Fair Housing

Today, we will discuss fair housing laws. The purpose of fair housing laws is to ensure that people of protected classes are not discriminated against during the process of real estate transactions. In this article, we break down a couple of laws that have been passed regarding this issue, as well as the three main types of violations of fair housing laws.

Protective Acts

The Civil Rights Act of 1866 outlawed racial discrimination in real estate transactions.The Civil Rights Act of 1968 outlawed discrimination in residential real estate transactions based on the following five protected classes: race, color, religion, national origin, and sex (gender).  In 1988, two more protected classes were added. Anyone with a mental or physical handicap was now protected. Finally, familial status became a protected class. This refers to families with children under the age of 18.  These acts ensure that one cannot legally  refuse to sell or rent to someone based upon race, color, religion, national origin, sex (gender), mental or physical handicap, or familial status. In addition, one cannot change terms for people based upon their protected class.

Violations

Three common types of fair housing violations are known as blockbusting, steering, and redlining. Blockbusting refers to real estate licensees encouraging  property owners to sell their  homes by telling them that people of a protected class are moving into the neighborhood. In essence, the licensee is trying to “bust up the block”. This is illegal under fair housing laws, specifically the Civil Rights Act of 1968. Another violation of fair housing laws is known as steering. . Steering refers to  licensees directing buyers  toward properties in a certain area of town based upon their race, religion, or national origin. This also violates fair housing  laws. Another type of violation is called redlining.  Redlining  is when lenders and insurance companies refuse to make loans or  issue insurance policies based on people of a protected class living in certain areas of town. . The term “redlining” comes from when lenders used to literally outline certain areas of town on a map with a red marker. These areas were designated as the parts of town the lenders refused to approve loans for because of the type of people that lived there. Again, this is illegal under the Civil Rights Act of 1968 . 

Fair Housing Exemptions

There are a couple exemptions to the fair housing laws. The first exemption applies to a property owner selling their own single-family home.  If the owner does not use a real estate agent and does not discriminate in advertising, they are exempt from fair housing laws. A second exemption applies to religious organizations. As long as a religious organization is non-profit or a non-commercial entity, they CAN discriminate based on religion. Although there are a couple exemptions to fair housing laws, the Supreme Court ruled in the 1968 case of Jones vs. Mayer that one can NEVER discriminate based on race. 

Handicap and Familial Status

The fair housing Amendments Act of 1988 had two additional protected classes: handicap and familial status.  As defined by this law, a handicap can be either  mental or physical. Congress did however specify that being addicted to illegal substances does not qualify as a handicap. Those that DO have a handicap as defined by this law are protected from having contract or lease terms changed based upon their handicap.  For example, a handicapped tenant  has the right to modify  a rented space at their own expense to make living conditions easier.  Multifamily units built after March 13th, 1991 must  be accessible to those with a handicap. If there is an elevator, all of the units must be accessible. If there is no elevator, then just the ground floor units  must be accessible. The second  protected class under the 1988 act is referred to as familial status, which covers a family with children under the age of 18. Prior to 1988, certain apartment complexes were designated for adults only.  Familial status being a protected class is why we don't see these anymore. The one exception to familial status is retirement communities. If  all residents are 62 years of age or older, then those particular retirement communities can say, “no children”. 

 Age is not covered under  fair housing laws, so  one can actually refuse to rent to someone based on their age.  If someone feels that they have been discriminated against, they may file a complaint with HUD, the Department of Housing and Urban Development, within one year.  Fair housing laws also state that all residential real estate offices must display a fair housing poster..Although HUD does encourage licensees to use the fair housing logo in all advertising, it is not required like the fair housing poster.

Hopefully you learned something new today about the ever-important fair housing laws. Understanding these laws and their intent is of the utmost importance in practicing real estate. Now let’s go knock out that test!