is there housing discrimination?. homeownership rates
TRANSCRIPT
Is There Housing Discrimination?
Homeownership Rates
Household with High Housing Costs Burdens
Housing With Physical Problems
Crowding: Households with more than one person per room
Reported Problems in the Neighborhood, 1993-1995
Average Racial and Ethnic Composition of Metropolitan Neighborhoods, 1990
Whites’ Attitudes Towards Integration
Measuring Housing Segregation
Dissimilarity
Measures the neighborhood as compare to population as a whole
Similar to the Duncan Index Provides an evenness dimension
Exposure
Shows the level by which minorities are either “embedded” or not into the majorities neighborhoods
Concentration
Delta Index places importance to the concentration of the minority
Centralization
Absolute Centralization Index
Clustering
Spatial Proximity Index
Dissimilarity
Dissimilarity
Dissimilarity
Isolation
Isolation
Isolation
Concentration
Concentration
Concentration
Centralization
Centralization
Centralization
Spatial Proximity
Spatial Proximity
Spatial Proximity
Discrimination in Housing
Agent (whether renting or buying)
Lending Process(when buying a home)
Discrimination in Metropolitan Housing Markets:
National Results from Phase I HDS 2000
by
Margery Austin Turner, Stephen L. Ross,
George C. Galster and John Yinger
The Urban Institute. Metropolitan Housing and Communities Policy Center
Prepared for USDHUD
AGENTBackground
Paired testing originated as a tool for fair housing enforcement, detecting and documenting individual instances of discrimination. Since the late 1970s, this methodology has also been used to rigorously measure the prevalence of discrimination across the housing market as a whole. When a large number of consistent and comparable tests are conducted for representative sample of real estate and rental agents, the results control for differences between white and minority homeseekers, and directly measure patterns of adverse treatment based on a homeseeker’s race or ethnicity.
Paired Testing MethodologyIn a paired test, two individuals¯one minority and the other white¯pose as otherwise identical homeseekers, with comparable housing needs and resources. Both testers visit a real estate or rental agent to inquire about the availability of housing, making the same requests and providing the same information about themselves. Each tester systematically records the information and assistance he or she receives from the agent. If the minority and white are treated differently in important ways, a test provides direct and powerful evidence of differences in the treatment minorities and whites experience when they search for housing.
Lending Process
It can occur at the in the pre-loan process
It can occur at the loan stage At the Loan Approval or Disapproval
Stage At the Loan Administration Stage
Advertising
When done on TV or Radio or Newspapers it would appear there is no discrimination– However, stations or association with
certain programs could target certain markets and create discrimination. However that in it self is difficult to prove
– Mailing by Zip Codes
Location
Another subtle mode of discrimination is location of Loan offices– In an important case with the Justice
Department – The Decatur Federal Savings and Loan
Association in the Atlanta area settled a discrimination law suit
The Decatur Federal Savings and Loan Association
FACTS– Between 1927 and 1980 Decatur Federal
Opened 43 offices in Atlanta– It only opened 1 in a predominantly Black
neighborhood– It closed only 2:
• The one in the Black Neighborhood• One in a neighborhood that was become
mostly Black
The Decatur Federal Savings and Loan Association
FACTS– Justice found that different criteria were used to
decide when to close Branches between White and Black neighborhoods
– It excluded census tracks that were located in predominantly Black neighborhoods
– An former Loan Officer testified that she was ordered to reject loans south of IH 20, and area where many of the Black neighborhoods in Atlanta are located
In the Pre-Application and Application Process
Discrimination can occur:– When discussing different alternatives– Who is presented with larger number of
alternatives– The Time spent with the loan officer– Who receives lower interest rates given the
similar economic backgrounds
Discussing Different Alternatives
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90
White OnlyBlack OnlyNo Difference
Who is Provided with More Alternative Loan Packages
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10
20
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70
White OnlyBlack OnlyNo Difference
Who Spend More Time with Loan Officer
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10
20
30
40
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70
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White OnlyBlack OnlyNo Difference
Who Received The Lower Interest Rate
0
10
20
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80
White OnlyBlack OnlyNo Difference
Can there Be Discrimination After the Loan is Given: YES
There is no concrete evidence of this type of discrimination
There is anecdotal evidence done by several TV-magazine shows that indicate there may be evidence of racial discrimination in:– Treatment of customers with late payments
may differ by race
Can there Be Discrimination After the Loan is Given: YES
– For instance• Number of times late payments are allowed
before bringing additional penalties• Working out payments to bring loan up to date• Degree of lagging in payments before
foreclosure is started
Can there Be Discrimination After the Loan is Given: YES
– The worst case scenario:• Loans that are given with the express intent of expecting
a default in order to repossess and make a profit on the house
• Problem is that in this cases there is a downward bias in the loan discrimination since more are generally given
HOWEVER, these are anecdotal stories that may or may not represent and accurate representation of the treatment by minorities in the after lending process