Report Shows Spike in Housing Discrimination Due to Foreclosure Crisis, Internet Advertising

In its annual fair housing trends study, the National Fair Housing Alliance (NFHA) reported that housing discrimination in the nation has spiked this past year for two key reasons: Internet advertising that violates fair housing laws and the worsening of the foreclosure crisis. In fact, private fair housing centers around the country have seen more cases of discrimination in mortgage lending than ever before, according to the report, titled “Fair Housing Enforcement: Time for a Change.”

“Fair housing advocates have been warning the federal government for a decade, to no avail, about the damage that abusive lending would bring,” says Shanna L. Smith, NFHA president and CEO. “For too long, HUD and the Justice Department have stood by while people and neighborhoods of color have been targeted for predatory loans and stripped of equity. As we look forward to working with the new administration to bring in an era of change, the change must begin with HUD’s and Justice’s fair housing enforcement programs.”

Predatory lending—and the subsequent foreclosure crisis—has a direct impact on fair housing concerns for the multifamily industry. “As a result of the foreclosure crisis, hundreds of thousands, many in protected minority groups, are being forced back into the housing market to find alternative housing because their homes are being foreclosed upon,” says Don Kahl, executive director of the Equal Rights Center, a Washington, D.C.-based nonprofit civil rights organization. “As this pool of distressed buyers becomes distressed renters, those people who are willing to prey on those marginal groups increase as well.”

The trends report also notes that 93 private nonprofit fair housing organizations processed almost twice as many cases last year as HUD and the U.S. Department of Justice, and 107 state and local governments combined. In itself, however, the statistic is not a cause for concern, says John Trasvina, HUD’s newly appointed assistant secretary for fair housing and equal opportunity. “It’s really not a competition between the private sector and the government as to who gets the most cases,” he says.

Still, Trasvina adds that while there is no consensus as to whether a high number of complaints is a good thing or a bad thing (a low number of complaints might mean there is less discrimination or rather people just aren’t reporting complaints), it’s clear that fair housing education and training must be a priority of the new administration. The report shows “there is a lot of frustration over the perceived lack of activity and perhaps the reality of not enough cases being filed and not enough work being done so I share that frustration,” Trasvina says. “We know we have a job to do to make ourselves more relevant to members of the public.”

NFHA’s study offers a number of recommendations critical to instituting a strong fair housing enforcement and education mechanism. These include creating an independent fair housing enforcement agency; improving HUD’s complaint processing; improving DOJ’s fair housing enforcement; and strengthening HUD’s fair housing initiatives program, which is the primary federal program that funds private fair housing groups whose mission is to carry out education and enforcement activities. (For more information on HUD's fair housing programs, visit www.hud.gov/fairhousing.)

“The report identifies what we already know,” Kahl says. “Even now, 41 years after the fair housing law was signed into law by President Johnson, there is still a tremendous amount of housing discrimination and a tremendous amount of work to be done by HUD, the government, and private agencies to educate and enforce compliance."