A Matter of Discrimination

by James L. Goldsmith
December 2019

An article that appeared in the New York Times in November cited study results showing housing discrimination by real estate licensees. Investigators posing as white buyers received different treatment than buyers of color and of other minority classifications. Among the allegations was steering. Licensees directed buyers to properties that, in the opinions of the licensees, would be more welcoming of the minority buyers.

What to make of this? I don’t believe it’s a stretch to assume these practices extend beyond the geographical area of the study. That we, as a country, have not made more progress in curbing discrimination is a heavily covered topic, but this study was particularly disturbing because the associations of REALTORS® have expended great resources to eradicate these insidious practices. As far as I am aware, REALTORS® do more to promote fair housing than any other group. Members use the Equal Housing Opportunity logo (outline of a house with an equal sign within) as a badge of honor.

When it comes to steering, I suppose there are some who would defend this behavior by claiming to help their buyers locate a place where they would be happiest. The practice is wrong, however, because it means that the licensee is taking into consideration the race, color, religion, etc. of the buyer and has made a subjective decision about where the buyer would most likely fit. Observing fair housing practices means, however, that no account can be taken of race, color, religion, etc. (“protected classes”) even when the intent is benign. A buyer agent should look at the buyers’ financial means, their preferences and go about locating properties without regard to where the licensee thinks the consumer would be happiest and without regard to race and other protected classes.

Studies like one cited by the Times generally find more insidious practices, as well. Agents chose not bring buyers of color to a particular neighborhood for fear of engendering backlash from the neighbors. Also, agents bow to the discriminatory practices of their sellers in order to keep them happy.

Discriminatory practices are violations of the fair housing amendments to the federal Civil Rights Act, and within Pennsylvania, the Human Relations Act. These laws support private civil actions and governmental prosecution. One who establishes a discriminatory practice in a civil action may be awarded attorneys’ fees in addition to compensatory damages. An award of attorneys’ fees is not the norm in most civil actions and their inclusion in discrimination cases can have devastating consequences. Of course the reason to abide by fair housing laws is not to avoid prosecution, but rather to do the right thing. To do the right thing one must be committed, 100%. If a seller wants you to engage in unlawful discrimination there is one solution. There is no compromise. You cannot participate in a discriminatory practice and if this creates a rift between you and seller, terminate the relationship. Consider too, that standing idle while your client discriminates places you and your license in jeopardy.

Mr. Goldsmith is an attorney with Mette, Evans & Woodside and serves as outside legal counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends Realtors® in disciplinary hearings conducted by the Real Estate Commission. Jim was one of the voices of the PAR Legal Hotline for the first 27 years following its inception in 1992.

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