Signs of racial steering can include a real estate agent repeatedly showing homes in neighborhoods not requested by the homebuyer, being told certain neighborhoods may not be “a good fit,” or seeing listings that do not reflect the buyer’s expressed preferences concerning location and other criteria.
Q: What should someone do if they believe they are a victim of racial steering?
- A: If an individual suspects they are a victim of racial steering, they should document their experiences and contact their local fair housing office or the U.S. Department of Housing and Urban Development (HUD) to file a complaint.
Q: Does racial steering affect the value of properties?
- A: Racial steering can contribute to lower property values in certain areas by reinforcing racial segregation and economic disparities. It can create a self-fulfilling cycle where minority-dominated neighborhoods are under-resourced and undervalued.
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Fair Housing Act: A federal law enacted in 1968 to eliminate discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability.
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Blockbusting: A practice where real estate agents exploit racial prejudices to induce property owners to sell hastily and often at a loss by suggesting that people of a different race, ethnicity, or class are moving into the neighborhood.
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Redlining: The discriminatory practice by which banks, insurance companies, and other institutions refuse or limit loans, mortgages, insurance within specific geographic areas, particularly inner-city neighborhoods.
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Residential Segregation: The physical separation of two or more groups into different neighborhoods, shaped by a variety of factors including redlining, blockbusting, and racially restrictive covenants.
Online Resources
References
- U.S. Department of Housing and Urban Development. “Fair Housing Laws and Presidential Executive Orders.” Available at HUD.gov, last accessed March 2023.
- National Fair Housing Alliance. “What is Fair Housing?” Available at nationalfairhousing.org, last accessed March 2023.
Suggested Books for Further Studies
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“The Color of Law: A Forgotten History of How Our Government Segregated America” by Richard Rothstein.
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“American Apartheid: Segregation and the Making of the Underclass” by Douglas S. Massey and Nancy A. Denton.
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“White Identity Politics” by Ashley Jardina.
Real Estate Basics: Racial Steering Fundamentals Quiz
### What is racial steering in real estate?
- [ ] Guiding all clients to upscale neighborhoods regardless of their race.
- [ ] Steering all clients towards rental properties.
- [x] Real estate agents guiding prospective homeowners towards or away from certain neighborhoods based on their race.
- [ ] Showing all available properties to all clients.
> **Explanation:** Racial steering involves real estate agents guiding prospective homeowners towards or away from specific neighborhoods based on their race, which is an illegal and unethical practice.
### Racial steering violates which federal act?
- [ ] The Civil Rights Act of 1964
- [ ] The Homeowner’s Protection Act
- [x] The Fair Housing Act of 1968
- [ ] The Equal Opportunity Act
> **Explanation:** Racial steering violates the Fair Housing Act of 1968, which prohibits discrimination in housing-related transactions based on race, color, national origin, religion, sex, familial status, or disability.
### Is racial steering legal?
- [ ] Yes, under certain conditions.
- [ ] Yes, if the agent believes it is in the client's best interest.
- [x] No, it is illegal.
- [ ] Yes, but only if disclosed to clients.
> **Explanation:** Racial steering is illegal under federal law and contradicts the principles of the Fair Housing Act of 1968.
### What can potential homebuyers do if they suspect racial steering?
- [ ] Accept the agent’s recommendations.
- [x] Document their experiences and file a complaint with HUD.
- [ ] Choose another neighborhood to avoid conflict.
- [ ] Negotiate lower prices in steered neighborhoods.
> **Explanation:** Potential homebuyers who suspect racial steering should document their experiences and file a complaint with the U.S. Department of Housing and Urban Development (HUD) or their local fair housing office.
### Which term is closely related to racial steering?
- [ ] Property Management
- [ ] Urban Sprawl
- [x] Redlining
- [ ] Home Inspection
> **Explanation:** Redlining, like racial steering, is another form of housing discrimination where banks and insurers refuse services based on the demographics of neighborhoods.
### How does racial steering contribute to residential segregation?
- [ ] By encouraging diversity in all neighborhoods.
- [ ] By reducing housing options.
- [x] By confining certain races to specific neighborhoods.
- [ ] By increasing property values uniformly.
> **Explanation:** Racial steering contributes to residential segregation by steering different races into specific neighborhoods, thus perpetuating divided communities.
### Which federal department is involved in addressing complaints of racial steering?
- [ ] Department of Education
- [ ] Department of Labor
- [ ] Department of Justice
- [x] Department of Housing and Urban Development (HUD)
> **Explanation:** The Department of Housing and Urban Development (HUD) addresses complaints of racial steering and other violations of the Fair Housing Act.
### Why is it important for real estate professionals to avoid racial steering?
- [ ] To maintain property values.
- [ ] To comply with zoning laws.
- [x] To uphold ethical standards and abide by federal laws.
- [ ] To increase their commissions.
> **Explanation:** It is important for real estate professionals to avoid racial steering to uphold ethical standards, comply with federal laws, and promote equal housing opportunities for all individuals.
### What historical legal document aimed to eliminate discrimination in housing?
- [ ] The Emancipation Proclamation
- [x] The Fair Housing Act of 1968
- [ ] The Homestead Act
- [ ] The National Housing Act
> **Explanation:** The Fair Housing Act of 1968 aimed to eliminate discrimination in housing, including practices like racial steering.
### How does racial steering affect minority populations?
- [ ] It provides them better housing options.
- [ ] It reduces housing prices for all buyers.
- [x] It limits their choice of neighborhoods and access to resources.
- [ ] It guarantees safer neighborhoods.
> **Explanation:** Racial steering affects minority populations by limiting their choice of neighborhoods, thereby restricting access to resources and perpetuating inequalities.
