14 Ch 6 7 Steering, Blockbusting, and Redlining Advertising

14 Ch 6 & 7 Steering, Blockbusting, and Redlining & Advertising Flashcards BlockbustingLet's move on.Blockbustingis the illegal practice of causing owners to sell their homes by creating fear that members of a protected class are moving into the area.Blockbusting encourages the panicked selling of homes below market value, generally by raising fears that an influx of individuals belonging to a particular minority group will decrease property values in a neighborhood and affect the area negatively.License holders are unlikely to engage in blockbusting accidentally and without malicious intent. However, intent is not required for their actions to be a violation of the Fair Housing Act.So how does one... affirmatively market?Affirmative marketing requirements apply to housing within a participating jurisdiction with at least five HOME-assisted units (or properties with government restrictions on monthly rent and mortgage payment).These affirmative marketing

regulations for housing project owners may include:*

Restrictions on the ways to inform the public about affordable housing options in the community* Requirements to use public housing slogans or logos from the local government entities when advertising units with government-regulated prices* Documentation of all steps!Access to information is important when it comes to affirmative marketing. The more eyes, the better.So here

are some ways to get the word out to everyone:* Send

information through media outlets with wide circulation to the public.* Send direct mail to residents in lower-income areas, as they may be less likely to see electronic advertisements.* Publish advertising material in many different languages.RedliningNow on to redlining. Before the CRA was put into place (remember that?), people in poverty-stricken neighborhoods were forced to make larger down payments, and loans were set up for shorter terms.There were some areas where lenders would actually draw a line around a certain area on a map and refuse to lend to people in that area at all. This is an example ofredlining, which is the act of a lender refusing to issue mortgages in a specific area, and it'sdingdingdingillegal. Note that the refusal to lend can be based on income, but it can also be based on protected classes such as race.TheHome Mortgage Disclosure Act (HMDA)(another throwback to earlier in this level!) is one effort to combat redlining.Disparate ImpactSteering the buyer can make the license holder guilty ofdisparate impact. This means that an action taken by a license holder could be adversely affecting a protected class. Steering away from an area because of racial makeup or religious makeup orwhatevertakes away buyers from that area of town, and that's not good.Disparate impact does NOT have to be intentional.ExampleA Vietnamese family comes into agent Sid's office looking for a home. Sid knows of a good neighborhood with a substantial number of Vietnamese residents, one he thinks this particular family would enjoy.Sid wants to be helpful and takes it upon himself to only

show the family properties in this specific neighborhood.This, my friend,is considered steeringbecause he is directing the family away from other, less racially segregated neighborhoods. In this case, Sid was working to perpetuate segregation.Perhaps Sid did not have any malicious intent here I mean, he isn't trying to deprive the family of anything, nor does he hold any expressed negative beliefs about them. But it is still wrong for Sid to take this choice out of the family's hands. They should be allowed to choose for themselves among the various properties he has available, regardless of location.The Client's DecisionYou know this already, Robert, but it's

pretty easy to avoid steering. It's as easy as this:The client

gets to choose where they want to live.It is not a license holder's job to steer a client towards any particular neighborhood. It's illegal.What youcando as a license holder is provide the buyer with sufficient information about the neighborhood. If the

buyer is concerned with school districts, redirect them to the district's website or national rankings. Do not give the buyer your own opinion on education in the area.Also, do not tell them that certain areas are safer than others. Direct them to the police department or other sources and let them decide for themselves if the neighborhood is a good fit.

Blockbusting: HistoryBut how did this kind of stuff even

start? I'm glad you asked.Blockbusting came to be a few decades ago, as more and more minorities began moving into predominantly white neighborhoods.The homeowners in those neighborhoods were fearful that their new neighbors would result in their homes losing value. So, these people sold their homes and moved farther out into the county. This was known aswhite flight.Then, unethical real estate agents would sell the owner's home, usually to a minority buyer, and then help the seller buy another home in a different "white" area.Fair Housing PosterIt is important to mention that each real estate office should post a special fair housing poster in a prominent location, so that all can see it as they come and go.The poster below is required by HUD and is a declaration from the broker that the personnel of the company will give equal treatment to all who enter the office.HUD has stated that if an office is being investigated and this poster is not up, then it could be used as an indication that this office does not concern itself with fair housing matters. So put that poster up!Panic PeddlingBlockbusting may also be referred to aspanic peddlingorpanic selling. Those wishing to foster this panic selling often cite effects, such as a decline in the quality of education and an increased crime rate, even though there is no justification for making these claims.At its core, though, blockbusting is a profit-seeking practice that relies upon mistaken and discriminatory ideas about various protected classes, and uses these to induce people to engage in real estate transactions that are not in their best interests. As such, it violates the Fair Housing Act and encourages people in holding on to their discriminatory beliefs.SteeringAs I mentioned earlier,steeringis the illegal act of guiding prospective home buyers towards or away from certain neighborhoods because of their membership in a protected class.Typically, steering happens in one of two

ways:A real estate agent will advise a client to purchase

homes in particular neighborhoods based on race or another protected class.A real estate agent will fail to show or inform buyers of homes that meet their specifications based on race or another protected class.Typically, steering is premised on the notion that the potential buyer will be either incompatible or unacceptable to the residents of a housing area due to race, religion, national origin, etc., or that the residents of an area will be unacceptable to that buyer due to racial, religious, or other differences.Find neutral alternatives for these terms. Doing so will not only open you up to all kinds of clients, it shows you're ready and willing to learn how to do business betterThe survey found that for every 10 homebuilders in the D.C.area, six no longer use the word. That's a lot! Instead, these builders are using terms like "owner's suite" or "owner's bedroom." "Great view""Fourth floor walk up""Walk-in closets""Jogging trails""Bus stop""Non-smoking""Two-bedroom""Bicycles allowed""Wheelchair ramp"