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CHANGES IN THE NATURE OF HOUSING DISCRIMINATION AND IMPLICATIONS FOR THE AUDIT DESIGN

One participant expressed concern that the paired-testing methodology generally focuses on racially differential treatment at the pre-application stage of housing market transactions. Yet testing and enforcement data from some fair housing agencies suggest that minority home seekers are also vulnerable to discrimination in the form of different terms and conditions after their application has been submitted for review. Consequently, audit results will yield an estimate of discrimination for a portion of housing market transactions, but may not provide the benchmark that HUD desires—changes in the nature of discrimination over time. The number of incidents of discrimination may decline not because discrimination has decreased, but because it has shifted to another stage of the housing transaction. If this is the case, the current audit protocol will underestimate racial discrimination.

Representatives from HUD and the Urban Institute acknowledged that the nature of housing discrimination may be changing. The question they face is how to measure post-application discrimination, since auditors do not submit applications. While auditors involved in sales testing make multiple visits in order to appear as serious buyers and to view multiple properties, they do not make offers on any of the units they see. The paired-testing methodology is probably not the solution for addressing this issue, and the researchers asked for suggestions for alternative methods that could be used to capture this phenomenon.

It was also noted that in many housing markets, real estate agents are now asking individuals to sign up with a buyer's broker before viewing any housing units. This practice poses an additional challenge for the audit structure. First, since auditors may be involved in multiple tests, the practice can increase the likelihood of their being detected. Also, researchers believe the influence of the buyer's broker is more important in some housing markets than in others. Through auditor reports, they collect information on whether minority auditors are required to sign such an agreement while white auditors are not. Racial differences in these requirements may represent discrimination.



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