BOX 1-1 Overview of the Fair Housing
Act
The 1968 Fair Housing Act prohibits discrimination in
housing on the basis of five protected classes: race,
color, religion, sex, and national origin. The act was
amended in 1988 to expand the protected classes to include
familial status and handicap. Individual jurisdictions may
add to but may not subtract from the seven federally
protected classes.
U.S. Code Title 42, Chapter 45, states the provisions of
the Fair Housing Act. With the exception of exempted
units, it is unlawful to engage in “discriminatory
housing practices” in the sale or rental of a
housing unit. The code outlines prohibited practices,
which include refusing to sell or rent a unit and offering
different terms or conditions on the basis of any
protected class.
Section 3603 of the code allows for certain exemptions.
One is for the lease or sale of a single-family house by
the owner if that individual owns no more than three
single-family houses. Additional provisions obtain,
including that the house must be sold or rented without
using a real estate agent or advertisement in violation of
fair housing codes. Also exempted are units in living
quarters occupied by the owner, provided no more than four
families reside in the dwelling independently.
Section 3604 sets forth practices prohibited under the
Fair Housing Act. Among these practices are the following:
Refusing to sell or rent after a bona fide
offer has been made
Offering different terms, conditions, or
privileges related to the unit
Indicating preferences, limitations, or
discrimination in advertisements
Misrepresenting a unit's availability
Refusing to permit a person with a
disability to make “reasonable
modifications” to the unit at the
person's own expense
One or more of the seven protected classes cannot be a
factor in the outcome of the housing transaction.
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HUD and the Urban Institute (which is conducting the survey), as well
as experts in the salient methodological and substantive areas. Formal
recommendations were not developed because the discussion of these
issues constituted the review required by HUD. This report provides a
summary of the workshop discussions.
In addition to informing HUD's plans for the HDS, the workshop served
as preparation for an upcoming NRC project on methods for assessing
discrimination. This study will address broader methodological
approaches for defining and measuring discrimination, incorporating
what has been learned from the housing field and audit studies. It
will examine the range of methods in current use and produce
recommendations regarding those which most reliably differentiate
discrimination from other differences. Both projects are part of a
larger body of DBASSE reports on subjects related to the achievement
of equal opportunity. 1
THE HOUSING DISCRIMINATION SURVEY
The HDS is being conducted in three phases. The first phase, which
began in 2000, involved an initial set of 20 metropolitan areas and
as many as 6,000 matched-pair audits. The initial 20 sites allowed
for over-time comparisons with the results of the earlier two
surveys. An important aspect of the design is the determination of
an “optimum” selection of an additional 40 sites to
generate a valid national estimate of discrimination against
specific minority groups (African Americans, Hispanics, Asians, and
American Indians). As noted, the survey is being conducted by the
Urban Institute, which also carried out the two previous
discrimination surveys. A detailed description of the three phases
of the HDS is provided in Chapter 2.
The HDS is using matched-pair audits to investigate housing
discrimination, building on HUD's 20-year reliance on this
methodology. In these
1 A Common Destiny: Blacks and American Society
(1989); Measuring Poverty: A New Approach (1995); Title I
Testing and Assessment: Challenging Standards for Disadvantaged
Children (1996); Effects of Welfare on the Family and
Reproductive Behavior (1998); Racial and Ethnic Differences
in the Health of Older Americans (1997); Demographic and
Economic Impacts of Immigration (1997); Health and Adjustment
of Immigrant Children and Families (1998); Improving
Schooling for Language-Minority Children (1998); Improving
the Future of U.S. Cities Through Improved Metropolitan Area
Governance (1999); and America Becoming: Racial Trends and
Their Consequences (2001).
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audits, pairs of individuals are matched for “all”
relevant characteristics other than those that are expected to lead to
discrimination. If there are significant differences in the way
members of the pairs are treated in the test setting, the matched-pair
audit methodology attributes these differences to discrimination. The
strengths and limitations of this approach are discussed in detail in
Chapter 2.
HUD's goal is to develop statistically valid measures of the extent of
racial and ethnic discrimination throughout a sample of American
housing markets. The agency plans to use the results of the study to
target future enforcement efforts more effectively, to direct
legislative action needed to reduce discrimination, and to create
“report cards” for the nation and for the communities
studied that can be used to measure progress toward the goal of
greater social integration.
KEY ISSUES DISCUSSED AT THE WORKSHOP
The major objective of the HDS is to measure the incidence of
racial discrimination in the national housing market. The audit
methodology and sampling frame applied to study discrimination
against minorities in urban housing markets raise several key
issues. The workshop discussions addressed these issues from both a
methodological and substantive perspective.
