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Hispanic Housing Market: Study Addresses Discrimination

If you want to work with the Hispanic community, the first thing you have to do is understand their fears concerning the real estate process and why they have those fears. A study just released by the U.S. Department of Housing and Urban Development (HUD), Housing Discrimination against Racial and Ethnic Minorities 2012, addresses these concerns.

Beginning in the late 1970s, HUD has monitored trends in racial and ethnic discrimination in both rental and sales markets. In this study, two trained individuals—one white and the other Hispanic—contacted a housing provider to inquire about a housing unit selected from recently advertised homes and apartments. Here is what the report revealed about the Hispanic community.

Sales Market Discrimination

The report summarizes the most important forms of treatment at each of the three steps in the housing inquiry (ability to make an appointment, availability of homes, and agents’ willingness to show homes) in a homebuyer’s inquiry:

Is the homebuyer able to make an appointment to meet with an agent?

If they can make an appointment:

  • Is the homebuyer told that at least one unit is available?
  • How many homes are available?

If homes are available:

  • What price is quoted?
  • How helpful is the agent?
  • Is the home seeker shown available units?
  • How many homes are shown?
  • What is the racial/ethnic composition of the tracts where homes are shown?

The Good News Revealed in the Study

There were many aspects of the study that showed the issue of discrimination is actually improving. For example:

  • When both white and Hispanic members of a tester pair meet with a sales agent in person, they are equally likely to be told that something is available and to have at least one home recommended by the agent.
  • On average, agents recommend the same number of homes to both white and Hispanic testers.
  • The prices for the homes recommended to white and Hispanic homebuyers do not differ significantly.
  • Overall levels of agent helpfulness to white and Hispanic homebuyers are generally similar.
  • The neighborhoods to which Hispanics were recommended and shown homes do not differ significantly in any respect from the neighborhoods whites were shown homes.

Still Areas of Concern

  • Hispanics are more likely than whites to be asked about their credit.
  • Agents are 6.2 percentage points more likely to make follow-up contact with whites than with Hispanics and 7.0 percentage points more likely to make positive comments about housing as an investment.

Rental Market Discrimination

The rental segment of the study did not do as well. The report shows the most important forms of treatment at each of three steps in the rental housing inquiry:

Is the home seeker able to make an appointment to meet with an agent?

If so they do meet with an agent:

  • Is the home seeker told that at least one unit is available?
  • How many units are available?

If units are available:

  • What rent is quoted?
  • Is the home seeker shown available units?
  • How many units are shown?
  • How helpful is the agent?

The Good News Revealed in the Study

  • Whites and Hispanics are equally likely to be able to arrange a meeting with an agent.
  • The quality of units shown to white and Hispanic home seekers does not differ significantly.
  • Almost none of the comments, questions, and information provided to Hispanics and whites differ significantly.

However, Many Challenges Still Exist in the Rental Market

  • Whites are 3.3 percentage points more likely than Hispanics to receive follow-up contact from agents they visited.
  • When both white and Hispanic members of a tester pair are told about available units, whites are more likely than Hispanics to be offered a lower rent than their partners.
  • Whites are more likely to be informed about rent incentives and more likely to be told that security deposit or bond requirements are negotiable, possibly giving them more bargaining power in lease negotiations.
  • Whites are more likely to be told about payments required at move-in. When all the fees, deposits, and incentives are considered together with rent, whites are offered lower annual net costs than Hispanics—$101 lower on average.

Let’s make sure that the Hispanic community is receiving the same treatment as everybody else. Latinos are a loyal community and, if treated properly, will refer us to everyone they know. Make the Hispanic community a part of your business!


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