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2001 Insurance Study - City of Chester

2001 Rental Audit report

FHCSP Rental Audit Report 2001

An Audit of Race Discrimination in the Suburban Philadelphia Rental Market 2001
[View Chart of results]

Introduction  
Throughout the months of March 2001 through October 2001, the Fair Housing Council of Suburban Philadelphia (FHCSP) conducted an audit of discrimination in the region’s rental housing market. The purpose of this study was to determine the extent to which African American home seekers face discrimination in their search for rental housing. To our knowledge, previous to this study, there has never been a fair housing rental audit that focuses specifically on the Suburban Philadelphia area.

In 1989 the U.S. Department of Housing and Urban Development conducted a national fair housing audit know as the Housing Discrimination Study (HDS). The data for this study was collected immediately following the implementation of the Fair Housing Amendments Act of 1988. Therefore, the results of the HDS serve as a benchmark to assess the effects of the Act on the frequency of discrimination from 1988 to the present. According to the HDS, the incidence of differential treatment towards African Americans seeking rental housing in 1989 was 46%.[1]

More recently, in the spring of 1999, Douglas Massey of the University of Pennsylvania conducted an audit of race discrimination in the Philadelphia area. This audit measured the frequency of discrimination occurring on the phone when prospective tenants call to inquire about rental housing. Massey’s audit suggests that many housing providers infer the race of a caller by the sound of their voice on the phone. This study found that white callers were more likely to receive return phone calls and be offered available units than black callers, while black callers were more likely to be quoted higher fees and asked about credit history than white callers.[2]

In addition, a study of insurance discrimination and redlining in the city of Chester, conducted by FHCSP in 2001, showed that African American homeowners in Chester face discrimination in their search for homeowner’s insurance 60% of the time.

Both a casual observation of our neighborhoods and recent Census data reveals that we live in a racially segregated region. The few studies that have been done suggest that discrimination is responsible in part for this segregation. Due to the lack of data on the frequency of housing discrimination in this region, FHCSP felt that an audit of rental practices would be an important tool in understanding one of the reasons for segregation in our area and in informing the public about the continuing problem of discrimination in our communities. It is our hope that this report will serve to promote discussion in the region about housing discrimination and the detrimental effects it has on our communities, and that we can all work to combat this problem.

Fair Housing Laws  
State and federal fair housing laws exist to ensure that everyone has equal access to the housing of their choice. The main law that protects against discrimination in housing is Title VIII of the Civil Rights Act of 1968. This law is commonly referred to as the Fair housing Act, and prohibits discrimination in any type of housing related transaction on the basis of race, color, religion, national origin, and sex. In 1988, the Fair Housing Amendments Act expanded coverage to prohibit discrimination based on disability and familial status (the presence in the household of children under age 18). In addition to the federal laws, the Pennsylvania Human Relations Act prohibits discrimination based on age (40+).

The types of activities that are considered discriminatory in rental housing under the Fair Housing Act include, but are not limited to:

• Refusing to rent, sell, or negotiate for housing on the basis of a protected class
• Misrepresenting the availability of housing or making housing unavailable
• Steering or segregating housing by a protected class
• Requiring different terms or conditions for occupancy
• Imposing burdensome conditions for occupancy
• Imposing overly restrictive occupancy limits
• Refusing to allow reasonable accommodations or modifications
• Persuading owners to sell their houses by suggesting the neighborhood is racially changing (blockbusting)
• Steering to inferior mortgage or insurance products
• Advertising housing for rent or sale in a discriminatory manner
• Threatening or intimidating anyone attempting to exercise their fair housing rights

1. Summary

   The rental audit conducted in 2001 by the Fair Housing Council of Suburban Philadelphia focuses specifically on race discrimination in rental housing. This audit leaves no doubt that our region has not achieved equal access to housing, even 34 years after the passage of the Fair Housing Act. This study shows that African American home seekers that are qualified for the rental housing of their choice can expect to face discriminatory treatment in 41% of the time in the Suburban Philadelphia area. This discrimination in housing leads to reduced access to jobs, education, and transportation for the families that are discriminated against, as well as perpetuating the segregated housing patterns found in our region. Furthermore, this audit demonstrates that discriminatory practices are often quite subtle and are unlikely to be detected by an African American home seeker who does not have the benefit of comparing his or her treatment with that of a white home seeker. Rarely are African Americans told blatantly that they are being denied housing because of their race. In the 21st century, discrimination is more often practiced with a smile and a handshake.

2. Site Selection

   The rental audit consisted of 64 paired tests conducted in Chester, Delaware, Montgomery, and Bucks counties (16 tests in each of the four counties). Sites in 45 different townships were tested. To the extent possible, sites were chosen randomly to ensure the results were representative of actual market practices. In order to choose sites, ads were sampled from local newspapers (Daily Local News, The Phoenix, News of Delaware County, The Daily Times, The Main Line Times, Montgomery Newspapers, The Times Herald, The Mercury, The Intelligencer/Record, and The Bucks County Courier Times). Listings of properties for sale or rental properties listed through an apartment locator service were excluded. In addition, sites were excluded in areas that were more than 50% African American.

3. Testing Protocol

   Testing is an objective process that is used to determine if a housing provider is treating people equally, or is discriminating based on a protected class. The Supreme Court has unanimously confirmed that fair housing testers have the right to receive truthful information about available housing units and has upheld the process of testing as a legitimate way to uncover discriminatory behavior.[3] Testing involves simulating a housing search in order to observe a provider’s ordinary business practices. Two testers, one of which is a member of a protected class, and the other a control are sent to a site to inquire about housing. The testers are assigned similar personal and home seeking characteristics, so the only difference between them is their protected class status. By comparing the experiences of two testers, the test coordinator can determine if the housing provider is treating them differently.

   In the case of this audit, after an ad was selected, the test coordinator made an advance phone call to the site to verify the availability of the unit advertised. After the advance call, tester profiles were made. Testers were non-disabled, single, and did not have children. The test pairs were assigned the same desired move-in date and similar occupations and financial information, with the African American tester being slightly more qualified. The testers made contact with the housing provider by phone to arrange an appointment. During the phone call and site visit, testers gathered information about the availability of the advertised unit, availability of similar housing, rental price, security deposit, utilities, other fees, application process, and date the housing was available. The testers completed report forms that included the above information and additional information regarding questions asked by the agent, condition of the unit, etc. In addition, testers completed narratives that documented their experience on the test.

   Prior to doing audit tests, all testers completed a training course that included extensive review of the testing process as well as practice tests completed in the field. Testers were trained to report their experiences objectively and to avoid drawing conclusions about the treatment they received while on a test. Testers were not given information about the experiences of their testing counterpart.

4. Evaluation of Tests  
   After the testers completed their reports, tests were evaluated to determine if differential treatment had occurred. Tests were determined to contain differential treatment if they contained one or more of the following:
   • Misrepresentation of availability — The African American tester was told that nothing was available or told of fewer units than the white tester, or the African American tester was told of units available after their desired moving date.
   • Different terms — The African American tester was told of different price, security deposit, application process, or qualification criteria than the white tester, or the white tester was offered specials that are not offered to the African American tester.
   • Screening of phone calls — The African American tester was told that nothing was available or was not allowed to view the apartment based on the sound of their voice during the appointment call.
   • Steering — The African American tester was steered to different complexes or buildings, or discouraged from renting the unit.
   • Discriminatory statements — The housing provider made discriminatory comments regarding race to one of the testers.
   • Level of service — African American tester receives inferior service by housing provider or is subjected to more extensive questioning than white tester.
   • Application questions — The rental application requested a physical description of the applicant.
   • Follow-up contact — The white tester received follow-up contact from the housing provider by phone or mail while African American tester did not.

5. Results  
   Frequency of Differential Treatment:

   Of the 64 total tests

   • 26 (or 41%) showed differences in treatment that favored the white tester
   • 32 (or 50%) showed similar treatment
   • 6 (or 9%) were inconclusive[4]

   Of the 16 tests in Chester County

   • 6 (or 38%) showed differences in treatment that favored the white tester
   • 9 (or 56%) showed similar treatment
   • 1 (or 6%) was inconclusive

   Of the 16 tests in Delaware County

   • 8 (or 50%) showed differences in treatment that favored the white tester
   • 5 (or 31%) showed similar treatment
   • 3 (or 19%) were inconclusive

   Of the 16 tests in Montgomery County

   • 5 (or 31%) showed differences in treatment that favored the white tester
   • 10 (or 63%) showed similar treatment
   • 1 (or 6%) was inconclusive

