Racial steering refers to the practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. The term is used in the context of de facto residential segregation in the United States, and is often divided into two broad classes of conduct: Advising customers to purchase homes in particular neighborhoods on the basis of race. Failing, on the basis of race, to show, or to inform buyers of homes that meet their specifications."Racial Steering: The Real Estate Broker and Title VIII" The Yale Law Journal, Vol. 85 No. 6. (1976) 808–825.
Overview
Historically the United States has been defined by racially segregated neighborhoods.Thomas, June Manning "Planning History and the Black Urban Experience: Linkages and Contemporary Implications" Journal of Planning Education and Research Vol. 14 No. 1 (1994) 1 – 11. Urban planning up to the 1960s has been documented as one of the causes of this phenomenon. Urban planners have been seen to have practiced early forms of racial steering. Through the use of the restrictive covenant, and the establishment of zoning laws between World War I and World War II, and the use of urban renewal between the 1940s and 1960s, urban planners have aided in the development of racially segregated neighborhoods. After the 1960s, through in part by the Civil Rights Movement, planning efforts were focused more towards advocacy, and community development, rather than maintaining segregation. Although planning practices did change, the racial make-up of neighborhoods did not.
History
Theoretical explanations
Researchers have attempted to explain the racial segregation seen in neighborhoods throughout the United States. There are three leading theories. The first "asserts that the phenomenon is really self – segregation, the result of the preferences of blacks, as with other ethnics, to live in segregated neighborhoods. The second suggests that poverty, aided by the inertia of history has perpetuated segregation. The third suggests that the decline of blatant discrimination of the past has revealed pervasive institutional racism." John E. Farley, argues that although it is plausible for each of these theories to contribute to the segregation seen, his research lends the most support to the second theory, which bases itself on social class. Farley states that "class largely determines what housing people can afford to rent or buy, and since the gap between whites and African Americans is wide with respect to income (U.S. Census Bureau 2001) and even wider with respect to wealth",Farley, John E. "Race, Not Class: Explaining Racial Housing Segregation in the St. Louis Metropolitan Area" Journal of Sociological Focus (2000) 133–149 there tends to be people with similar incomes and wealth in the same areas. Diana Pearce, another researcher, contributes the segregation seen in neighborhoods throughout the United States to institutional racism. She argues that "in [the] consumers' eyes, real estate agents (compared to bankers or builders, for example) are frequently seen as the most expert in nearly every aspect of decision making involved in buying a house." She continues that "as a group they are not only experts, they also control access to housing areas. They are, or can be, community gatekeepers ... and a crucial aspect of the gatekeeper role is the screening of potential residents."
Federal laws
The United States congress passed a series of Acts aimed at combating segregation. The first such act, The Civil Rights Act of 1866, states in subsections 1981, 1981a, and 1982 that all persons born in the United States are citizens regardless of their race, color, or previous condition and as citizens they could make and enforce contracts, sue and be sued, give evidence in court, and inherit, purchase, lease, sell, hold, and convey real estate and personal property. Although this act was passed, it was never enforced on the local, state or national level.National fair Housing Advocate, http://fairhousing.com/index.cfm?method=page.display&pageid=622, 4 Nov 2007 A second act, The Civil Rights Act of 1964, through Title VI outlawed segregation in public schools and public places. It also made it illegal to have segregation of the races in schools, housing, or hiring. Like the first act, powers given to enforce it were weak in the beginning, but were later supplemented.Title VI of the Civil Rights Act of 1964, , 4 Nov 2007 A third act, the Civil Rights Act of 1968, subsection 3604, expanded on the Civil Rights Act of 1866. It prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, and sex. This section is also referred to as the Fair Housing Act. This act is enforced at the national level by the Office of Fair Housing and Equal Opportunity at the United States Department of Housing and Urban Development.National Fair Housing Advocate Online, 4 Nov 2007
Movement organizations
Throughout the past four decades since the passage of the Civil Rights Act of 1968, many people have come together to movement organizations that fight racial discrimination in the housing market. One such organization is the National Fair Housing Alliance. It credits itself "as being the only national organization that is dedicated solely to ending discrimination in housing".National Fair Housing Alliance, www.nationalfairhousing.org, 1 Nov 2007 In the Greater New York City Metropolitan Area, there are seven local member organizations they are the Fair Housing Council of Central New York, Fair Housing Enforcement Project, Long Island Housing Services, Housing Opportunities Made Equal, Westchester Residential Opportunities, Fair Housing Council of Northern New Jersey, and the Connecticut Fair Housing Center. A second organization is the Fair Housing Law. They are leading a campaign to "increase public awareness of the Fair Housing Act, and its protections".Fair Housing Law, www.fairhousinglaw.org, 1 Nov 2007 A third organization, The National Fair Housing Advocate, aims itself as being "designed to serve both the fair housing community and the general public with timely news and information regarding the issues of housing discrimination".National Fair Housing Advocate, www.fairhousing.com, 1 Nov 2007 Each of these organizations share a common theme, bringing up class action lawsuits against people and/ or companies who fail to rent or sell to others based on their race.
