How realtors broke America

Fair-housing advocate Gene Slater on how brokers co-opted the 1960s language of freedom to entrench segregation and fuel division

Think of the last time you saw homes with a real-estate broker. Did they call you back? Did they follow up? Which neighborhoods did they nudge you toward, or away from? Did they assume, without you saying so, that you’d prefer to be around people who look like you? In the process, did you get your own home appraised? How did the value they arrived at compare with comparable places in your neighborhood?

In his new book going inside the battle for fair housing, Gene Slater argues that real-estate brokers are a principal culprit for the re-segregation and hyper-polarization of America, and that the methods behind what he calls their “conspiring” are poorly understood. In many cases, brokers have “replaced open discrimination with informal racial steering.” White neighborhoods are kept white, and Black neighborhoods kept Black, by seemingly innocuous, hard-to-pin-down behaviors by brokers on the ground — as well as by policies and structures that brokers have fought to enact up high.

In particular, Slater writes, the real-estate broker lobby worked cynically and slickly to co-opt the battle cry of the civil-rights movement, for greater freedom, and turned it into a mantra for white communities wanting to opt out of anti-discrimination law.

I’m glad to publish this essay by Gene below, adapted from his new book, “Freedom to Discriminate: How Realtors Conspired to Segregate Housing and Divide America.”

How real-estate brokers broke America

By Gene Slater

Fair Housing passed Congress in April 1968, days after Martin Luther King was assassinated, as fires smoldered in 100 cities and troops guarded the Capitol. But hopes that it would end segregated neighborhoods have largely been unfulfilled.

The major reason is that the law, its directives, and its enforcement have been weakened for more than half a century by a legacy that is still with us. It is the idea of absolute personal freedom that America’s realtors designed in the 1960s to fight against fair housing.

This idea of freedom of choice without regard to the rights of others was created by the realtors in the 1960s. It was designed to convince voters to permanently authorize residential discrimination in California and proved so effective that, even after the realtors’ successful 1964 ballot proposition was ruled unconstitutional, Ronald Reagan adopted the realtors’ language of freedom. The political shadow of the realtors’ ballot proposition weakened federal fair housing from the start.

More important still, and more lasting, their redefinition of American freedom has been used to limit all governmental efforts to limit discrimination — both fair housing and many others. To understand why residential segregation remains so pervasive half a century later, one needs to look at what has allowed it to continue.

Virtually all studies show that, at each income level, housing segregation of African-Americans remains almost as intense as it was in 1968, when federal fair housing was first enacted. By the late 1990s, almost 90 percent of white suburbanites lived in communities that were overwhelmingly white. Since then, more rather than fewer neighborhoods have become at least 90 percent Black. Such segregation affects African-American families regardless of income. In 2010, African-Americans with incomes above $75,000 lived in neighborhoods that have a higher poverty rate than those of white Americans who earn less than $40,000. Black middle-class households, with incomes in the $55,000–$60,000 range, live in neighborhoods with median incomes similar to those of white households earning $12,000. This shows the continuing power of racial segregation to limit where families can live and raise their children, with lasting and devastating consequences for household wealth, educational and economic opportunities, health, and virtually all aspects of life.

But what drives segregation so many decades after fair housing banned residential discrimination?

Real-estate professionals have to some extent replaced open discrimination with informal racial steering. Brokers face continuing incentives and pressures to discriminate. Many white brokers see themselves as fully complying with fair housing, while showing far fewer homes to Black couples than white, offering less follow-up, showing homes in lower price ranges to families with the same income, and assuming that Black home buyers prefer preponderantly Black neighborhoods. Newsday’s 2019 in-depth investigation of the real estate industry across Long Island demonstrated the extent of broker discrimination fifty years after it was banned. When it comes to appraisals, significant differences have been described in valuations of the same home, depending on the assumed race of the owner.

But underlying forces, set in place by realtors long ago to maintain all-white neighborhoods, are far more powerful than actions of individual brokers and appraisers. Redlining practices of lenders play out in new but often equally devastating ways, including the marketing to minority borrowers of subprime loans that wiped out household savings. Local suburban governments, initially established to ensure segregation, naturally identify the public interest with their individual electorates. They often maintain single-family zoning, developed by realtors in Berkeley in 1916 to support racial exclusion, as a way to limit growth.

