Five Ways Real Estate Brokerages can Help Dismantle Systemic Racism
Photo by Clay Banks on Unsplash
Beginning Saturday, June 20, New York State real estate agents are required to give out the fair housing disclosure form to every customer they come in “meaningful contact” with. This form explains customer rights regarding fair housing laws, and by giving this form, agents imply that they understand the law and do not engage in housing discrimination of any kind.
Because of the very nature of the industry, real estate agents often engage in explicit or implicit discrimination. Yet, none of these agents would ever call themselves “racist.” They speak in codes, talking earnestly and unironically about “working people” or “good people.” When discriminating against families, they talk about the “wear and tear” they believe a family could cause to the apartment.
Some agents swear they are not racist but ignore or “ghost” anyone who has a housing program, or even worse, string them along like a bad date they don’t feel ready to outright reject until someone better comes along. All of that needs to end. This new disclosure form is a means to do that. So yes, this could be a big moment in moving toward a more just and fair housing market in New York. Or it can be yet another empty gesture that will go largely unheeded by our industry. From my perspective, to make this a true success, agents need to feel the support of the brokerage companies for which they work.
Brokerages like my own are stepping up to educate their agents properly on fair housing laws, making a stand in support of the Black Lives Matter movement, and it’s a great start. But it’s not enough. Someday when our society reaches a higher consciousness it will be enough, but for now, we need to take baby steps. This requires understanding what it is like for agents to work on these kinds of deals, and to meet them where they are in their financial incentives and development. Brokerage firms should institute formal policies that incentivize their agents to work with clients who intend to pay their rent in full or in part with public rental assistance programs and vouchers such as Section 8, CityFHEPs, and HASA.
Agents will argue that their reluctance to work with clients using vouchers and programs has nothing to do with race. But, these agents are wrong. Our most fundamental institutions in the United States--including housing--are built on systemic racism and, whether agents have racist intent or not, the impact is to exclude Black and Brown New Yorkers from safe, habitable, and affordable rental housing.
Agents often complain about real obstacles to assisting clients with programs. There is extra paperwork, inexplicable bureaucratic delays, low broker fee payments that come months later, and a landlord’s fear the program funding will disappear. But, brokerage firms can combat these very real barriers as follows:
1) Training: by investing in solid training on rental assistance programs, agents can ensure the paperwork is complete and correct on the first round of submission.
2) Financial Incentives: by providing additional financial incentives to agents, they can afford to wait for compensation from the government that may be below their normal return. This may include allowing agents to keep 100% of the fee as well as offering additional bonuses to those agents who work on programs most frequently. Most agents have to “split” their commission with their brokerage firm, but an exemption from this policy for program rentals would increase incentives.
3) Internal reporting and intra-brokerage communication: by requiring agents to internally report landlords who do not take programs to ensure no other agents at the brokerage advertise units will eventually start to change landlord’s illegal policies.
4) Reporting to Government Enforcement Agencies: by having brokerage companies regularly report landlords who discriminate to the NYC Commission on Human Rights, the NYS Division on Human Rights, and the Attorney General’s Office, agents both insulate themselves from prosecution and cease aiding and abetting in landlord discrimination.
5) Awards, celebration and press: Offer prizes (including cash prizes) and public awards to those agents who work with programs most frequently and assist the most families with rental assistance programs and/or who have other difficult circumstances. Praise these agents and celebrate their work in the way brokerage companies celebrate their top producing agents.
Working with New York City’s most under-resourced communities--those coming from shelter and those relying on rental assistance programs--helps create long-term neighborhood stability and begins to chip away at the racism that permeates the real estate industry. Large brokerage firms particularly need to lead by example to ensure their agents are part of the solution, not part of the problem.
And certainly, it goes without saying, for any brokerage, the price of the commission lost or the cost of an award is far cheaper than a housing discrimination lawsuit.