Lawsuits
Since the enacting of federal laws and the emergence of movement organizations, there have been several lawsuits brought up against individuals and companies for racial discrimination. Realty Forum vs. New York State Attorney General (1988): This case involves the New York State Attorney General suing a Yonkers Real – Estate agency, The Realty Forum in 1988 with racial steering. The Attorney General accused the firm of "providing listings of apartments in particular neighborhoods based solely on a client's race or color". The Attorney General began investigating the Realty Forum after receiving complaints from the Westchester Residential Opportunities. The Realty Forum has since been found guilty. ''Corcoran Group vs. New York State Attorney General (2006): This case involves the New York State Attorney General suing a real estate brokerage in Brooklyn Heights, New York City with racial steering. The National Fair Housing Alliance following up on a past report found "literal and blatant sales steering... where the agent applied a new trick – he used a map to tell whites instead where they should 'flee to. The alliance then referred the case to the New York State Attorney General which subsequently placed charges against the group. The case is still pending.Report Alleges Bias by a Real Estate Giant, 2 Nov 2007 Coldwell Banker vs Illinois Attorney General (2006): This case involves a Chicago real estate company being accused of racially steering prospective homebuyers by the Illinois Attorney General. The agency was first investigated by the National Fair Housing Alliance in late 2005. The alliance in their report accused the agency of "blatant discrimination...against African Americans". The alliance continues that white prospective home buyers were shown 36 listings while African Americans who were better qualified were shown only seven. The company denies any wrongdoing and the lawsuit is still pending.Major Realty Firm Accused Of Racial Discrimination, , 2 Nov 2007 Century 21 Town and Country Vs. The Michigan Department of Civil Rights (MDCR) (2006): This case involves the Michigan Department of Civil Rights suing the Century 21 Town and Country of discrimination. The department issued these charges after receiving complaints of illegal steering of white homebuyers to predominantly white neighborhoods and African American homebuyers to predominantly African American neighborhoods. The complaints were initiated by the National Fair Housing Alliance after their investigation which concluded in July 2005. The case is still pending.Formal Charge of Unlawful Discrimination Issued Against Century 21 Town & Country, 2 Nov 2007 United States v. Meta Platforms Inc.'' (2022): On June 21, 2022, the U.S. Justice Department Civil Rights Division filed a lawsuit in the Southern New York U.S. District Court against Meta Platforms alleging that the company's Lookalike audience tool for targeted advertising on Facebook discriminates against users based on their race, color, religion, sex, disability, familial status, and national origin in its distribution of housing advertisements in violation of Title VIII of the Civil Rights Act of 1968. Meta Platforms settled with the Justice Department on the same day the lawsuit was filed.
Although individual firms have been accused of racial steering throughout the United States and found guilty, researchers point out that there have however been no accusations that would affect a significant amount of the United States population. Diana Pearce states that since "the passage of federal legislation and a landmark Supreme Court decision, there has not been one large lawsuit about housing... in contrast [to] school desegregation and employment discrimination, where ... laws and court decisions have had comparatively more impact". She continues that "as long as it is assumed in the general legislation and as long as lawyers and judges assume generally that the problem in housing discrimination is that of a few homeowners (or real estate agents who step out of line), practices ... will continue to perpetuate housing segregation".
Debate
The notion of "a debate over racial steering" does not suggest that racial steering is lawful in the US. Under US civil rights law, racial steering to create or maintain segregation is unlawful and has been the target of civil rights reform since at least the mid-20th century. Racial or ethnic minorities suffer significant disadvantages. The discriminated groups have reacted through social enclave construction, sometimes resulting in protected markets and the creation of social capital, notwithstanding exclusion and discrimination.
Ripple effect in blighted neighborhoods