Steering in real estate refers to the practice of leading buyers towards or away from certain neighbourhoods based on their identity. It’s an illegal practice that discriminates against buyers based on their race, colour, religion, or ethnicity.
Although real estate agents are entrusted with assisting buyers in finding their ideal homes, many agents consciously or unconsciously manipulate housing choices and limit access to housing opportunities.
Steering can manifest in various forms, including subtly steering buyers towards neighbourhoods with a majority population that matches their identity or discouraging them from exploring diverse areas.
Such actions not only infringe upon the rights of potential buyers but also contribute to the continuation of segregation and limited social interaction between different communities.
Let’s discuss in detail what steering is in real estate and how it can subtly influence buyers’ housing choices.
What is Steering in Real Estate?
Steering in real estate refers to the discriminatory practice of guiding or directing potential buyers towards or away from specific neighbourhoods based on their protected characteristics.
For instance, a real estate agent may steer a buyer away from a diverse neighbourhood by providing negative information about the area or showing them fewer properties there. Conversely, they might guide buyers towards communities where the majority share their racial or ethnic background.
More Examples
Let’s give you a few more instances which demonstrate how real estate steering is practised around the country:
- A real estate agent shows a family of Asian descent only properties located in neighbourhoods predominantly populated by people of Asian ethnicity, assuming they would prefer to live in such areas.
- An agent provides misleading information about the crime rates in a diverse neighbourhood to discourage a Hispanic couple from considering it a potential location for their new home.
- Sometimes agent avoids showing properties in neighbourhoods with a significant African American population to young couples, assuming they prefer predominantly white neighbourhoods.
- A real estate agent might selectively present properties in upscale neighbourhoods to a wealthy Middle Eastern individual, assuming they would be more interested in exclusive and high-end communities.
- A real estate agent uses coded language or subtle hints to steer a same-sex couple towards neighbourhoods known for being LGBTQ+-friendly, assuming they would feel more comfortable living in those areas rather than offering a full range of options.
Historical Perspective of Steering in the U.S.
In the United States, the history of steering traces back to the era of racial segregation and discriminatory housing practices. During the mid-20th century, policies such as redlining and restrictive covenants were used to deny minority communities access to specific neighbourhoods, exacerbating racial and socioeconomic disparities.
The Fair Housing Act of 1968 was aimed to combat steering and other discriminatory practices by prohibiting discrimination in housing based on race, colour, religion, sex, and national origin, and later expanded to include additional protected classes.
What are the legal implications of Steering?
Real estate steering carries significant legal implications due to its discriminatory nature. By engaging in steering practices, real estate professionals violate fair housing laws and regulations designed to protect individuals from discrimination in housing.
Under fair housing laws, such as the Fair Housing Act in the United States, real estate professionals who engage in steering can face serious legal consequences.
This includes potential lawsuits, fines, loss of licensure, and reputational damage. Legal action can be initiated by individuals who have experienced steering and by government agencies responsible for enforcing fair housing regulations.
Moreover, real estate firms and brokerages that allow or facilitate steering practices can also be held legally accountable.
How Does Steering Impact Potential Buyers?
Steering practices can impact buyers, which can have significant and far-reaching consequences. Here are some key impacts to consider:
Limited Housing Options
Steering restricts potential buyers’ housing options by channelling them towards or away from specific neighbourhoods. This can lead to a narrower range of choices and limit their ability to explore diverse communities that may align with their preferences or needs.
Unequal Access to Opportunities
Steering people based on their protected characteristics, such as race or ethnicity, perpetuates unequal access to housing opportunities. It denies individuals the chance to consider a wide range of neighbourhoods and potentially hinders their ability to access resources, amenities, and quality schools available in different areas.
Reinforcement of Segregations
There’s a reason why there are homogenous communities spread across the country. Steering contributes to the persistence of residential segregation. Directing buyers towards areas with populations that mirror their own identity or steering them away from diverse areas reinforces the separation of communities based on race, ethnicity, or other protected characteristics. This undermines efforts to foster inclusive and integrated communities.
Socioeconomic Disparities
Steering can contribute to socioeconomic disparities among different communities. By guiding potential buyers away from specific areas, it can perpetuate disparities in wealth, resources, and opportunities, further exacerbating existing socioeconomic inequalities.
What to do if you experience Steering?
So what steps can you take if you’re a buyer and at the receiving end of this discriminatory behaviour? Here are some key measures you can adopt to protect your rights
- Educate Yourself: Familiarize yourself with fair housing laws and regulations to understand your rights and protections against discrimination in housing.
- Document Instances: Keep detailed records of any instances where you suspect steering has occurred. Note dates, times, locations, individuals involved, and any evidence that supports your claim.
- Consult with an Attorney: Seek advice from a qualified attorney specializing in fair housing or discrimination cases. They can provide guidance on your legal options and help you navigate the process.
- File a Complaint: Report the incident to the appropriate authorities, such as local fair housing agencies, state human rights commissions, or the U.S. Department of Housing and Urban Development (HUD). Provide them with the documented evidence you have collected.
- Seek Support: Reach out to advocacy groups, fair housing organizations, or community organizations that can provide guidance, resources, and support during this process.
- Preserve Your Options: If feasible, continue your property search and consider working with a different real estate professional or agency that respects fair housing principles and provides equal access to housing options.
The Bottom Line
Now that you understand what steering is in real estate and how to steer clear of such practices, whether you’re an agent or a buyer.
It’s essential to address and combat real estate steering to ensure fair and equitable access to housing opportunities for all individuals, regardless of race, colour, or other characteristics.
Real estate professionals must uphold fair housing laws and treat all clients with respect, professionalism, and without bias.
By prioritizing fairness, you not only comply with the law but also contribute to creating a more equitable real estate industry that serves clients impartially and fosters inclusive communities.
Last modified: May 31, 2023
