What is Fair Housing?

 Debbi Conrad  |    April 02, 2008

REALTORS® are taught that fair housing means providing each and every person equal access to housing. Fair housing is “Equal Housing Opportunity.” But what does this really mean? Is fair housing simply a set of laws, or is it a way of thinking and behaving that is intertwined with the fundamental American principles of freedom and opportunity? OR – Is it just good business?

Fair Housing Laws and Principles 

The legal aspects of fair housing originate with the federal Civil Rights Act of 1866, which states, “All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.” This was interpreted by the U.S. Supreme Court in Jones vs. Mayer (1968) to prohibit public and private racial discrimination in the sale or rental of real estate. At that time, fair housing law was generally thought of in terms of prohibiting housing discrimination against African-Americans who were refused housing because of their skin color, ancestry and race. Prejudiced Americans who had been taught to fear the unknown excluded African-Americans from housing and neighborhoods; they thought it best to segregate African-Americans. Regrettably, discrimination against African-Americans is not just an ugly memory from the past, as evidenced by the numerous cases of racial discrimination against African-Americans handled by the U.S. Department of Housing and Urban Development even today.

The 1968 federal Fair Housing Act prohibits discrimination in the sale, renting or financing of housing on the basis of race, color, religion, gender and national origin. The 1988 Fair Housing Amendments Act created new protected classes based on handicap and familial status. Additional protected classes under Wisconsin law include sexual orientation, marital status, lawful source of income, age and ancestry. Fair housing law makes it illegal to discriminate based on these characteristics in the sale and rental of housing.

Equal Housing Opportunity 

What do these laws really stand for? 

Fair housing means that no one should be denied an equal opportunity to have a decent home based on someone’s insecurities and irrational fear of someone who is different. Fair housing means that sellers, landlords, REALTORS® and others involved with the provision of housing may have to, at times, move out of their comfort zone and work with sellers, buyers and tenants who speak a language that is different from the language they speak, or who have different physical characteristics than the ones they were born with, or who observe customs that are different from their own traditions.

Fair housing also means treating all of these sellers, buyers and tenants the same, providing equal access to housing and not prejudging where they may want to live based upon perceived characteristics or stereotypes.

Ethical Lending Practices 

Fair housing, however, does not mean getting a buyer qualified for financing and into a home at any cost. In order for consumers to achieve the American dream of homeownership, they have to first qualify for financing. This may necessitate sending potential buyers to credit and homeownership counseling before they may qualify for financing. Equal Housing Opportunity means encouraging consumers to seek assistance from reputable counselors and lenders and to take advantage of down payment or other financial assistance offered by various agencies and institutions. However, some buyers may only be able to qualify for a loan at exorbitant costs and upon unconscionable terms from predatory lenders. Pursuing these loans or participating in mortgage fraud often will only hurt buyers in the long run. Some will not be able to keep up with mortgage payments that well exceed what they can reasonably afford and may end up with their homes in foreclosure or filing for bankruptcy. Participation in unethical lending harms buyers as well as the real estate industry.

Affordable Housing 

To truly achieve fair housing, there first must be affordable housing. It really cannot be said that someone has equal opportunity for housing if the available housing is far beyond his or her financial capabilities. Complex environmental regulations, restrictive zoning, excessive impact fees, slow and burdensome permitting processes, outdated building and rehabilitation codes and other exclusionary or unnecessary restrictions impose obstacles to overall housing development and can have severe consequences for affordable housing. Nurses, teachers and other workers increasingly find they cannot afford to live in the communities where they work. Affordable housing is a serious concern for all communities and a crucial component of fair housing.

Why is Fair Housing Important? 

Fair housing is important simply because it is the law. Federal housing discrimination violations carry a maximum civil penalty of $11,000 for a first offense, in addition to the complainant’s actual damages, any injunctive relief and attorneys’ fees. Similar remedies are available to victims of discrimination under Wisconsin law.

