Despite law, race issues sometimes arise in home sales.

Real estate agents in Los Angeles and nationwide continue to steer buyers to neighborhoods by race despite strict state and federal statutes preventing the practice, according to a new study.

Even with tougher legislation and increased training, "racial steering" is on the rise, according to Wayne State University professor George Galster and New York University doctoral candidate Erin Godfrey, who published "By Words and Deeds" in the summer issue of the Journal of American Planning Association.

Using 2000 data collected by the U.S. Department of Housing and Urban Development, the five-year research project found that between 12 percent and 15 percent of real estate agents steer white homebuyers away from diverse neighborhoods and lead black and Hispanic homebuyers to lower-income areas.

In several examples, real estate agents in the report told subjects posing as buyers that they were knowingly breaking the law by telling clients about the racial makeup of a neighborhood.

One unidentified L.A. real estate agent told a posing couple the area surrounding a home had "a lot of Latinos living there ... I'm not supposed to tell you that, but you have a daughter and I like you."

Galster said real estate agents don't worry about the repercussions from making such comments, even though they could lose their license and face civil lawsuits. He said federal, state and local agencies rarely send out test buyers to crack down on the practice and outside civil rights organizations are focused on protecting access for rental housing.

"It's clear there are real estate agents breaking the law," Galster said. "Training has its limits. There has to be a stick of enforcement ... with a carrot of education."

'Generally compliance'

June Barlow, general council for the California Association of Realtors, said the state's Realtors go through extensive training every four years on complying with the federal Fair Housing Act, and that the training has significantly reduced incidents of racial steering.

"We don't hear that much about it because we believe there is generally compliance," said Barlow, who noted that in her 25 years at the association she has seen only one lawsuit regarding steering. "Frankly, I think we'd see more lawsuits if there was racial discrimination going on. They are very unusual cases."

To determine the level of steering that could occur in the marketplace, HUD sent white, black and Latino couples posing as interested buyers to inquire with agents about homes advertised in local newspapers or "any similar properties" without preference to neighborhood.

The testers were given similar financial characteristics that made them equal candidates to buy a given home. Testers were closely matched in terms of gender, employment, education and family size.

In Los Angeles, HUD sent 69 pairs of white and black testers and 69 pairs of white and Latino testers to inquire about various advertisements by real estate agents. Galster said budget constraints prevented HUD from creating a third pair of black and Latino testers.

Galster said the study didn't have a large enough sample size to determine where racial steering was more common. "I can't say whether L.A is better or worse," he said. "I can certainly say steering was present in L.A. There wasn't a national average that L.A. escaped from."

The study found that most real estate agents who were racially steering clients did so by making comments about a particular neighborhood and the makeup of its residents.

Predominantly, the comments were made to white homebuyers, who are statistically less likely to file complaints, the study found. When agents made comments, 70 percent referenced the racial mix of a neighborhood.

Most of the comments were neutral. In one sample quoted in the study, an L.A. real estate agent told a couple, "If it's a mixed neighborhood, that's all right. But you want to make sure it's mixed; you don't want to be the only white person there."

Positive and negative

While 12 percent of the comments positively mentioned the racial diversity of a particular neighborhood, 13 percent mentioned it negatively.

Though examples of positive comments weren't included in the report, one L.A. agent recommended against a couple buying a house in a particular neighborhood because "that area is full of Hispanics and blacks that don't know how to keep clean."

Black and Latino buyers were shown homes in predominantly white neighborhoods, but white couples were not shown homes in more diverse neighborhoods, even though there were similar homes in those areas.

"The white family wouldn't know those neighborhoods have been left out," Galster said. "They're not a minority couple but they have been discriminated against."

Galster said real estate agents regularly took black and Latino buyers to look at homes in white neighborhoods, but steered them to other areas with comments. "It's not like the door was completely shut on all white neighborhoods," he said. "That probably would have resulted in lawsuits."

Making a Statement

Real estate agents mostly made "neutral"
comments about the ethnicity of a particular
neighborhood.

Types of                Percentage of
Commentary                Comments

Racial Mix (Neutral)         45
Racial Mix (Negative)        13
Racial Mix (Positive)        12
Schools Noted                 5
Other (negative)             19
Other (positive)              6

Source: "By Words and Deeds," by George Galster and Erin Godfrey