In June 2020, Florida homeowners Abena and Alex Horton decided to take advantage of low interest rates due to the pandemic and refinance their mortgage. So their lender sent a professional appraiser to their home in a predominantly white area of Jacksonville.
Homes in the Hortons’ well-to-do neighborhood typically sell for $350,000 to $550,000. They expected theirs to appraise for about $450,000, a comfortable midpoint. But that’s not what happened. And it all came down to race.
Why We Need Fair Housing Laws
In the Hortons’ case, the appraiser pegged the value at just $330,000, well under the going market price for comparable homes nearby.
To its credit, the lender agreed the appraisal was too low and ordered another. It came in at $465,000, in line with the homeowners’ expectations.
The Hortons didn’t undertake any last-minute home improvement projects or even take steps to improve the home’s curb appeal in the interim. They made only one change: removing any evidence that a Black person lived in the house.
Before the appraiser arrived, Abena Horton, who’s Black, took her son shopping. She replaced mantel photos of herself and her son with images of Alex Horton, who’s white, and his white family members. She removed holiday cards from Black families. She even took books by prominent Black authors like Toni Morrison off the shelves.
The ordeal was humiliating but not surprising.
“I [knew] what the issue was,” Abena Horton told The New York Times. “And I knew what we needed to do to fix it, because in the Black community, it’s just common knowledge that you take your pictures down when you’re selling the house. But I didn’t think I had to worry about that with an appraisal.”
The Hortons’ low appraisal was neither a fluke nor the work of a rogue, racist appraiser. The family’s experience plays out in countless households of color across America more than a half-century after the passage of the federal Fair Housing Act.
That law’s goal was to protect minority homeowners from discrimination. It was a vital component of a larger package of legislation — the Civil Rights Act of 1968 — meant to build upon the Civil Rights Act of 1964.
The Fair Housing Act explicitly prohibits certain types of discrimination in the sale and rental of housing and mortgage lending against members of certain protected classes.
Subsequent legislation and court decisions have strengthened and expanded the act in meaningful ways.
Unfortunately, the Hortons’ experience shows that the Fair Housing Act did not usher in a world free from housing discrimination.
Indeed, the National Fair Housing Alliance’s 2019 Fair Housing Trends Report recorded more than 31,000 housing discrimination complaints in 2018, an 8% increase from 2017 and the highest figure since the National Fair Housing Alliance began tracking housing complaints in 1995.
About three-quarters of these complaints were filed with nonprofit housing organizations compared with just under 6% filed with the U.S. Department of Housing and Urban Development (HUD). Many involve more egregious infractions than the Hortons’ lowball appraisal.
Some would-be homeowners or tenants dealt with outright denial of rental housing. Others experienced discriminatory mortgage lending practices that increased foreclosure risk and cost affected borrowers tens or hundreds of thousands of dollars over the life of a loan.
It’s true that not all Americans experience housing discrimination. But all Americans participate in the country’s housing market, even the housing-insecure. And any unequal treatment distorts that market, no matter how localized. That makes discrimination a collective problem, even when it doesn’t directly affect us as individuals.
Key Fair Housing Act Protections for Renters & Buyers
The Fair Housing Act protects most homebuyers, mortgage applicants, and renters from discrimination based membership in a protected class, including race and sex. The act prevents property owners, sellers, selling agents, and housing lenders from taking specific actions defined as discriminatory against members of its protected classes.
Certain identities not explicitly mentioned in the act, notably gender identity and sexual orientation, can be covered by explicit protections of the act, such as sex and disability status (which covers chronic health conditions like AIDS and the virus that causes it). Coverage for these identities is subject to judicial interpretation per the U.S. Supreme Court’s ruling in Bostock v. Clayton County.
Likewise, many states have enacted laws that expand and complement provisions of the federal law. However, the Fair Housing Act does have important exemptions that limit its applicability in certain situations, such as owner-occupied or unmarketed small-scale rental housing.
Protected Classes Defined by the Fair Housing Act
The Fair Housing Act’s protections extend to members of the protected classes or identities outlined in the law. These protections cover both explicit and indirect or implicit discrimination.
Race or Color
This protection applies to official Census-recognized racial categories:
- White American
- Asian American
- Black or African American
- Native American and Alaska Native
- Native Hawaiian and other Pacific Islander
- Hispanic or Latino of any race
- People of two or more races
It also applies to informal racial or ethnic categories and perceived categories, such as assumptions based on a person’s dialect or accent. An offender need not definitively know the race of a buyer or renter to discriminate against them based on it.
