In today’s world, housing is more than just shelter; it is the largest asset that people have and the largest predictor of future success. Many do not make the connection between housing, education, and employment. Housing is the source of wealth, being the determinant of future access to educational and community resources.
Housing discrimination is one of the gravest forms of discrimination, and although segregation is thought of as something of the past, it still is as evident today as it was during the days of
Jim Crow. Housing discrimination can be directed towards various people, depending on but not limited to one’s race, gender, ethnicity, age, sexual orientation, marital statusand can be broken down into four parts: rental discrimination, sales discrimination, lending discrimination and homeowners insurance. Regardless of federal laws such as the Equal Credit Opportunity Act and the Federal Housing Act, housing discrimination remains rampant.
There are different ways in which an individual may or may not be discriminated against both in trying to rent or buy housing. Discrimination can apply to a variety of companies such as banks, insurance companies, and
real estatebrokerages, and individuals such as landlords, loan officers, and real estate agents. Although discrimination goes easily undetected, study after study shows that discrimination is still rampant. In 2002, there were 25, 246 complaints filed reporting some form of housing discrimination. Out of these complaints; 30% were based on race, 27% based on disability; 15% based on familial status (if children were present); and 12% based on ethnicity. These are the statistics are that have been reported, and are considered to merely be a conservative estimate. According to the National Fair Housing Alliance, it is estimated that two million acts of housing discrimination occur annually.It has also been apparent that housing discrimination differs its handling of race and ethnicity. In rental markets, different treatment based on race ( African American) occurred 22% of the time, however different treatment based on ethnicity (Hispanic) occurred 26% of the time. In sales markets different treatment based on race occurred 17% of the time, whereas different treatment depending on race occurred 20% of the time. After rising for over ten years, homeownership for African Americans is declining. In 2004, African American homeownership went from 49.1% to 47.9% in 2006. More startling, however, is that Caucasian homeownership is nearly 28% more than that of African Americans. http://www.nul.org/publications/policyinstitute/factsheet/2007-Fair-Housing-Fact-Sheet.pdf]
In 2000, a report came that had been created in order to calculate the premises of discrimination since changes made to the Equal Credit Opportunity Act and the Federal Housing Act. This study the results were measured collectively in 23
metropolitan areas and using 4,600 paired tests throughout the 1990s. While discrimination has lowered since the implement of the Equal Credit Opportunity Act (ECOA) and Federal Housing Act (FHA), it is still apparent today. This study found that while discrimination is declining for African Americans, it is increasing for Latin Americans. Hispanic renters are more likely to experience difficulties in facing housing discrimination than African Americans. The largest share of this discrimination is seen mostly when an Hispanic or African American are informed that a unit is not for rent when it is shown to their white counterparts.
Those were all examples of housing discrimination. In order to prevent these happenings from occurring, the federal government created laws in order to promote housing equality. Although these laws have been helpful in giving minorities an outlet to file their complaints and work towards combating housing discrimination, home ownership amongst African Americans has been declining in the last two years. Regardless of the marked prevalence of such discrimination, federal support for fair housing has remained essentially level for the last few years.
Equal Credit Opportunity Act
Credit is used by millions to pay for an education, car, housing, or opening a business. In 1974, with the advent of the ECOA there was backlash against lending discrimination. This law ensures that all costumers, regardless of race, color, religion,
national origin, sex, marital status, age receive equal chance to apply for and obtain credit. While this doesn’t mean that all applicants who apply for credit will receive it; variables such as income, debt, and credit historyare all considered for creditworthiness.
Federal Housing Act
In 1968, the U.S. Department of Housing and Urban Development enacted the FHA making it impossible to illegally engage in the following practices based on race, color, national origin, religion, sex, familial status or disabilities. This coverage includes private housing, housing that receives Federal financial assistance and State and
local governmenthousing. This prohibits any discrimination in any aspect of renting or selling a house, financing, advertising, new construction design and zoning practices. In 1998, there were amendments added to further ensure the recognition and enforcement of such unlawful actions. However, even regardless of such changes, discrimination still continues in today’s housing market.
Rental cases have been and continue to be the largest source of fair housing complaints and can be exhibited in various ways. It can range from charging higher deposit fees for applicants with children, denying housing to a handicap person with a service animal in a no-pet residence, or even steering a prospective applicant towards areas in the housing unit that the renter would perceive the costumer to prefer based one their ethnicity, race, color, gender, national origin or disability. Some states and local laws include that it is not allowed for the property owners to discriminate on the basis of sexual orientation, age, and marital status.More blatant forms of such discrimination is falsely denying the availability of some housing units, setting inconsistent policies for different renters (such as paying rent late and subleasing), or even ending the lease for a discriminatory reason. Some discriminatory acts use more subtle forms of discrimination such as using advertising to indicate a preference towards a particular ethnic or racial group.
