Newsday Investigation Reveals Sweeping Real Estate Discrimination On Long Island

A major investigation in Long Island, New York, finds African American homebuyers are shown fewer listings and steered away from white neighborhoods.

Keith Herbert, investigative reporter for Newsday. (@KeithHerbert)

Johnnie Mae Alston, tester for the Newsday series. Retired civil servant for the state government.

Leslie Hammond, independent realtor and broker in Hartford, Connecticut. (@LeslieHammond2)

Claudia Aranda, director of field operations for the Urban Institute, which has done more than 8,000 paired tests in 44 markets on both sales and rentals nationwide. (@urbaninstitute)

On "paired testing," the gold standard in testing housing discrimination, and how it works 

Keith Herbert: “We use the method of 'paired testing' because, like you said, it's the gold standard. But it would allow us to examine what was going on in Long Island's housing market. Mostly because Long Island, as you may know — fairly segregated place. It ranks among the top 10 most segregated places in suburban regions of the country. We have basically a dozen pockets where minorities live on Long Island. And we were curious about what, if anything, the real estate industry might have to do with this situation. So we embarked on a three-year effort. We sent out 25 testers, 86 tests were actually counted. We did over 100. We tested 93 agents, collected 5,700 listings. And what we found is that African Americans received most of the discrimination — or evidence of discrimination — 49% of the times they went out and did the test, compared to their white counterparts. Hispanics suffered 39%. In Asians, 19%.”

By "paired testing," you had two different people go to the same real estate agent — one of them was white. One of them was a minority. How did this work? 

Keith Herbert: "That's correct. They were similar in background in every way. Same age cohort. We gave them profiles so that the information that an agent might ask about — such as income, what their earnings were, how much money they had in the bank, what their money for the down payment was. All these things were extremely similar. Most of the time, we gave the minority even more financial wherewithal."

Did your investigation find out that not much has improved since fair housing laws went into place? 

Keith Herbert: "Based on the reaction that we've gotten, particularly from people of color ... the reaction is kind of, ‘Tell us something we don't know.’ Everyone knows this goes on. The funny thing that they're talking about — that a lot of people don't consider — is that imagine what your housing search is like if the realtor that you're going to is not showing you the best properties. Or not showing you all the homes that your dollar can afford. Your housing search is going to be stretched out, and therefore more expensive, and a lot more frustrating. So those are all very common themes.”

"Imagine what your housing search is like if the realtor that you're going to is not showing you the best properties. ... Your housing search is going to be stretched out, and therefore more expensive, and a lot more frustrating."

Keith Herbert

As a tester for the Newsday series, when you went out and spoke with the real estate agents, did you feel you were being treated equally?

Johnnie Mae Alston: “I surely did. I thought they went above and beyond. … They were so friendly and they were like giving me a 101 on homebuying. And telling me what I needed to look for as far as my paperwork and things like that. And they were very friendly, smiling. I mean, I would have never suspected a thing.”

You were shown transcripts of how the realtors had dealt with your white counterpart. Did you find differences? 

Johnnie Mae Alston: “Yes. I was really in a state of shock ... because, you know, I never realized that she was actually getting treated differently. I thought we were the same. But once I found out, I was a little bit shocked about that. You know, and it wasn't a good feeling."

How did it make you feel?

Johnnie Mae Alston: "I really felt bad. It makes you feel like you want to cry, because you don't really think about that people aren't giving you good service. You really feel like they really care. And that was the most painful thing, I think. That, you know, they're smiling in your face, and shaking your hands, and trying to make you feel comfortable. And yet they're doing a double take with someone else."

"It makes you feel like you want to cry, because you don't really think about that people aren't giving you good service. You really feel like they really care. And that was the most painful thing."

Johnnie Mae Alston

Is housing discrimination something you feel like you've experienced?

Rick, from Hudson, Florida: “Actually, yes, and I'm a veteran, and it's very troubling. My wife and I went through three different real estate companies before we actually settled on one that would willingly show us what we were looking for. I wanted to buy a home on a golf course. I was preapproved, but we were continually steered towards neighborhoods that were either close by a golf course, instead of on it, or just omitted what we wanted altogether, thinking that we would just like the house if we saw it. I really didn't take into account that it might have been discrimination until the third agent. When this one just absolutely would not show us homes in the subdivision we were looking in. Saying that those homes were either pending, or already sold, or what have you. And the fourth real estate agent actually helped us secure the home we wanted. … And we are currently living in a home in that very same subdivision, currently. And it's just troubling. I thought this might have been a one-off. But to hear this program, yes, I think something needs to be done nationally. This is a problem.”

"I thought this might have been a one-off. But to hear this program, yes, I think something needs to be done nationally. This is a problem.”

Caller Rick, from Hudson, Florida

What is your experience with housing discrimination?

