In the United States everyone is entitled to purchase a home who is gainfully employed and has adequate income, credit, and debt-to-income ratios to qualify under the Fair Housing Act. However, discrimination and ownership disparity still occurs and exists between white and black households as per an article by The National Association of Realtors back on March 3. Here is a link to the article, which explains in greater depth the housing disparity among white and minority groups: https://www.nar.realtor/blogs/economists-outlook/racial-disparities-in-homeownership-rates
According to the article, Black homeownership has increased to 43.3% but is still lower than it was 10 years ago. Moreover, Hispanic and Asian households have increased their holdings drastically over the last decade through 2020.
Banks have been a sore spot for fair housing laws through the Department of Housing and Urban Development Administration. Some lenders have and, in some instances, continue to discriminate today against minority populations, even though their qualifications are as good as their white counterparts’. Very substantial fines have been levied if a defendant has been convicted of discriminatory practices. Everyone must be treated fairly regardless of their legal status.
There are 18 protected classes and they are as follows:
2.) Alienage/Citizenship Status
5.) Familial Status
6.) Gender Identity/Expression
8.) Lawful Occupation
9.) Lawful Source of Income
10.) Marital Status
11.) Military Status
12.) National Origin
13.) Partnership Status
17.) Sexual Orientation
18.) Status as a Victim of Domestic Violence
Renting appears to be a slippery slope for many prospective tenants and landlords, however. This is due to discrimination and a lack of awareness, consideration, and knowledge about the legally protected classes in Fair Housing laws. Here is a link for tenants and landlords to gain greater knowledge of those classes: https://www.avail.co/education/guides/fair-housing-laws/fair-housing-protected-classes
In 2022, a HUD memo said the use of criminal records in screening and blanket housing denials across the board will not be considered an acceptable practice. But there are a few exceptions based on time elapsed since time served and the type of conviction. Also, based on the Fair Housing Amendment Act of 1988, if a qualified prospective tenant has a disability and reasonable accommodations and modifications are required, then denying a person a rental is against fair housing. Here is another link expanding on the law:
There are occasions when an applicant has a voucher from social services. If the amount that is provided satisfies the rent (sometimes it must include utilities to qualify), then the tenant cannot be rejected in New York State. However, this can vary from state to state predicated on the state and local laws. In NYS if the landlord resides in one of the units, he or she can reject the voucher applicant. The government unequivocally guarantees the monthly rent while a regular tenant can never provide this guarantee. Then why would landlords feel uncomfortable with providing the necessary rentals that are so desperately needed and in high demand over the last few years?
Discrimination and maybe sometimes fear and a non-caring attitude are the only reasons I can surmise. A contributing factor to the serious problem is the pandemic and the previous economic slowdown, losses and layoffs that have followed in some sectors of the economy. Due to the severe lack of rentals, there is a greater possibility for the situation to get worse in 2023.
More people are in need of greater assistance and are seeking out government help. Their voucher enables them to afford the rental price that is being asked. The final approval is completed when social services have to inspect the unit to make sure it qualifies, that everything functions properly, and that there are fire and smoke detectors installed. Lastly, commissions are paid to the brokers by social services, so there is no cost to the landlord.
Brokers and agents are required to take 3.5 hours of Fair Housing continuing education prior to their license renewal. I have done a few voucher rentals in the past, and the individuals and families were fine respectable people. Landlords should not be afraid to provide their rentals to those in need, as they will always receive their money electronically on a very timely basis through the state or federal government. They tend to be longer-term tenants as compared with those who use a rental as a short-term stopping-off point prior to purchasing. This gives landlords more consistent cash flow. However, here is a link to define situations that allows landlords to reject an applicant: https://www.avail.co/education/guides/fair-housing-laws/valid-reasons-to-reject-applicants
Fair Housing is an extremely complicated and concerning issue today and cannot be totally explained here in this short column. One must use common sense and be as pragmatic as possible in determining the qualifications of a tenant and learn as much as possible via the links that I have provided. Lastly, asking for the advice of a very knowledgeable broker or your attorney will be your best bet in keeping within the Fair Housing Laws.
I want to wish all my readers a healthy, happy, and relaxing Chanukah and holiday season.
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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S) as well as the new “Green Industry” Certification for eco-friendly construction and upgrades. For a “FREE” 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.