Housing Industry Spotlighted for Steering In Senate

Significant inequality in the housing industry due to steering, redlining, and overt racism has been uncovered and the government is making moves to save consumers from the industry that claims to help them.

Equal housing is a right – but far from equal. Redlining is outlawed – but in practice it is very much on the map. Steering is illegal – but practiced daily.

How do I know this to be true? Thanks to an amazing article by my friend, author and attorney Rob Hahn about the New York Senate Hearings, the interviews with realtors and brokers from Long Island that followed the revealing revelations of racism in the 3 year long Newsday research piece.

This is a landmark case, with game changing testimony that is opening the eyes of the government to the severity of the problems within real estate.

Rob’s article really does a nice job of summarizing the most stunning segments of the 7 hours of testimony – but I wanted to take a different angle.

Brief History:
The Office of Fair Housing and Equal Opportunity was created by the Fair Housing Act of 1968 which sought to end discrimination in the sale, rental, and financing of housing based on race, color, religion, and national origin. The passage of the Act was contentious. The Fair Housing Act was meant to be a direct follow up to the Civil Rights Act of 1964, however from 1966 to 1967 Congress failed to garner enough political support for its passage. At that time several states had passed their own fair housing laws and Congress was not convinced that a federal law was necessary. It was only after the assassination of Martin Luther King Jr. on April 4, 1968, and the ensuing riots, that Congress finally passed the bill. It was signed into law on April 11, 1968, by President Lyndon B. Johnson. (Wiki)

The mission of FHEO is to create equal housing opportunities for all persons living in America by administering laws that prohibit discrimination in housing on the basis of race, color, religion, sex, national origin, disability, and familial status.

Say it with out Saying it?

Clearly there is a void of education, understanding, compassion within the working ranks of NAR membership. The Newsday research uncovered undeniable proof of racism and steering, and loads of it between many ethnicities. Here’s an example from the senate hearings that breaks my heart and concerns me deeply.

Thanks to Rob for this clip

The seven min video is worth the watch for sure.

3:50 Senator Kavanaugh “What is steering?”

Agent Rosemarie Marando “Um, I shouldn’t have used that word …. and I don’t steer my clients, ever”

Senator Kavanaugh “You probably shouldn’t have used the word” … “Do you think saying the word steer vs not saying the word steer is relevant to violating the law?”

Agent Rosemarie Marando “I should have not used the word steer”

This witty banter goes on… Clever avoidance of the question, or lack of understanding of the rules? Ignorance may be bliss, but failure to accept responsibility for your actions is childish in either case.

To quote from Rob’s Article “Apparently the only thing Marando learned is that she should not have used the word “steer.” Apart from that one insignificant detail, she has learned nothing even after being busted by Newsday.”

Actually it wasn’t just her. None of the dozens of representatives of the real estate community that were caught took responsibility for their actions. They pointed fingers and claimed unique circumstances. But thats the point of a 3 year study… it was far from unique. It was a demonstrated, documented and thoughtfully revealed pattern of discrimination.

The response to being caught was handled poorly and is embarrassing.

The Storm Has Arrived

NAR’s Job

NAR – you need to step up and save your industry and save the people you represent from themselves. You need to manage and educate and train your membership. From the outside it looks like wolves are guarding the henhouse. More appropriately this looks like the friggin wild west and by your actions (there is nothing to see here, sir) you seem to be asking for a new sheriff that will enforce the rules. Is that what you want? More oversight and red tape?

The New Sheriff

I appreciate the desire to reduce government oversight, rules and regulations. I do. In most cases, the rules are put in place, when there has been demonstrated precedent for doing something that is unfair or unjust. The govt has to swoop in to clean up the mess because the industry or individuals have run amuck, are not able to police them selfs and are harming others.

Clearly, the evidence shows it is time.

The housing industry is in the spotlight right now – and the spotlight will reveal the flaws – causing additional govt oversight.

This is not unlike the great recession that was “caused by housing”. Homeowners lacked equity to survive a downturn, were foreclosed on and demanded the govt hold mort companies responsible. So, the Govt oversight changed mortgage and housing rules to prevent people from being exploited (at the request of voters).

So today, What is NAR doing? Reportedly they are considering changing the speech language in the code of ethics. Wow. Very helpful. (thats sarcasm) Is an edit to the code of ethics even a baby step forward?

Sen. Skoufis: “any hope that we may have had that the industry has decided it has reached a critical inflection point and wants to better itself, has just been completely eviscerated by this hearing”
“Our society demands better. We deserve more accountability”
“It means we have work to do, and its going to take real govt oversight action legislation and penalties to change things”

Moving Forward

Without proper changes, education, enforcement and strong leadership there will be more problems in the future, and more issues revealed – and this will lead to additional oversight and management of the industry.

Again, From Rob’s Article:
“You can almost feel Cafarela pissing his pants when Sen. Thomas straight up asks him about limiting the number of agents he can supervise. Seeing as how this issue of too many agents under one broker is a consistent theme for Sen. Thomas, I think we can expect that he will introduce legislation in New York that does just that.

Plus, Sen. Kavanaugh during the closing mentions a wide variety of legislative solutions that are already in the pipeline, and will be considered as the result of these hearings. Yeah, I would think so.“

OR more likely, since NAR & RPAC who manage the largest lobbies in Washington will write a press release, say sorry and sweep the whole thing under the rug… lets hope they take the high road. We (and more importantly consumers) need change now.