The Fair Housing Act requires equal treatment of members of all religious groups, including nonbelievers. For example, in most cases, an apartment community or municipality can’t advertise itself using religious labels like “Christian” or “Jewish.”
The Fair Housing Act prohibits activities that favor or disfavor buyers, renters, or borrowers based on national origin. For example, while it’s not illegal under federal law for property owners and other housing providers to ask applicants for proof of United States citizenship or legal residency, it is unlawful to do so only for certain applicants.
This protection prohibits discrimination based on family organization, marital status, and age in most cases. For example, a property owner who prefers not to rent to college students can’t simply deny housing to all applicants under age 23.
Though the Fair Housing Act does not explicitly protect LGBTQ Americans from discrimination, the familial status class does include same-sex couples.
Any unequal treatment based on sex is prohibited under the Fair Housing Act. That includes restrictive policies enacted in the name of safety, such as refusing to rent first-floor walkout apartments to single women. It also covers any form of sexual harassment or coercion during the rental or sale process.
This protection covers individuals with significant documented disabilities, whether physical or cognitive. That includes those with chronic addiction disorders, such as alcoholism or substance abuse disorder, provided they’re engaged in treatment or recovery programs.
Those engaged in the sale or rental of housing can’t ask about perceived disabilities or deny housing to those with disabilities. That’s true even when the offender’s intentions are pure, such as preemptively asking a person in a wheelchair if they require a first-floor apartment.
Also, in rental housing, disabled tenants must be permitted to make reasonable improvements at their expense, and public areas and entryways must be accessible.
Explicit Prohibitions of the Fair Housing Act
The Fair Housing Act explicitly prohibits dozens of specific actions taken against members of any protected class by property owners, sellers, real estate agents and brokers, mortgage lenders, leasing agents, public officials, civil service, and insurance professionals.
Some of these prohibitions pertain specifically to the sale or rental of housing, while others apply in the narrower mortgage lending context.
Actions Prohibited in the Sale or Rental of Housing
These actions include egregious violations, such as posting a sign restricting applications to a particular race, gender, or sexual orientation. But they also include more subtle offenses, such as steering nonwhite buyers away from predominantly white neighborhoods.
Some actions, such as eviction, may be legal when the intent or result is not discriminatory. For example, if local regulations allow, a property owner is within their rights to evict a tenant who’s seriously behind on rent as long as they treat all such tenants equally regardless of protected status.
Prohibited actions are:
- Outright refusal to rent or sell housing
- Refusing to negotiate the sale or rental of housing
- Refusing to confirm housing is available for sale or rent
- Discouraging the sale or rental of housing
- Segregating housing (for example, grouping tenants of the same ethnic or racial group on a specific floor or building or in a specific neighborhood)
- Extending favorable terms or unique incentives (for instance, charging opposite-sex couples lower rent than same-sex couples)
- Making mention of any prohibited preference (for example, “families preferred”) in housing advertisements
- Using different applications, screening or qualification criteria, or qualification processes (such as running credit checks for nonwhite applicants only)
- Harassing applicants, tenants, or occupants or conditioning approval of a housing application on the applicant’s response to harassment
- Evicting tenants or guests
- Delaying or declining to make necessary repairs or maintenance
- Offering property insurance on unequal terms (for example, asking higher premiums from members of certain protected classes, though underwriters may use indirect methods like credit scoring to account for higher perceived risk from certain occupants)
- Profiting or attempting to profit by persuading homeowners to sell because members of a particular protected class are moving nearby
- Denying real estate agents or brokers access to local agent organizations or multiple listing services
Actions Prohibited in Mortgage Lending
These actions also include a mix of egregious and subtle violations. However, all involve lenders’ or loan servicing companies’ refusal to treat mortgage applicants or borrowers equally based on their identities.
- Refusing to provide information about loan opportunities
- Refusing to originate mortgage loans to otherwise qualified applicants
- Refusing to provide other financial assistance to otherwise qualified applicants
- Offering unequal terms or conditions — such as higher rates, fees, or points — on mortgage loans
- Discriminating during the appraisal process
- A secondary lender or loan servicing company refusing to purchase a home loan
- Conditioning issuance of a loan on the applicant’s response to harassment or coercion
HUD’s fair lending guide details mortgage applicants’ fair housing rights and mortgage lenders’ obligations under the law.