Aaron, from Detroit, Michigan: “It was not me personally, my brother. But before I say that, I wanted to say that the most surprising thing to me is that we keep acting surprised about discrimination. It has been consistent, ever since the end of the Civil War. Ever since the so-called reconstruction, blacks have been discriminated against in every sector of our society: schooling, housing, whatever. I don't know why we keep acting surprised as if it has changed. The only thing that has changed is it's had to become more subtle, because the outright and blatant discrimination that once was OK is now looked at in an embarrassing way.

"But my brother was a store owner, he owned two successful party stores in Detroit. He had several rental properties, two apartment buildings. He was doing very well. And he was looking for a home in the suburbs of Detroit. He wanted to move in Bloomfield or West Bloomfield, and he ran into all kinds of discrimination … the way the researchers were just saying, on your program, where he was being shown stuff in areas that he wasn't interested in. And he was being told these very feeble reasons why he couldn't be shown certain stuff, or why he wouldn't be able to purchase certain properties in certain areas. Until he finally had to go to a minority or an Arab realtor to be shown properties in the cities that he was interested in."

Was your brother eventually able to buy a house in a neighborhood that he wanted to be in?

Aaron, from Detroit, Michigan: “He settled for one in Farmington Hills. But he really wanted to be in Bloomfield, or West Bloomfield, or in Birmingham. And he was not able. He just got tired of fighting against the grain, and finally settled for Farmington Hills.”

"The only thing that has changed is it's had to become more subtle. Because the outright and blatant discrimination that once was OK is now looked at in an embarrassing way."

Caller Aaron, from Detroit, Michigan

On a realtor perspective to housing discrimination

Heather, from Detroit, Michigan: “First of all, it's totally reprehensible. Fair housing laws are housing law. We have strict codes of ethics here. We do a lot of self-regulating. Having said that, there are unethical people, I think, in all industries, if I might be so bold. Yes, there are realtors that I choose not to work with. I just want to throw this out there. One of the things — and I'm trying to choose my words carefully. I love working in Detroit. I'm based out of the northwest suburbs, which tend to be a wealthier area. I love working in Detroit. I love working with first time homebuyers. I love working with veterans. One of my greatest challenges, as an individual in a small business, is that very often, not always, but very often the programs are associated with those demographics, and the price point of those homes don't allow us to make a living. If it were up to me, I'd sell 50 $10,000 houses a week in Detroit, and get people into homes. But I just simply cannot afford to run my business on that."

Do you mean the conditions are so small — because the house prices are so small, relative to the rest of the country — that you try to focus on selling more expensive homes?

Heather, from Detroit, Michigan: “Well, it's a matter of necessity. And I've gotten to a point now where I have to parcel out my business and only take on so many buyers a month in certain areas. I’m completely transparent. I don't 'red line,' I don't 'steer.' That's reprehensible. It's totally, completely uncalled for. It just breaks my heart to even hear about that. But from a national standpoint, or even broken down into regions, it might be time to revisit how the commission structure works. We practice contract law with some of the largest assets people ever own, and our licensing, and procedure, and process is not nearly as strict as it should be. It's not regulated. We don't have uniform codes. It's kind of ridiculous.”

Newsday: "Long Island Divided" — "In one of the most concentrated investigations of discrimination by real estate agents in the half century since enactment of America’s landmark fair housing law, Newsday found evidence of widespread separate and unequal treatment of minority potential homebuyers and minority communities on Long Island.

"The three-year probe strongly indicates that house hunting in one of the nation’s most segregated suburbs poses substantial risks of discrimination, with black buyers chancing disadvantages almost half the time they enlist brokers.

"Additionally, the investigation reveals that Long Island’s dominant residential brokering firms help solidify racial separations. They frequently directed white customers toward areas with the highest white representations and minority buyers to more integrated neighborhoods.

"They also avoided business in communities with overwhelmingly minority populations."

Reveal: "Kept Out: For people of color, banks are shutting the door to homeownership" — "Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at rates far higher than their white counterparts.

"This modern-day redlining persisted in 61 metro areas even when controlling for applicants’ income, loan amount and neighborhood, according to a mountain of Home Mortgage Disclosure Act records analyzed by Reveal from The Center for Investigative Reporting.

"The yearlong analysis, based on 31 million records, relied on techniques used by leading academics, the Federal Reserve and Department of Justice to identify lending disparities."

New York Times: "What Happens When Black People Search for Suburban Homes" — "One Long Island real estate agent told a black man that houses in a predominantly white neighborhood were too expensive for his budget. But the same agent showed houses in the same neighborhood to a white man with the same amount of money to spend.

"Another real estate agent warned a white home buyer about gang violence in a mostly minority neighborhood, but she appeared to steer a black buyer with a comparable budget toward homes in that neighborhood.

"All told, real estate agents treated people of color unequally 40 percent of the time compared with white people when they searched for homes on Long Island, one of the most racially segregated suburbs in the United States.

"Those were among the findings of a three-year undercover investigation published this past weekend by Newsday, a Long Island newspaper, which exposed widespread evidence that discriminatory, and potentially illegal, home-selling practices are helping to keep the area’s neighborhoods segregated."