It is no secret that the housing circumstances of whites and minorities differ immensely. Statistically, whites are more likely to own their homes, to occupy better quality homes and apartments, and to inhabit safer, more opportunity-rich neighborhoods. However, a current topic for debate is whether or how much these housing disparities result from current racial and ethnic discrimination in the housing market because whites and minorities are known to differ systematically in employment, income, socioeconomic status, assets, and debts.

In this study conducted by the US Department of Housing and Urban Development, more than 8,000 tests were performed in a nationally representative sample of 28 metropolitan areas. In each test, 2 trained individuals, one of them Caucasian and the other black, Hispanic, or Asian contacted a housing provider to inquire about a randomly chosen housing unit that had been recently advertised. The 2 testers in each pair were matched on gender and age, and both portrayed themselves as equally and unambiguously well-qualified to rent or buy the advertised unit.

The results of this study revealed that minority homeseekers whose ethnicity is more readily identifiable experience more discrimination than those who may be mistaken for whites. Ethnic identifiability was addressed by a team of coders that assessed the race of each tester based on a reading of the tester’s name and a recording of his or her speech- the information available to a real estate agent over the phone. A parallel assessment executed by different members of the coding team was based on name, speech, and a photograph of the tester- information that is made available to an agent during an in-person meeting with a prospective renter or homebuyer. Specifically, black and Asian renters whose race is readily identifiable based on name and speech are significantly more likely to be denied an in-person appointment than minorities that are perceived as white. During an in-person visit, those renters who are identifiably black, Hispanic, or Asian are shown fewer units than minorities who are perceived to be white based on their physical appearance. Similarly, homebuyers who are identifiably black or Asian experience greater discrimination during the in-person appointment than those homebuyers who are perceivably white.

As you analyze the results of this racial and ethnic minority discrimination case study that are shown and explained below, it is imperative for you to be mindful of the fact that these results do not in any way reflect the experience of the average minority homeseeker, because the testers in this study presented themselves as unambiguously well-qualified for the advertised homes and apartments that they inquired about. In reality, as mentioned previously, there is a great disparity in the financial situations and qualifications for renting and homeownership between whites and racial or ethnic minority groups. Evidence from other research indicates that when the often inferior financial backgrounds and socioeconomic statuses of racial and ethnic minorities are accounted for in such discrimination studies by testers that pose as more marginally qualified homeseekers than their white counterparts, more discrimination occurs. Thus, it is important to note that the results of this study most likely understate the total level of discrimination against racial and ethnic minorities that occurs in the rental and sales housing markets.  

                          

 

When well-qualified minority homeseekers contact housing providers to inquire about recently advertised housing units, they are generally just as likely as equally qualified white homeseekers to get an appointment and learn about at least 1 available housing unit in both the rental and sales housing markets. When differences in treatment do occur, white homeseekers are more likely to be favored than minorities. The graphs shown above illustrate that minority homeseekers are told about and shown fewer homes and apartments than whites. With the exception of Hispanic homeseekers, discrimination against racial and ethnic minority homeseekers is significantly greater in the sales housing market than in the rental housing market. Though Hispanic homeseekers do not reportedly experience any discrimination or adverse treatment in the sales housing market according to this study, they do experience more discrimination in the rental housing markets than black and Asian renters. Discrimination in the rental housing market appears to take the form of telling prospective minority renters about fewer available housing units more frequently than it does showing prospective minority renters fewer available units. The opposite, however, is true of the sales housing market, in which discrimination more often takes the form of showing prospective minority homebuyers fewer available houses. It is also interesting to note that while black homebuyers are told about fewer available houses in the sales housing markets than Asian homebuyers, Asian homebuyers are shown fewer available houses than black homebuyers.