Actions Prohibited in All Housing-Related Contexts
These actions are prohibited in all housing-related contexts:
- Threatening, intimidating, or otherwise interfering with anyone attempting to exercise their rights under the Fair Housing Act or assist others in doing so
- Retaliating against anyone who has filed a fair housing complaint or assisted with a fair housing investigation
State & Federal Housing Protections for LGBTQ Individuals
The Fair Housing Act does not explicitly forbid housing discrimination based on sexual orientation, sexuality, or gender identity. However, HUD requires lenders insured by the Federal Housing Administration (a HUD agency) to observe its Equal Access Rule. That rule prohibits certain acts of lending discrimination based on sexual orientation.
Additionally, the Fair Housing Act effectively forbids discrimination against LGBTQ individuals or families in circumstances covered by other class protections. And many state laws explicitly prohibit housing discrimination against members of the LGBTQ community.
Common Examples of Anti-LQBTQ Housing Discrimination Covered by the Fair Housing Act
The Texas Access to Justice Foundation-funded TexasLawHelp.org highlights common examples of circumstances in which explicit Fair Housing Act protections extend to LGBTQ individuals:
- Sex Discrimination. A rental housing operator asks a transgender woman not to dress in women’s clothing in her building’s common areas; a property manager refuses to rent to a gender-nonconforming applicant.
- Disability Discrimination. A property owner evicts a gay man whose HIV or AIDS status qualifies as a disability under the Fair Housing Act.
- Equal Access Rule. A mortgage lender denies a loan to two same-gender co-applicants presumed to be a couple.
State Laws Protecting LGBTQ Individuals From Housing Discrimination
HUD maintains a list of states with laws prohibiting housing discrimination based on sexual orientation, gender identity or expression, or both. Jurisdictions that forbid housing discrimination on both grounds include:
- New Jersey
- New Mexico
- New York
- Rhode Island
- Washington, D.C.
- Washington state
New Hampshire and Wisconsin prohibit housing discrimination based on sexual orientation but not gender identity or expression.
Noteworthy Fair Housing Act Exemptions
The Fair Housing Act covers most housing types and the vast majority of housing units available for sale or rent in the U.S. However, it does have important exemptions and carve-outs for certain housing types:
- Small-Scale Rental Housing. Owner-occupied rental properties with four or fewer units (such as duplexes and quadplexes) and single-family rental housing that is not marketed or rented with help from a real estate broker. In the latter case, the exemption does not apply when the property’s owner owns more than three qualifying properties.
- Housing Operated by Exempt Organizations. This category includes housing operated by legally recognized religious organizations or private clubs that limit eligibility to their own members.
- Senior Housing. Multifamily communities that meet one of two criteria may legally deny housing to younger applicants: a) every resident is 62 or older or b) at least 80% of occupied units have at least one resident age 55 or older.
Why the Fair Housing Act Matters Today
It’s clear from the massive (and growing) volume of fair housing complaints tabulated by the National Fair Housing Alliance that the Fair Housing Act remains necessary and relevant to modern renters and homebuyers. And many acts of housing discrimination go unreported.
Though egregious examples of overt housing discrimination still occur, modern examples tend to be subtle, even covert. Modern housing discrimination often occurs without victims’ knowledge and sometimes without agency or intent on the perpetrator’s part.
The Hortons’ first appraiser might not have acted on conscious animosity toward people of color or an explicit directive from their employer. They might well have acted on unconscious bias — an internalized, unquestioned notion that Black-owned homes are less desirable than white-owned homes.
Even if you believe you’ve never experienced housing discrimination and aren’t at risk from it in the future, you need to understand what housing discrimination looks like in practice. You also need to know how to recognize the financial, economic, and social consequences it can wreak.
These consequences can and do affect all Americans’ personal finances and overall well-being. The effects can be direct financial issues for victims of discrimination or indirect harm to local economies and a fraying social fabric.
For example, the subprime mortgage crisis of the late 2000s was fueled partly by discriminatory lending practices that resulted in higher default rates by borrowers of color. It resulted in millions of job losses, including those of many Americans who didn’t apply for a mortgage before or during the crisis.
Real-World Examples of Housing Discrimination
Theoretical examples from HUD and nonprofit fair housing organizations like the National Fair Housing Alliance provide a basis for public understanding of the various forms of housing discrimination.
