March 2016 Article

Nuances of Steering and Blockbusting
By Jim Luger, CDEI
Certified Distance Education Instructor 

By now, you should be able to identify blatant violations of the Federal Fair Housing Act based on discrimination against protected classes. But two less blatant activities, steering and blockbusting, might have at first seemed relatively harmless to agents or brokers who later found themselves facing a fair housing discrimination claim.
Directing a prospective buyer or renter either toward or away from a particular area or property may be regarded as steering if it involves a protected class. This violation could happen with a seemingly well-intentioned assumption. For example, if an agent shows Muslim clients homes exclusively in a neighborhood close to a mosque, without specific instructions from the clients regarding their desire to live near a mosque.
When buyers say they want a “good” area, do not guess at the values and criteria that term may mean to them. Ask for specific geographic areas, property type descriptions, and price ranges. Terms like “safe” or “nice” are not descriptive enough, and may lead to discriminatory steering if you read too much into them.
Here are a couple of fictional examples of a real estate licensee’s discriminatory “mind reading:”
  • A young couple tell their agent Ruth they want to live in a townhouse complex with people whom they would be compatible with. Based on the implications of their statement, Ruth takes them to townhouse communities occupied mostly by families with children.
  • A buyer tells her agent Dick that she wants to live in a “low crime” area. Dick thinks he knows what she means, and chooses certain neighborhoods based only on demographics. 
A more blatant form of fair housing violation is when real estate agents or brokers drum up business by going to certain neighborhoods, knocking on the homeowners’ doors and telling them they should sell their home and move because someone from a protected class is moving in nearby, or that “those people” are taking over the neighborhood. Homeowners might be advised by the licensee to sell before their houses’ values start to plummet, and maybe even price it below market value for a fast sale.
Blockbusting could be construed in even subtler activities. As an example, a fictional real estate agent named Sam decides to begin a personal marketing campaign in his marketing area by mailing postcards promoting his services as a listing agent. After researching census data in his area, Sam discovers a trend of retired people moving into that neighborhood. Wanting to seem knowledgeable about the area, Sam includes this information in his postcard, and highlights his experience in working with empty nesters and seniors.
Steering and blockbusting violations can be avoided if you question your practices in light of the state and federal protected classes lists, and ask for specific information when buyers or renters give you vague property search criteria. 

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