Both minority renters and homebuyers are rarely denied appointments with housing providers that their white counterparts are able to make. However, agents frequently tell and show 1 tester more available homes than the other, with whites significantly more likely to be favored than blacks and Asians. Specifically, these pie charts show that blacks are 13 percentage points less likely to learn about more available housing units than whites, and 9 percentage points less likely to be shown more available homes than white homebuyers. Asian homeseekers experience similar discrimination, with Asians 9 percentage points less likely to learn about more available housing units than whites, and 14 percentage points less likely to be shown more available homes than white homebuyers.

This data comparison shows a steady decline in black-white racial segregation over the past 3 decades, although it remains high in many metropolitan areas. The post-1965 major wave of immigration and its persistence into the 21st century is responsible for the influx of millions of foreign immigrants into the United States. Immigration has undoubtedly transformed the country’s population, bringing greater racial and ethnic diversity to both predominantly black and predominantly white neighborhoods. Hispanics and Asians are considerably less segregated from whites than are blacks. Today, most whites live in more diverse neighborhoods than they did 3 decades ago, reflecting the combined effects of immigration, greater minority access to white neighborhoods, and gentrification of some minority neighborhoods (for example, the Lower East Side in New York City).

A Story of the Marginalized, by the Marginalized 

In one rental test, the white tester arrived first and asked to see a two-bedroom apartment. The agent showed him the available two-bedroom unit as well as a one-bedroom apartment and provided application information for both units. The Hispanic tester arrived 2 hours later at the same office, but was told that nothing was available.

 

One agent told a white tester: ‘I’m not prejudiced but I wouldn’t recommend living in South Albuquerque… too many Hispanics. The further south you go the more you run into.’ 

 

Long-Term Changes in Discrimination Trends 

Although the most blatant forms of housing discrimination (refusing to meet with a minority homeseeker or provide information about any available units) have declined since the passage of the 1968 Fair Housing Act and the publication of the 1st national paired-testing study in 1977, the forms of discrimination that persist (providing information about fewer units) raise the costs of housing search for minorities and limit their housing options. In 1977, black renters were frequently denied access to advertised units that were available to equally qualified whites. This kind of “door slamming” discrimination had declined dramatically by 1989 and has continued to decline since. The net measure of discrimination for the number of units shown to black versus white renters actually increased between 1977 and 1989 (probably because blacks were less likely to be denied advertised housing outright) but has declined since. Denial of advertised units to Hispanic renters has also dropped significantly since 1989, and discrimination on the number of units shown has similarly declined between 1989 and 2000.

Like black renters, black homebuyers were frequently denied access to advertised homes in 1977. This form of discrimination had declined dramatically by 1989 and even more by 2000. However, the net measure of discrimination for the number of homes shown does not appear to have changed much over time. In contrast, adverse treatment of Hispanic homebuyers dropped significantly between 1989 and 2000 and remained low through 2012.

The results of this paired-testing study suggest that the blatant discrimination observed in the 1977 paired-testing study (refusal to meet or provide information about ANY available units) is much less frequent today, but that other, more covert forms of discrimination (providing information about fewer units) persist, limiting the information and options offered to minority homeseekers.

The good news is that racial and ethnic prejudice appears to be waning among Americans, a direct result of increased neighborhood integration galvanized by the post-1965 wave of immigration. On a large scale, attitudes toward residential diversity are more open today, especially among the American youth and millennial generations. A declining share of the population expresses prejudice against blacks or distaste for black neighbors. In fact, recent surveys confirmed this by revealing a decline in the share of whites opposed to living in communities where half their neighbors are black.

Do not let this fool you- prejudice has by no means disappeared, and as this HUD study indicates, minorities still face considerable barriers to housing search, even when they are well-qualified as renters or homebuyers. This is especially true in the sales housing market, where discrimination appears higher than in the rental market. Moreover, minorities still suffer from substantial disparities in neighborhood amenities and access to opportunity. Information gaps, stereotypes and fears, local regulatory policies, and disparities in purchasing power all join forces to perpetuate racial segregation.