Sadly, these theoretical examples have far too many real-world analogs. Many happened (or continued) during the 2010s. Another was a widespread historic ill that profoundly influenced America’s urban geography.
Disability-Based Discrimination in Dozens of Multifamily Housing Communities
In 2019, the U.S. Department of Justice (DOJ) reached a civil settlement with multistate apartment community operator Miller-Valentine Operations Inc. and Affiliates. According to the DOJ, the company stood accused of violating disability protections enshrined in the Fair Housing Act and the Americans With Disabilities Act.
Under the terms of the settlement, the DOJ required the operator to “take extensive corrective actions” to improve accessibility at more than 80 properties in more than a dozen states and establish a $400,000 fund to compensate disabled individuals affected by its violations.
Illegal Lending in Sacramento & Philadelphia
Banking giant Wells Fargo has been accused of discriminatory lending practices by federal, state, and local authorities since at least the 2000s.
The bank agreed to pay more than $230 million in 2012 to settle a DOJ civil action alleging a “pattern and practice” of lending discrimination against Black and Latino borrowers from 2004 to 2009.
In 2017, the city of Philadelphia sued Wells Fargo over similar claims. The bank settled for $10 million in 2019, according to the Philadelphia Inquirer. A similar lawsuit filed by the city of Sacramento, California, in 2018 (per CNN) remains pending.
Racially Discriminatory Housing Ordinance & Enforcement
In 2019, the DOJ sued the city of Hesperia, California, and the San Bernardino Sheriff’s Department alleging that a city ordinance and its enforcement constituted discrimination against Black and Latino renters, according to U.S. News.
A HUD investigation found that enforcement of the ordinance resulted in more than 140 evictions over alleged criminal conduct in 2016. In some cases, entire families were evicted over allegations leveled at a single tenant or guest.
Enforcement disproportionately targeted minority neighborhoods, with Black tenants four times more likely to face eviction than white tenants.
Refusal to Rent to a Same-Sex Couple
In 2017, a federal court ruled that the denial of rental housing to a same-sex Boulder, Colorado, couple constituted prohibited discrimination under the Fair Housing Act and applicable state law. According to Lambda Legal, the property owner refused to rent to the couple over concerns that doing so would harm her standing in the community.
Racially Restrictive Covenants
Restrictive covenants are clauses in housing deeds that restrict future homeowners’ activities and are not in and of themselves illegal.
However, one particular type of restrictive covenant has long been rendered unenforceable by state and federal law: racially restrictive covenants that forbade homeowners from selling to buyers of certain races or nationalities — often simply anyone who was not white.
Racially restrictive covenants were common in the first half of the 20th century in cities like Minneapolis, Chicago, Seattle, and the Kansas City metropolitan area. Where widespread, they contributed to profound housing segregation. They were often used in conjunction with redlining, a common lending practice that diverted nonwhite borrowers into specific neighborhoods.
These practices helped create majority-minority neighborhoods that subsequently experienced ills including disinvestment, neglect, and civil unrest.
Potential Consequences of Housing Discrimination
Real-world housing discrimination has real-world consequences for homeowners, renters, and their communities.
Some are direct, such as harmful effects on victims’ long-term wealth-building capacity. Others, while indirect, can be more devastating at scale. Generations on, many cities continue to grapple with the far-reaching consequences of early- to mid-20th century redlining and restrictive covenants.
But all are incredibly harmful, both to the individuals who experience them and others.
Greater Exposure to Environmental Health Risks
High-profile calamities like the lead drinking-water crises in Flint, Michigan, and Newark, New Jersey, underscore the disproportionate environmental health risks low-income communities face. These risks are particularly prevalent in low-income communities of color, like Flint and Newark.
That isn’t merely a media narrative. A 2018 Environmental Protection Agency study found that people of color are more likely to live near sources of air pollution and breathe polluted air, often due to historical settlement patterns influenced by redlining and restrictive covenants.
And a 2016 study published in the journal Environment International found that long-term exposure to particulate matter correlates directly with housing segregation. That is, residents of highly segregated areas inhale more particulate matter than those in less segregated areas.
Lead Exposure in Older Housing Stock
Affordable housing tends to be older. Subsidized housing available through programs like the Section 8 voucher scheme does as well.
