Steering (Real Estate)

Steering is a discriminatory and illegal practice in the real estate industry. It occurs when real estate agents or brokers influence the choices of prospective home buyers or renters to direct them into or away from specific neighborhoods based on racial or ethnic considerations. This practice preserves patterns of segregation and contravenes fair housing laws in many countries, including the United States.

Examples

Refusing to Show Properties: A real estate agent may show minority buyers homes only in predominantly minority neighborhoods, regardless of the buyer’s interest in other areas.
Selective Information: An agent provides detailed information about some neighborhoods but gives limited information or misinformation about others, in an effort to influence a buyer’s choice based on race or ethnicity.
Directional Guidance: When a buyer of a particular race shows interest in an area predominantly inhabited by another race, the agent may subtly discourage them by overstating negatives like crime rates or school quality.

Frequently Asked Questions (FAQs)

Why is steering illegal?

Steering is illegal because it violates fair housing laws designed to prevent discrimination and ensure equal housing opportunities for all individuals, regardless of their race, ethnicity, or other protected characteristics.

What laws prohibit steering?

In the United States, steering is prohibited under the Fair Housing Act of 1968, which outlaws discrimination in housing sales, rentals, and financing based on race, color, national origin, religion, sex, familial status, and disability.

How can steering affect communities?

Steering can perpetuate segregated living patterns, limit diversity, and restrict economic opportunities for minority groups. It undermines efforts to build inclusive communities and exacerbates social inequalities.

How can victims of steering take action?

Victims can file a complaint with the U.S. Department of Housing and Urban Development (HUD) or their local fair housing agency. They may also seek legal counsel to explore further actions against discriminatory real estate practices.

Can real estate professionals be penalized for steering?

Yes, real estate professionals found guilty of steering can face severe penalties, including fines, license suspension or revocation, and civil lawsuits. These actions are intended to deter discriminatory practices and uphold fair housing standards.

1. Redlining: The discriminatory practice where services are withheld or made more difficult to obtain in certain neighborhoods based on racial or ethnic composition. 2. Blockbusting: The practice of convincing homeowners to sell their properties at low prices by instilling fear that racial minorities will soon be moving into the neighborhood. 3. Fair Housing Act: A federal act in the United States designed to eliminate discrimination in the housing market. 4. Ethnic Segregation: The separation of people into different neighborhoods based on their ethnicity or race.

Online Resources

Suggested Books for Further Studies

“The Color of Law: A Forgotten History of How Our Government Segregated America” by Richard Rothstein - This book recounts how federal, state, and local policies systematically imposed residential segregation.
“The Fair Housing Act” by Editors of Nolo - A practical guide to understanding rights and protecting against housing discrimination.
“American Apartheid: Segregation and the Making of the Underclass” by Douglas Massey and Nancy Denton - This book explores the consequences of residential segregation in America.

Fundamentals of Steering: Real Estate Basics Quiz

### Which legislation primarily prohibits the practice of steering in the United States? - [ ] Civil Rights Act of 1866 - [x] Fair Housing Act of 1968 - [ ] Housing and Community Development Act of 1974 - [ ] Equal Credit Opportunity Act > **Explanation:** The primary legislation prohibiting steering in the United States is the Fair Housing Act of 1968, which aims to prevent discrimination in housing practices. ### What is the main consequence of steering for communities? - [x] Segregation and limited diversity - [ ] Increased property values - [ ] Lower crime rates - [ ] Enhanced community cohesion > **Explanation:** Steering leads to segregation and limits diversity within communities, maintaining and reinforcing racial and ethnic divisions. ### What immediate action can victims of steering take? - [ ] Sue the real estate agent directly - [x] File a complaint with HUD - [ ] Publicize the issue in social media - [ ] Move to a different city > **Explanation:** Victims can file a complaint with the U.S. Department of Housing and Urban Development (HUD), which is equipped to handle fair housing violations. ### Which of the following is a discriminatory practice closely related to steering? - [ ] Property flipping - [ ] Mortgaging - [ ] Crowdfunding - [x] Redlining > **Explanation:** Redlining is a discriminatory practice closely related to steering, involving the refusal or limitation of services based on race or ethnicity. ### What ethical responsibility do real estate professionals have regarding steering? - [ ] To navigate around housing laws - [x] To provide equal housing opportunities to all clients - [ ] To maximize profits regardless of legal restrictions - [ ] To promote ethnic homogeneity > **Explanation:** Real estate professionals have an ethical responsibility to provide equal housing opportunities to all clients, regardless of race or ethnicity. ### Steering is designed to influence a prospective buyer's choice based on: - [ ] Financial status - [ ] Neighborhood amenities - [x] Race or ethnicity - [ ] Property size > **Explanation:** Steering is designed to influence a prospective buyer's choice based on their race or ethnicity, which is illegal under fair housing laws. ### How does the Fair Housing Act combat steering? - [ ] By mandating price ceilings for properties - [x] By prohibiting discrimination in housing-related transactions - [ ] By requiring agents to hold regular diversity training - [ ] By promoting rural development exclusively > **Explanation:** The Fair Housing Act combats steering by prohibiting discrimination in housing-related transactions based on race, color, religion, sex, or national origin. ### What should a real estate agent provide regardless of a client's racial or ethnic background? - [x] Equal access to all available properties - [ ] Financial advice - [ ] Legal representation - [ ] Personal lending options > **Explanation:** A real estate agent should provide equal access to all available properties to all clients, regardless of their racial or ethnic background. ### Which term describes a practice designed to make people sell their properties at low prices by scaring them about incoming racial minorities? - [x] Blockbusting - [ ] House flipping - [ ] Mortgage lending - [ ] Auction bidding > **Explanation:** Blockbusting is the practice of making people sell their properties at low prices by scaring them about the impending arrival of racial minorities into their neighborhood. ### What is one of the best ways to prevent steering in real estate? - [ ] Limiting the number of homes shown to each client - [x] Comprehensive and regular fair housing training for agents - [ ] Increasing property prices indiscriminately - [ ] Encouraging ethnic homogeneity in neighborhoods > **Explanation:** One of the best ways to prevent steering is through comprehensive and regular fair housing training for real estate agents, ensuring they understand and comply with fair housing laws.

Thank you for exploring the detailed aspects of steering in the real estate sector with us. Continue striving for knowledge and equality in your housing endeavors!