The Housing Scene by Lew Sichelman

Addressing the Racial Divide

In an unusual, if not unprecedented, move for a major trade organization, the National Association of Realtors has taken full ownership for any and all discriminatory actions taken over the years by the 1.4 million agents and brokers for which it speaks.

Of course, realty pros aren’t the only ones who have been complicit in directing people of color away from white neighborhoods, pushing them into more expensive financing or denying them access to homeownership altogether. Lenders and appraisers have been part of the problem, too -- and so have some owners, who refuse to sell to African Americans.

But on the day after he was installed as the 2021 president of NAR -- the nation’s largest trade association -- Charlie Oppler apologized on behalf of the business for past policies that contributed to segregation and racial inequality in America.

In 1968, the group opposed passage of the Fair Housing Act. And at one time, it excluded some members of the profession based on both race and sex. The discrimination was all part of what NAR now says was a “systematic policy” of residential racial segregation led by the federal government and supported by the banking system and other segments of the real estate business.

But two recent events, in particular, underscored the need for the association to take the racial inequity bull by the horns. One was a three-year investigation by New York publication Newsday, which found widespread separate and unequal treatment of minorities by nearly 100 Long Island agents. Published in late 2019, the study covered some 5,750 listings and found that Asians were discriminated against 19% of the time; Hispanics, 39% of the time; and African Americans, 49%.

The other occurred in October in Scottsdale, Arizona, where a real estate agent confronted two Black men who were filming in front of his condominium building, telling them that the area was a “no n----- zone.” He was arrested and charged with misdemeanor disorderly conduct, and was subsequently fired by his brokerage.

“What Realtors did was an outrage to our morals and our ideals. It was a betrayal of our commitment to fairness and equality ... We were wrong,” Oppler said during a virtual summit on fair housing in November. “On behalf of our industry, we can say that what Realtors did was shameful, and we are sorry.”

However, the trade group has no issues, at least officially, on members who took part in the disturbance earlier this month in Washington, D.C. At least two real estate professionals have been identified among the throngs who broke into the Capitol, smashing windows and doors and otherwise defiling the place.

One was a Frisco, Texas, broker who took a charter plane to D.C. to participate in the march, but lied to authorities about having gone inside the historic structure. Video showed her inside, and she had bragged on social media (since taken down) about breaking in.

According to a training webinar about recent changes to NAR’s code of ethics, what happened in the nation’s capital was not a violation unless it was directed at a protected class. “Merely being a participant in something that appears likely to involve criminal activity does not” cross the line, said Matt Difanis, chair of NAR’s Professional Standards Committee and a Champaign, Illinois, broker.

On the discrimination issue, meanwhile, Oppler said that his organization intends to “look the problem squarely in the eye” and assume a leadership role in fighting for fair housing going forward. In that regard, it has adopted an initiative it calls ACT: Accountability, Cultural Change and Training.

Among other things, NAR’s Fair Housing Action plan, which was approved a year ago, has created an interactive software program that should help agents identify and confront discriminatory situations.

In another step, NAR has amended its code of ethics to make it a violation to use harassing or hate speech toward any protected class: race, color, religion, sex, handicap, family status, national origin, sexual orientation and gender identity.

But while the simulation program has been received well, the code addition is getting pushback: Some members say it goes too far because it bans such speech anywhere, at any time. That, they say, impinges on their right to free speech.

“I don’t need any bureaucrat monitoring my speech,” a California agent complained on the ActiveRain real estate site.

“This rule applies to what someone does outside of their activities as a Realtor,” said an agent in South Carolina. Others agreed, calling the rule “overreach” and “foolish.”

There were more than a score of comments like these. But Oppler said he hasn’t received “one negative call” on the issue.

“We hold our members to a higher level,” Oppler told me during a telephone press briefing. “Our intent is to stop members from engaging in hate. It’s not positive for our industry.”

Meanwhile, four appraisal organizations have come together to tackle “unconscious” behavior in valuing properties. Unlike NAR, the groups did not admit that their members engaged in discriminatory practices. But “acknowledging that bias exists is but one small step,” Lorrie Beaumont, president of the 5,500-member American Society of Appraisers, said in a statement.

According to a 2018 report published by the American Sociological Association, racial composition is “inextricably linked” to housing appraisals. The study found that in Harris County, Texas, comparable houses in Black and Hispanic neighborhoods were “valued systematically lower” than in white communities.

And last August, according to a New York Times story, a mixed-race Florida couple suspected bias when an appraiser valued their house far less than neighboring properties. After the couple removed family photos and books by Black authors -- personal effects that would indicate a Black person lived there -- a second appraiser said the place was worth more than 40% more.