Volume 5 Number 7
July/August 2008

In this Issue
Toward Understanding Homelessness
Homelessness: A National Perspective
Calculating the True Cost of Housing
A Focus on Fair Housing
In the next issue of ResearchWorks

A Focus on Fair Housing


April 2008 marked the 40th anniversary of the passage of the Fair Housing Act — an event commemorated at the White House, on the steps of state capitols, and at city halls across the country. Throughout the month, local events helped increase public awareness of fair housing issues and of the work still needed in order to end housing discrimination. For example, the Vermont Affordable Housing Coalition sponsored brown bag lunches for the public to discuss fair housing laws and best practices with Human Rights Commission staff. The city of Minneapolis, Minnesota held a dialogue and networking session for providers working with seniors and housing. The Fair Housing Council in Portland, Oregon conducted a bus tour and discussion of historic housing discrimination sites in the area. Citizens in Abilene, Texas joined hands to form a ring around City Hall to reaffirm their commitment to equal housing opportunity. Realtors in Pinal County, Arizona were invited to a free seminar on fair housing for which they received three hours of continuing education credits toward relicensing requirements. Vacaville, California sponsored a collage, essay, and poem contest for entries reflecting the theme, "Fair Housing Is Not an Option — It's the Law."

A picture of a poster announcing the 40th anniversary of the Fair Housing Act.The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, national origin, religion, sex, disability, and familial status. Yet housing discrimination studies and complaints indicate that the problem persists. In studies commissioned by HUD and conducted between 2000 and 2003, disabled people experienced unfair treatment from rental agents in 33 to 50 percent of their inquiries about advertised units. In paired testing conducted to compare the treatment of similarly qualified applicants of different racial and ethnic backgrounds, members of racial and ethnic minority groups encountered adverse treatment from rental or sales agents in 20 to 25 percent of their inquiries.

The nature and number of housing discrimination complaints filed with HUD, or with Fair Housing Assistance Program agencies that monitor compliance with fair housing law, also confirm the persistence of unfair practices. The number of complaints peaked at more than 10,000 in 1993, dipped to 5,800 in 1997 and 1998, and rose again to more than 10,000 in both 2006 and 2007. Between 2004 and 2007, most of the formal complaints filed (78 percent) involved discrimination based on disability or race. The discriminatory behaviors cited most often in complaints were:

  • Discriminatory terms, conditions, privileges, services, and facilities in the rental or sale of property, as when a landlord attempted to change the terms of a lease after learning that the renter's husband and children were African American, or the case in which a landlord imposed stricter rules on African American tenants than on white tenants;
  • Refusal to rent, as when a property owner refused to rent to an African American man with disabilities; and
  • Failure to make a reasonable accommodation, as when a property owner refused to allow a tenant with a disability to keep a service animal and then refused to renew the lease.

Although lending discrimination prompts a small percentage of complaints, fair lending studies suggest that this issue deserves close attention, especially given the rise in subprime foreclosures in minority neighborhoods. The studies consistently raise concerns about discriminatory lending. For example:

  • A HUD-sponsored investigation found that African American and Hispanic homebuyers in both Los Angeles and Chicago face a significant risk of unequal treatment when they make preapplication inquiries with mainstream mortgage lending institutions (see www.huduser.gov/publications/hsgfin/aotbe.html for more information).
  • Studies in Boston communities found that, among mortgage loan applicants at the same income level, African American and Latino borrowers experienced far higher denial rates than white borrowers.1
  • A Center for Responsible Lending analysis of 2004 Home Mortgage Disclosure Act (HMDA) data, combined with proprietary data, found disparate loan pricing among white, African American, and Latino borrowers.2
  • The National Community Reinvestment Coalition's analysis of 2005 HMDA data concluded that minority borrowers risk receiving high-cost loans that are poorly underwritten and that racial disparities actually increase as income levels increase.3

Because of these unfair lending practices, HUD created a Fair Lending Unit last year to augment its enforcement efforts. The unit expands our capacity to identify and investigate lenders who may be engaged in systemic lending discrimination. The unit reviews HMDA data, housing discrimination complaint data, and reports from fair housing groups, and follows through to determine if mortgage lending policies or practices are discriminatory. The unit will also conduct periodic reviews of Fannie Mae and Freddie Mac for compliance with both the Fair Housing Act and the fair housing provisions of the Federal Housing Enterprises Financial Safety and Soundness Act.

HUD's latest report to Congress, The State of Fair Housing: FY 2007 Annual Report on Fair Housing, can be downloaded for free at www.hud.gov/offices/fheo/library/FairHousing-FY2007AnnualReport.pdf.

1. Jim Campen, Changing Patterns XIV: Mortgage Lending to Traditionally Underserved Borrowers & Neighborhoods in Boston, Greater Boston and Massachusetts, 2006 (February 2008), www.masscommunityandbanking.org/PDFs/CP14-Feb08%20Report.pdf; The Fair Housing Center of Greater Boston, The Gap Persists: A Report on Racial and Ethnic Discrimination in the Greater Boston Home Mortgage Lending Market (May 2006), www.bostonfairhousing.org/GapPersists.pdf

2. Debbie Gruenstein Bocian, Keith S. Ernst, and Wei Li, Unfair Lending: The Effect of Race and Ethnicity on the Price of Subprime Mortgages, Center for Responsible Lending (May 2006), www.responsiblelending.org/pdfs/rr011-Unfair_Lending-0506.pdf.

3. National Community Reinvestment Coalition, Income Is No Shield against Racial Differences: a Comparison of High-Cost Lending in America's Metropolitan Areas (July 2007), http://www.ncrc.org/index.php?option=com_content&task=view&id=231&Itemid=76

Periodicals: