American Apartheid: Segregation Persists In Housing, Study Says

• Originally published in The Washington Post April 6, 2005 Copyright 2005 The Washington Post

By  Kirstin Downey, Washington Post Staff Writer

Racial segregation and discrimination in housing remain persistent problems in the United States, according to the National Fair Housing Alliance, an advocacy group. The alliance said yesterday that minority homeowners continue to be steered to minority-dominated neighborhoods where real estate does not appreciate as quickly as in majority white neighborhoods.

Housing discrimination complaints to state, federal and nonprofit agencies rose 8.6 percent in the past year, climbing to 27,319 in 2004 from 25,148 in 2003, according to the group.

"Some commentators say integration has failed," said Shanna L. Smith, president and chief executive of the Washington-based alliance. "I say integration has yet to happen."

Housing discrimination is also the focus of a spate of recent legislative initiatives concerning real estate lending practices that some say have hurt minority homeowners. Critics charge that while lenders once denied loans to minorities, they now reap large profits by pushing these borrowers into costly loans with high interest rates, prepayment penalties and big balloon payments, leaving people heavily burdened with debt. Bankers say that higher interest rates compensate for the risk of lending to people who have bad credit.

New mortgage lending figures released this week are expected to clarify whether there are discrepancies between the loan rates being offered to white and to minority home buyers. The federally required information is being released institution by institution, making comprehensive comparisons difficult until September, when federal regulators will release an annual aggregate report. The data will not, however, include credit score information, which many observers view as key in interpreting the statistics.

Two competing bills under consideration on Capitol Hill aim to rein in what many view as lending abuses. One measure, co-sponsored by Reps. Robert W. Ney (R-Ohio) and Paul E. Kanjorski (D-Pa.), would preempt state and local regulations governing predatory lending but would seek to set some national curbs on what Ney has called "abusive, deceptive and unfair mortgage lending practices."

A competing bill, co-sponsored by Democratic Reps. Brad Miller and Melvin Watt, both of North Carolina, and Barney Frank (Mass.), sets more stringent rules. It is modeled on North Carolina's state law, which has been copied by New York, New Mexico, Illinois and New Jersey.

At a news conference yesterday, the National Fair Housing Alliance said recent court cases have highlighted the prevalence of bias.

In October, U.S. District Judge Michael J. Davis in Minneapolis decided a $1 million judgment against a landlord who black tenants alleged had pushed them out to replace them with white tenants.

"We should have been able to stay where we were," said Eboni SternJohn, a landscape manager and litigant in the case.

The Arizona attorney general filed a complaint on behalf of a black surgeon from California who offered to buy some scenic land in Sedona, Ariz., for $470,000 in April 2004, only to see the property withdrawn from the market, allegedly because the owner did not want to sell it to a black buyer.

"Usually in large transactions, the only color people see is green," said the surgeon, Philip Edington. He said he felt "dismay" when the property, one of the few with that kind of view, was made unavailable to him because he is black.

The advocacy group also unveiled an equal-opportunity advertising campaign. In one advertising spot, a landlord with an available apartment gets telephone messages from would-be renters with African American names, Asian or Arabic accents or female voices, but he picks up the telephone to discuss the unit when what sounds like a white male is on the line. In another spot, a black applicant is shown an apartment that he clearly likes and would be happy to rent, only to be told by the landlord that it has already been rented.