Prior housing discrimination studies have focused on discrimination
against African American and Hispanic households, whereas HDS 2000
extends the minority groups studied to include Asian Americans and
American Indians. Consequently, an additional goal of the workshop
was to address conceptual, methodological, and sociological issues
related to measuring housing discrimination against these minority
groups. Participants were also asked to address the application of
the current audit methodology and sampling frame to studying
subpopulations within the Asian community, as well as
concentrations of American Indian groups in rural communities.
Including these “underserved” populations raises
additional measurement issues with regard to the study design, and
the workshop discussions addressed these issues as well. 2
Differential treatment of minority and white home seekers in a hous
2Underserved populations or
communities are those that have not previously been included in the
HDS sampling frame, because of either their racial composition or
their size.
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ing market transaction does not necessarily mean that racial
discrimination has occurred. The purpose of paired testing is to
provide an objective means of determining whether differential
treatment during a housing transaction is due to the race of the
applicant. Since “all” household and housing unit factors
other than race are controlled, racial discrimination is assumed to be
the reason if differential treatment occurs. 3 This conclusion is based on the definition
of racial discrimination as “the unequal treatment of equals on
the basis of race” (Fix et al., 1993). The audit test also seeks
to establish a realistic point of entry into the housing market and to
control for various observable factors. Of course, the methodology
does not control for all factors and is based on some untested
assumptions. Housing market transactions, for example, involve both
random and systematic factors. Characteristics or behaviors of the
auditors or housing agents, among other factors, may affect the audit
results. These random factors are not controlled for by the
methodology and thus may not be observable by the audit researchers.
Past research addressing both systematic and random factors involved
in housing transactions has led to the development of four measures of
unequal or disparate treatment: (1) discriminatory inclination, (2)
gross unfavorable treatment, (3) systematic unfavorable treatment, and
(4) net market effects (Fix et al., 1993). The discussions at the
workshop focused on two of these measur—gross unfavorable
treatment and net market effect. Since these two measures mean
different things depending on how the population of interest is
defined, and since all estimates of housing discrimination are based
on numerous audits, two other key issues were discussed: the
appropriateness of weighting the audit results and the need for a
clear definition of the population of interest.
HUD officials and researchers are currently weighting the results of
audits performed on advertisements sampled from major metropolitan
newspapers to obtain a more accurate estimate of discrimination in the
housing market. Yet the appropriateness of this weighting scheme is
contingent on the definition of the population of interest. The
sampling frame may not reflect the entire housing market, but rather
those housing units that are advertised in major metropolitan
newspapers. This issue is most
3The characteristics controlled for include all legitimate
reasons a minority applicant might receive treatment different from
that of a majority or white applicant, as well as other illegitimate
or illegal reasons for denial (such as familial status).
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salient when one considers that majority and minority home seekers may
face a dual housing market; the sources used for seeking a housing
unit may also differ by race. The design of the sampling frame should
ideally reflect these differences.
REPORT ORGANIZATION
The workshop was organized into three sessions addressing the
following topics: (1) the purpose of and key policy and
methodological issues related to the HDS, (2) preparations for
Phase II of the HDS audit— auditing of discrimination in
underserved urban communities and implications of the preceding
methodological discussion for the Phase II design plan, and (3) the
HUD and other methodologies for measuring discrimination. This
report is structured to reflect the key issues raised on each of
these topics and their relevance to the objectives of the workshop.
Chapter 2 presents an overview of the 2000
HDS, including its objectives and design. This chapter also reviews
the testing methodology, with emphasis on its application to the
detection of housing discrimination. Included is a summary of the
workshop discussion on the advantages and disadvantages of paired
testing, as well as methodological concerns regarding its use to
identify discrimination in housing markets. Chapter 3 summarizes the workshop discussion on
clearly defining or identifying the population of interest, in
particular on whether the current HDS sampling methodology and
study design do, in fact, capture the population about which
inferences are drawn by researchers. Chapter
4 presents highlights of the discussion on defining housing
discrimination and on the important distinction between disparate
impact discrimination and disparate treatment discrimination. Chapter 5 summarizes the discussion of how to
model and define housing discrimination. Finally, Chapter 6 addresses special concerns related to
applying the audit study design to underserved populations,
particularly Asian Americans and American Indians and those living
in small metropolitan areas. In addition, three appendices are
provided: Appendix A is a paper prepared
for the workshop that gives a detailed description of the HDS;
Appendix B is a second paper addressing
some methodological issues associated with the HDS audit in a
framework that is in some ways richer than that which has spawned
the paired-testing methodology; and Appendix
C contains the workshop agenda and a list of the workshop
participants.
Representative terms from entire chapter:
fair housing
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