Unfortunately, many older homes still contain lead paint or water service lines. Lead exposure can cause a host of serious health and developmental problems in both children and adults. (Lead water service lines are typically benign but can cause problems when drinking water is not properly treated, as occurred in Flint).
The market opportunity is greater in moderate- to high-income areas. As such, full-service grocery stores with well-stocked produce sections tend to favor these places over low-income neighborhoods.
The U.S. Department of Agriculture’s food access atlas shows regions that qualify as “food deserts” with limited nutritional resources. These places often occur in low-income urban neighborhoods and small rural towns served primarily by corner stores and dollar stores with little if any fresh produce.
Higher Incidences of Gun Violence & Other Serious Crime
According to a 2019 study published in PLOS Medicine, gun violence incidence closely correlates with higher rates of poverty and income inequality, low rates of social mobility, and low levels of trust in public institutions.
The legacy of residential segregation exacerbates these ills. For example, a 2018 mapping project by The Trace found that two low-income neighborhoods in highly segregated Cincinnati accounted for a disproportionate share of that city’s shootings.
Unequal Access to Quality Schools
NPR reports that a 2016 study by EdBuild found a $23 billion funding gap between predominantly white and predominantly nonwhite school districts. The gap is caused in part by two government-imposed phenomena.
Districts rely heavily on local taxes, which generate more revenue in wealthier, predominantly white districts. Then there’s the principle of “local control,” which limits the equitable distribution of state education funds to poorer districts.
This gap contributes to unequal educational outcomes, reinforcing the very racial wealth disparities responsible for it.
Impact of Discriminatory Lending on the Broader Economy
A 2010 study published in the American Sociological Review cited a “highly racialized process” of “differentially market[ing] risky subprime loans” to borrowers of color as a cause of the late-2000s subprime mortgage crisis that precipitated the Great Recession.
It’s a stark example of the potential for discriminatory lending to impact the broader economy negatively.
On a more granular level, Federal Financial Institutions Examination Council data cited by the Center for American Progress found that home prices in predominantly Black neighborhoods decreased by 6% between 2006 and 2017. During the same period, home prices in majority-white neighborhoods increased by 3%.
This divergence disadvantages all homeowners in affected neighborhoods, not just members of the area’s ethnic or racial minority.
Increasing Racial & Cultural Tension
In a 2019 Pew study conducted before widespread protests over police violence in 2020, 58% of all Americans and 71% of Black Americans said race relations were bad in the U.S.
Meanwhile, 65% of all Americans said it had “become more common for people to express racist or racially insensitive views” since Donald Trump was elected president. And 45% said it had “become more acceptable” to do so.
While it might give comfort to characterize this as an aberration attributable solely to a particular political leader or party, that’s not the entire story. These alarming figures spotlight a fraying of the American social fabric caused in part by decades of residential segregation.
Despite incremental integration since 2000, a Washington Post visualization shows that most Americans continue to live in “majority” neighborhoods where one racial or ethnic group predominates. For example, a 2017 Harvard University study found that roughly 69% of the U.S. population lived in majority-white neighborhoods between 2011 and 2015.
Political Polarization & Increased Mistrust of Institutions
Residential segregation also exacerbates political polarization and public mistrust of institutions.
Writing for Bloomberg CityLab shortly before the 2016 U.S. presidential election, urban studies professor Richard Florida noted that geography was increasingly predictive of political affiliation.
Democratic voters cluster in cities and inner suburbs, while Republican voters favor lower-density geographies. This self-sorting creates bubbles of relative ideological homogeneity. That often manifests in antagonistic relations between local and state leaders, which came to a head during the COVID-19 pandemic in states including Texas and Wisconsin.
It also leads to dysfunction in state and federal governments and coarsening public discourse. A 2016 study by researchers at the University of Mississippi and Stony Brook University, SUNY, found that the percentage of positive political ads declined from 90% during the 1960 U.S. presidential campaign to less than 15% during the 2012 presidential campaign.
Selecting the “best” neighborhood is a fundamental part of finding new housing. Every prospective renter or homebuyer gives some thought to the characteristics of the communities they consider moving to and ranks them based on priorities like access to quality schools, open space, or urban amenities.
Few prospective renters and homebuyers think much about why certain communities have characteristics that make them desirable. They also never wonder why those same communities are often less accessible to those the Fair Housing Act exists to protect, from persons with disabilities to historically marginalized racial and ethnic groups.
That’s understandable. The exercise is a discomfiting one, but it’s also necessary.