Boundaries reinforce themselves over time. As the Federal Reserve Bank has definitively shown from its studies of former redlining maps in every metropolitan area, the blocks on either side of the disinvestment boundaries established during the Depression show far greater differences in property values, homeownership, and housing condition today than when they were drawn.

The impact of past racial practices, in other words, has only increased over time. This compounding effect has been especially true of homeowner equity. A 2019 Duke University study estimated the equity lost by Black homeowners in Chicago alone in the 1950s and 1960s at $3 to $4 billion. The Levittown homes that veterans lined up to buy in 1950 for $7,900 (with no money down and mortgage payments lower than typical rents) — homes African-Americans were kept from buying — were worth fifty times that by the early 2000s. The tenfold disparity in racial household wealth today is rooted in decades when African-Americans were excluded from homeownership and had to pay 20 to 30 percent more for similar housing. This enormous disparity in wealth creates an even greater financial barrier as home prices continue to rise.

Prejudice against African-Americans moving into white neighborhoods, inculcated by the real-estate industry for decades, has dropped only slightly, while millions of incidents of housing discrimination each year go uninvestigated.

But the very power of these forces makes clear the fundamental reason that segregation remains so widespread: strong government action would have been necessary to overcome them. Such action would have been needed under both parts of the fair housing law: prohibiting discrimination and “affirmatively furthering fair housing” by tying federal funding to removal of local barriers to integration.

But strong government action was precisely what the political impact of the realtors’ arguments prevented. Indeed, the passage and existence of fair housing itself in this form provide an ongoing rationale for discrimination. That such a law exists, that government has already taken away the freedom of white Americans, is an argument against liberal government itself. And the fact that segregation continues despite such a law becomes proof for conservatives that discrimination is normal and natural. That some African-Americans remain trapped in some of the worst neighborhoods in the country, neighborhoods that have had little or no reinvestment in generations, becomes evidence that this is all that they want or can afford.

President Nixon in 1970 quashed Open Communities — the first effort to use fair housing to open the suburbs — saying that racial segregation reflected “the free choice of individuals.” President Reagan and William French Smith dramatically weakened fair housing enforcement in the 1980s. In 2015, a group of Republican senators introduced legislation to block the affirmative fair housing mandate because “every community should be free to zone its neighborhoods and compete for new residents according to its distinct values.” Thus, when President Trump in August 2020 announced to “all of the people living their Suburban Lifestyle Dream that you will no longer be bothered,” he was continuing a long series of attacks on fair housing in the name of freedom of choice.

Decade after decade, fair housing has provided a target. It has offered a tangible way to show that, even though the Rev. Dr. Martin Luther’s King Jr.’s speech at the March on Washington is widely honored and a holiday named for him, his idea of American freedom as something shared — that your freedom depends on that of others — has less of a hold on the American system than the idea the realtors created to oppose King. They called this freedom of choice, your absolute right without regard to those of others. Indeed, the Trump administration’s 2020 rule weakening fair housing was officially titled “Preserving Community and Neighborhood Choice.”

Choice has come to mean not a family being able to buy a home, but the opposite: a community’s right to maintain a certain way of life. For realtors, who had first invented single-family zoning to support racial covenants and keep neighborhoods all-white, here was their legacy in a phrase: that freedom of choice meant freedom to zone. For this invocation of freedom to limit others’ choices reflected precisely how the realtors redefined freedom in the 1960s. They used the language of libertarianism, of individual freedom, to insist on, to ennoble, its seeming opposite, community conformity. This idea of freedom has unified the conservative movement ever since.

Although the Trump administration’s particular new regulations have been rescinded by the Biden administration, one thing is certain: attacks on fair housing in the name of American freedom will continue.

Gene Slater is a longtime advocate for fair housing and has advised various government bodies on housing policy. He is the author of the new book “Freedom to Discriminate: How Realtors Conspired to Segregate Housing and Divide America,” from which this essay is adapted. Reprinted with permission from Heyday Books, © 2021 by Gene Slater.

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