HUD Archives: News Releases

HUD RELEASES REPORT: DISCRIMINATION IN METROPOLITAN HOUSING MARKETS 1989-2000
Shows Housing Discrimination Declining but More Work to be Done

WASHINGTON - A HUD study released today, Discrimination in Metropolitan Housing Markets: Phase I, shows that housing discrimination nationwide against African Americans and Hispanics looking to buy a home is down more than 25 percent since 1989. For those seeking to rent a unit, housing discrimination against African Americans is down 18 percent, but is unchanged for Hispanics.

"These results illustrate that we are making efforts but there is still work to be done," said Housing and Urban Development Secretary Mel Martinez. "Every American should have equal access to housing opportunities."

"The downward trend reflected in the study and a more targeted education and enforcement effort on our behalf will help us to achieve the President's goal of 5.5 million new minority homeowners by the end of the decade," added Martinez. "The increased homeownership rates for African Americans and Hispanics in the third quarter of 2002, reflect that we are knocking down barriers and opening doors for more minorities."

The study is the most ambitious effort to date to measure the extent of housing discrimination in the United States against persons because of their race or ethnicity. Conducted by The Urban Institute, this is the third nationwide effort sponsored by HUD to measure the amount of discrimination faced by minority home seekers. The previous studies were conducted in 1977 and 1989.

HUD will use the research to document the nation's progress in reducing housing discrimination, but also to better target education and enforcement resources. Since 1989, HUD has been competitively awarding grants to public and private fair housing groups as well as to state and local agencies under the Fair Housing Initiatives Program (FHIP). Groups use the money to educate the public and housing industry about discrimination laws, to promote fair housing, and to investigate allegations of housing discrimination. Initially funded at $5 million, HUD this year is awarding $20 million in FHIP grants.

Methodology

The study used a technique called "paired testing" to measure the level of housing discrimination. Paired testing matches two individuals, one minority and the other white non-Hispanic, and assigns them otherwise nearly identical characteristics. They both respond to the same advertisement within a short time of one another and independently record their experiences. Analysts then compare those experiences to determine which tester received adverse treatment on different treatment variables. Treatment variables are the various opportunities agents have to behave differently toward the paired testers. For example, each tester asks about the same advertised unit. If the unit is available to one and not the other, that test is recorded as showing adverse treatment toward the tester for whom the unit was not available.

Report Findings

The results, based on 4,600-paired tests, show that between 1989 and 2000:

• Renters: Discrimination against blacks has declined to 22%, down from 26% but discrimination against Hispanics has stayed about the same at approximately 25%.
• Home Sales: Discrimination against blacks has declined to 17%, down from 29% and has declined for Hispanic homebuyers to 20%, down from 27%.
• Overall, Hispanic renters now are more likely than African Americans to experience discrimination in their housing search.

Forms of Discrimination

Some types of adverse treatment toward minorities are more prevalent than others depending on the type of transaction and the race or ethnicity being tested. Specifically,

• Black renters - housing availability and inspections
  
• Hispanic renters - housing availability, inspections and encouragement
  
• Black buyers - inspections, steering, financing help and encouragement
  
• Hispanic buyers - steering and financing help

"Housing availability" refers to whether a tester is told that an advertised unit, or something comparable, is available to the tester. For example, a minority tester might be told, "sorry, we just rented the last one" when a white tester is told "yes."

"Inspections" refers to whether a tester was actually able to see the advertised unit or similar units or homes. This factor also includes a comparison between testers of the number of units they actually see.

"Encouragement" refers to the way the rental or sales agent encouraged or helped the tester to complete the transaction, including inviting the tester to complete an application or arrange for future meetings.

"Steering" occurs when one tester is recommended or shown units located in neighborhoods that are more white than the other tester.

"Financing help" pertains to the level of information and assistance with mortgage financing from the real estate agent the tester visited.

Although rates of adverse treatment are down on most measures for African American and Hispanic homebuyers, there are worrisome upward trends of adverse treatment in the areas of geographic steering for African Americans and, relative to non-Hispanic whites, the amount of help agents provide to Hispanics with obtaining financing. On the rental side, Hispanics are more likely in 2000 than in 1989 to be quoted a higher rent than their white counterpart for the same unit.

Although rates of adverse treatment are down on most measures for African American and Hispanic homebuyers, there are worrisome upward trends of adverse treatment in the areas of geographic steering for African Americans and, relative to non-Hispanic whites, the amount of help agents provide to Hispanics with obtaining financing. On the rental side, Hispanics are more likely in 2000 than in 1989 to be quoted a higher rent than their white counterpart for the same unit.

Metropolitan Data

The study specifically measures the level of Hispanic and/or black housing discrimination versus the treatment of white testers in 20 metropolitan housing markets:

• Black and Hispanic testing - Austin, Chicago, Denver, Houston, Los Angeles, New York
• Hispanic Testing Only - Pueblo, CO; San Antonio; San Diego Tucson
• Black Testing Only - Atlanta, Birmingham, Dayton-Springfield, OH, Detroit, Macon, GA, New Orleans, Orlando, Philadelphia, Pittsburgh, Washington, DC

These results show that most metropolitan areas experience housing discrimination at or near the national level. However, for black/white tests, the overall incidence of consistent white-favored treatment for renters was higher than the national average in Atlanta, and significantly lower than the average in Chicago and Detroit. In sales, discrimination was higher than the national average in Austin, TX and Birmingham, AL; and significantly lower in Atlanta and Macon, GA. For Hispanic/non-Hispanic white tests, the incidence of consistent white-favored treatment for renters was lower than the national average in Denver. In sales, discrimination against Hispanic renters was above average in Austin and New York and below average in Pueblo and Tucson.

This is the first phase of four housing discrimination reports. Future studies will provide a national estimate of discrimination against Asians, statewide estimates of discrimination against Native Americans, and metropolitan estimates of discrimination against persons with disabilities. In addition to the 20 markets with data from black and/or Hispanic tests, paired tests were done in three additional markets (Minneapolis, Phoenix and Cochise Co., AZ) as part of a pilot test for methodology in testing for discrimination against Asians and Native Americans, for a total of 23 markets covered by Phase 1 of the study.

Copies of the report can be downloaded as well as ordered on line or by calling (800) 245-2691.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.

Anyone who believes they have experienced housing discrimination is asked to call HUD's Housing Discrimination Hotline at (800) 669-9777. They can also visit HUD's website.

Incidence of Adverse Treatment against African American and Hispanic Testers Inquiring about Advertised Units

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Content Archived: April 9, 2010