Steering by Realtors
The Roles Realtors Played in Housing Segregation
Racial Steering Has a Long History
When real estate agents point homebuyers toward or away from certain neighborhoods on the basis of the buyers' race, that's called racial steering. The federal Fair Housing Act of 1968 made racial steering by real estate agents illegal. The National Association of Realtors formally opposed the passage of the Fair Housing Act of 1968, and evidence exists that the practice of race-based realtor steering continued well after 1968, nationally and in Lexington.
In the 2021 book Freedom to Discriminate: How Realtors Conspired to Segregate Housing and Divide America, Gene Slater asserts that realtors have played a definitive role in establishing and maintaining segregation in the US. Slater says realtor organizations committed themselves to a principle of property owners' freedom, without regard to the rights of others, and have used that principle to circumvent legal requirements designed to make home-buying racially equitable.
From 1924 to 1950, the Code of Ethics for the National Association of Real Estate Boards explicitly supported realtor steering, with the following language:
Article 34: A Realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individuals whose presence will clearly be detrimental to property values in that neighborhood (National Association of Real Estate Boards, 1924, emphasis added).
In 1950, the national Code of Ethics was amended to include a fuzzy language statement that offered some protection for realtors who continued to steer clients based on race:
Article 34: A realtor should never be instrumental in introducing into a neighborhood a character of property or use which will clearly be detrimental to property values in that neighborhood (National Association of Real Estate Boards, 1950).
This language provided some cover for realtors because of the untested, unproven, but widely shared belief that Black home ownership caused property values to decline. (The film Segregated by Design addresses this belief.) The steering provision of the Code of Ethics was not fully repealed until 1974.
Up to the Late 1960s, Most Lexington Realtors Resisted Integrated Housing
In 1965, an African American couple, Dr. Joseph Walter Scott and Sara Scott, bought a home in Cardinal Valley, then a predominantly White neighborhood that had been developed in the previous 4 to 7 years. Ben Story, a White Lexington realtor, represented them. Dr. Scott was a professor at the University of Kentucky (Lexington Committee on Religion and Human Rights, June 7, 1965). This was the first known sale of its kind in Lexington. The sale was perfectly legal, but Mr. Story faced resentment and criticism from other realtors, and anonymous threats to blow up his office or car. James W. Hammons, in an oral history interview, said Mr. Story received "an incredible amount of abuse" (Hammons, 1987). In addition, at a professional realtors' event not long after the sale to Dr. Scott, there were publicly stated calls, clearly directed at Mr. Story, for realtors not to sell homes in White neighborhoods to Blacks. At that time racial steering was still legal and had not been removed from the national Code of Ethics, and the kinds of responses Mr. Story received could be seen as informal sanctions for his failure to comply with the realtors' group norms. Mr. Story describes his experience in this oral history interview, conducted by the Urban League in 1978.
Dr. Scott became chair of the Housing Subcommittee of the Lexington Committee on Religion and Human Rights. In late 1965 the subcommittee wrote to the NAACP "for legal advice on the matter of real estate boards refusing to admit Negro real estate brokers." Membership in the Board of Realtors was not just a formality: at the time only members had access to the multiple listing service—the list of all available housing. The NAACP sent two legal briefs, and O. M. Travis, Jr., a prominent Black real estate and insurance broker, agreed to apply for membership in the Lexington Board of Realtors. (Lexington Committee on Religion and Human Rights, Nov. 29, 1965, Summer 1966).
Mr. Travis's application to the Board of Realtors was denied. He applied again some time later, and his application was again denied. Mr. Travis later told the Lexington Leader that the Board never told him why they turned him down, but he believed the reason was the Multiple Listing Service: "[The Board] didn't want a black salesman or broker to have listings of all the housing available in Lexington." (Woestendiek,1978, A12) . When Mr. Travis applied to the Board a third time -- in 1973, after passage of the Fair Housing Act -- he was finally admitted.
In 1978, the Kentucky Commission on Human Rights
Documented Racial Steering in Lexington and Louisville
Documented Racial Steering in Lexington and Louisville
Racial steering was made illegal by the Fair Housing Act of 1968. In 1978, the Kentucky Commission on Human Rights (KCHR) conducted a careful examination of race-based discrimination in realtor practices. The study featured trained, well-matched potential homebuyers who differed in no substantial way other than race. A Black and White potential homebuyer with equal buying power approached specific realtors with exactly matched requests, and then noted the differences in the two experiences. The bottom line for the Lexington portion of the study:
At the rate of two out of every three cases, blacks and whites seeking homes or apartments in Fayette County were given racially discriminatory information about the availability, prices and requirements during a scientifically conducted test of 30 real estate agencies and 30 apartment complexes (Kentucky Commission on Human Rights 1978, 7).
The report cited an example of two testers, one Black and one White, who asked to see houses in Lexington's Gardenside area. The real estate agent showed the White woman the multiple listing book and took her to see some of the houses. An agent in the same firm told the Black woman that there was no housing available in Gardenside of the type that had just been shown to the White woman. The agent suggested she look in a Northwest Lexington neighborhood that was "generally described as a low turnover area in racial transition and considered somewhat less desirable than the area requested" (Kentucky Commission on Human Rights 1978, 7).
The testers found numerous other examples of clearly discriminatory practices. For example, in at least two cases, real estate agents told Black (but not White) testers that they could not be shown houses until they applied and qualified for loans.
By 1987 Racial Steering Persisted in Lexington but Had Decreased
In the Early 1980s, the League of Women Voters Documented
the Ongoing Struggle to Integrate
the Ongoing Struggle to Integrate
In 1980, the League of Women Voters in Lexington, with printing help from local government Community Development Block Grant funds, published For the Record: Fair Housing Laws and Social Reality, a booklet containing several articles, including a Black professor's personal story of difficulty finding an appropriate house to buy. Portions that are particularly relevant to race-based realtor steering in home buying in Lexington include these excerpts:
This useful, detailed personal narrative about his own housing search in Lexington, written by George Wright, PhD, an African American who was then a University of Kentucky history professor.
"A Research Perspective on Housing Discrimination in Lexington, Kentucky," by J. Michael Brooks, PhD, who wrote the Lexington portion of the Kentucky Commission on Human Rights report cited above.
By the Late 1990s, Matters Had Improved Some in Lexington
The present-day Lexington-Bluegrass Association of Realtors (LBAR) maintains a Realtor-Community Housing Foundation and provides information about diversity to their members and the public through the Diversity Equity Inclusion" section of their website.
And yet...a National Study Found Realtor Steering in 2000, and again in 2012
The authors asserted that relying on victim-initiated complaints was a flawed approach in that "few victims of steering are likely to suspect it and file suit were they to become suspicious." This is because agents make their "most egregious" comments about minority-occupied areas to White clients, who are unlikely to file a complaint. Minority buyers, on the other hand, are unlikely to suspect they are being steered because agents usually show them some homes in predominantly White areas and offer some commentary (Galster and Godfrey 2005, 263).
In 2012 the Urban Institute and HUD conducted a follow-up study, this time including 28 metropolitan areas (but again not Lexington). A review of that study found that "housing discrimination had declined over time in some important types of agent behavior, such as making an advertised apartment available to a customer. Discrimination against Black and Hispanic homeseekers has not declined very much in some other types of agent behavior, however, and the steering of Black homeseekers away from White neighborhoods appears to have increased over time." (Oh and Yinger 2015, 40)