While sales discrimination is not the most reported form of housing discrimination, it is one of the most damaging forms. Sales discrimination is the refusal to make appointments to inspect housing or being offered very limited service. In a study conducted in twelve metropolitan areas, almost 20% of Latinos and African Americans were refused service or offered very limited service. When housing was shown, 87% of the time they were steered to certain predominant ethnic or economic zones.
Not only is housing discrimination based on just one factor, but it has been found that race, class, and gender all work together on the chances one has in finding a residence. Furthermore, this report concluded that housing discrimination could even markedly occur via telephone
answering machines, demonstrating how technology can impact the chance of unlawful discrimination. In this study, four hundred and seventy four phone calls were made to seventy-nine agents who were advertising open housing units for recent college grads. All of the participants followed a script that matched identical histories, income, and rental requirements. The only difference was that they spoke different English dialects: middle-class English; black accented English, and Black English Vernacular. The people who heard back from the property owners varied drastically. The study found that men who spoke white English were 76% offered to see a place, 63% of those who spoke black accented English were, and 44% of those who spoke Black English Vernacular were. Women were spoke white-middle-class English were 60%, black accented English were 57% and 38% of women who spoke Black English Vernacular were. [ [http://www.fhcsp.com/Publications/June01.pdf June01.PUB ] ]
Another way in which people face discrimination during the housing process is in their ability to obtain mortgage loans. Discrimination does not only impacts an individual’s ability to obtain housing loans but also impacts the likelihood of getting ones with lower
interest rates. This discrimination was investigated through paired testing at the mortgage pre-application stage (conducted by the National Fair Housing Alliance) indicates that differential treatment discrimination occurs at significant levels in at least some cities. Minorities were less likely to receive information about loan products, they received less time and information from loan officers, and they were quoted higher interest rates in most of the cities where tests were conducted. African Americans had the highest denial rate of any group (27.5 percent compared to 12.3 percent for Caucasians). Of those who were able to purchase a home, 55 percent of blacks, 46 percent of Latinos were charged with high costs compared to just 17.2 percent of Caucasians. There are many difficulties in this process because it is questionable whether it is due to poor credit, discrimination, a lack of financial options in their neighborhood, or a lack of knowledge about the financial options that they have. Nonetheless, it is evident that often discrimination is the cause. The Urban Institute, a nonpartisan economic and social policyresearch organization did a study and found that part of the problem with tracking mortgage discrimination is that is starts in the early states of the mortgage lending process that occurs even before the people submit an application and inquire into their loan options. The Urban Institute did a study that had people of different racial and ethnic makeup in a variety of cities. Both whites and minorities told lenders that they had similar credit histories and the same mortgage needs. Regardless of the identical background and needs, it was found that minorities were not only less likely to receive information but also that they had higher interest rates in most of the cities the test was conducted in.
Subprime loans are given by predatory lenders, who do not have the interest of the costumer and often offer them loan products that are not in their long-term interest. Predatory lenders target poor economic and minority neighborhoods where financial knowledge is low to sell subprime loans. Subprime loans play an important role in today’s mortgage lending market, making home ownership possible for many who have poor credit histories or who otherwise fail to qualify for conventional loans. However, these loans often have high inflation rates, often causing the homeowner to go into foreclosure.Also known as reverse lending, these loans are marketed primarily in African-American or minority neighborhoods. Subprime loans are three times as likely in low-income areas than in high-income areas, and are five times as likely in black neighborhoods than in white neighborhoods(http://www.huduser.org/publications/fairhsg/unequal.html). However, it is not necessarily the result of or lack of economic stability. Studies have shown that even in black
upper classneighborhoods a person is one and a half times more likely to have subprime loans than an individual living in low-income white neighborhoods [ [http://www.hud.gov/offices/fheo/lending/subprime.cfm FHEO - Subprime Lending - HUD ] ]
Homeowner's Insurance Discrimination
Homeowner insurance is vital for a homeowner. Because a house is a homeowner’s most vital financial asset, it is imperative that it be protected in case of disaster. Homeowners insurance is also important in the ability to qualify for a mortgage or home equity loan. This becomes impossible for all
minority groups when homeowners insurance is redlined. In over half of U.S. cities, insures provided coverage for 57.6 percent of low-income areas with high minority populations whereas the same insurers covered 75.3 percent of structures in low-income low minority areas.
Part of the continuance of such discrimination is that it often goes without notification. It is estimate by the National Fair Housing that there are at least 3.7 million instance of discrimination annually against African Americans and Latinos alone, but less than one percent of these go unreported or detected
----Because of this information it is evident that
racismand segregation are still evident and in full practice today. Regardless of the fact that today there are many amendments used in order to prevent housing discrimination, minorities are still finding it difficult to obtain a home because of mortgage discrimination. This has been evident in giving minorities higher prices on loan paybacks. Good intentions on the part of housing companies or credit lenders are not enough. Action must be taken to ensure that minorities have the chance to live the American dream and gain wealth through housing.
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