For real estate brokers and salespersons, their licenses may also be at stake if they engage in illegal steering or if they treat “any person unequally solely because of sex, race, color, handicap, national origin, ancestry, marital status or lawful source of income.” In addition, it is a violation of real estate license law for a licensee to discriminate against any person, deny equal services to any person, or be a party to any plan or agreement to discriminate in violation of applicable federal, state or local fair housing law.

More importantly, however, fair housing is simply good business for the 21st-century real estate professional. As data from the U.S. Census Bureau illustrates, Wisconsin is becoming increasingly diverse as the Latino and Southeast Asian populations in Wisconsin continue to grow. The number of persons from other countries and cultures in Wisconsin also seems to be on the rise, for example, Somalian refugees settling in northwest Wisconsin and Minnesota. Successful and profitable REALTORS® will be prepared to provide services to people from different cultures who practice different customs and speak a language other than their own.

The overall population in this country and in this state is also aging. Whether or not we like to think about it in those terms, many of these elderly individuals may develop various disabilities or have special needs as they mature, and this will increase the demand for housing that readily accommodates older persons or persons with disabilities. The successful and profitable REALTOR® will also be prepared to serve the growing elderly population and everyone else who has a disability or special need.

Making a Fair Housing Commitment 

While some REALTORS® view fair housing as a group of laws to be concerned with when composing advertising or showing properties, others take that extra step and make a commitment to promote fair housing and a better quality of life for everyone in their communities. REALTORS® can join their local fair housing/equal opportunities organizations or committees, work on Habitat for Humanities or Home From Work projects, participate in Latino or Hmong outreach programs, volunteer for the United Way or the Salvation Army, or simply attend local festivals or fundraising events that support community organizations that help make the community a more equitable and enjoyable home for everyone.

Protected Classes Under Federal Fair Housing Law 

Fair housing law provides that it is unlawful to discriminate based on: 

Race: A person’s membership in a group possessing characteristics and traits transmitted by descent, e.g. white, African American, Hispanic, etc.

Color: A person’s skin color.

Religion: A person’s religious or spiritual beliefs and practices, or his or her denominational affiliations.

Sex: Whether a person is male or female.

Disability: Whether a person has a physical or mental disability that substantially limits one or more major life activities, has a record of such a disability, or is regarded as having such a disability. Examples include hearing, mobility and visual impairments; chronic alcoholism; chronic mental illness; AIDS and HIV positive; mental retardation; multiple sclerosis; and epilepsy. This class does not include a person who currently uses illegal drugs/controlled substances. In Wisconsin, this class does include a person using illegal drugs/controlled substances if the person is in a supervised drug rehabilitation program.

National Origin/Ancestry: The country from which a person or his or her ancestors originated or came is his or her national origin. Ancestry refers to a person’s racial and ethnic background.

Marital Status: Whether a person is single, married, divorced, separated or widowed (Wisconsin law).

Familial/Family Status: Whether persons are members of families in which one or more children under 18 years old live with a parent, a person with legal custody, or the designee of the parent or legal custodian (with written permission). This class also includes pregnant women and persons seeking legal custody of a minor. Wisconsin law also includes persons seeking physical placement or visitation rights of a minor child and persons whose households include one or more adults or minors in their legal custody, or pursuant to physical placement, visitation rights or a court-ordered guardianship.

Sexual Orientation: Whether a person has a preference for heterosexuality, homosexuality or bisexuality; has a history of such preference; or is identified with such a preference (Wisconsin law).

Lawful Source of Income: The source of a person’s income, provided that it is legal. This includes lawful compensation or remuneration in exchange for goods or services; profit from financial investments; and any negotiable draft, coupon or voucher representing monetary value such as food stamps, Social Security, public assistance, unemployment compensation or worker’s compensation payments (Wisconsin law).

Age: The age of persons at least 18 years old. Children under 18 years of age are protected on the basis of family status (Wisconsin law).

Additional protected classes may be included in local equal opportunity ordinances.

Debbi Conrad is Director of Legal Affairs for the WRA.

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