   Of the 16 tests in Bucks County

   • 7 (or 44%) showed differences in treatment that favored the white tester
   • 8 (or 50%) showed similar treatment
   • 1 (or 6%) was inconclusive

   Types of Differential Treatment:  
   Of the 64 total tests[5]

   • Misrepresentation of availability — 10 tests (or 16%)
   • Different terms — 3 tests (or 5%)
   • Screening of phone calls — 8 tests (or 13%)
   • Steering — 7 tests (or 11%)
   • Level of service — 6 tests (or 9%)
   • Application questions — 1 test (or 2%)
   • Follow-up contact — 1 test (or 2%)

   Examples of Differential Treatment:

   Example #1: Misrepresentation of Availability & Level of Service  
   An African American tester called to inquire about one or two bedroom apartments. The tester visited the complex and met with an agent who said the tester must fill out an application before viewing any apartments. The agent said she didn’t know what apartments were available and did not show the tester any apartments. The agent said she was retired and just handed out applications and answered the telephone.

   A white tester called to inquire about one or two bedroom apartments. The tester visited the complex approximately one hour after the first tester. The tester met with the same agent that met with the African American tester and was told that there were two apartments available (one in each of two complexes). The agent told the tester that it was their normal policy to have people fill out an application before viewing apartments, but she said he “looked like a nice stable guy”, and he was shown the two apartments anyway.

   Example #2: Screening of Phone Call  
   An African American tester called to inquire about two bedroom apartments. An agent told the tester that they didn’t have anything available and didn’t know when they would.

   A white tester called to inquire about two bedroom apartments. The tester was told by the same agent that she wasn’t sure how many availabilities there would be, but invited the tester to view a sample at their sister complex. The tester visited the complex and was told by an agent that there was an apartment currently available and that more apartments may be available by June. The tester was shown a sample and was given an application and other literature about the complex.

   Example #3: Screening of Phone Call & Steering  
   An African American tester called to inquire about two bedroom apartments. An agent told the tester that they didn’t have anything available, and had a waiting list for the entire summer. The agent recommended another complex to the tester.

   A white tester called to inquire about two bedroom apartments. The tester was told by the same agent that she was expecting some vacancies for June and invited the tester to view a sample. The tester visited the complex and was told by the agent that she was not sure how many vacancies she would have, but said she would contact the tester when one became available. The tester was shown a sample and an actual apartment and was given literature about the complex.

   Example #4: Screening of Phone Call & Application Questions  
   An African American tester called to inquire about two bedroom apartments. The tester was told that she must complete an application before she would be allowed to see an apartment. The agent faxed an application to the tester that included questions about height, weight, hair color, and eye color.

   A white tester called to inquire about two bedroom apartments, and was invited to visit the complex. At the complex, the tester was told about two available apartments and was shown one of them. The tester was also given an application that included questions about height, weight, hair color, and eye color.

   Example #5: Misrepresentation of Availability & Level of Service  
   An African American tester called to set up an appointment to view one bedroom apartments. At the complex, the agent told the tester that she was unable to tell what would be available by the tester’s move in date. The agent said there was one apartment currently available, but she had three applications on it. She would not show the tester any apartments, saying she had recently had a back operation.

   A white tester called to set up an appointment to view one bedroom apartments. The tester was told there was one apartment currently available and was shown the apartment by the same agent that had met with the African American tester. The agent said she could hold the apartment until the tester was ready to move in.

   Example #6: Different Terms & Follow-up Contact  
   An African American tester called to set up an appointment to view one bedroom apartments. At the complex, the tester was told there would be a number of apartments available and was shown two actual apartments. The tester was given a brochure and an application.

   A white tester called to set up an appointment to view one bedroom apartments. At the complex, the tester was told there would be a number of apartments available and was shown two actual apartments. The tester was given a brochure and an application. The tester was told about a special where he could receive ½ off his rent, and an additional $100 if he signed a lease that day. The tester received a follow up letter in the mail.

The terrorist events of September 11th occurred during the middle of this audit study. Sadly, the percentage of landlords who discriminated on the basis of race after the tragedy of September 11th was exactly the same percentage as those who discriminated prior to September 11th.

As the results of this audit indicate, the fair housing needs of African Americans in the Counties are significant, as housing discrimination remains pervasive throughout Greater Philadelphia. With 46 years of experience testing, investigating, and enforcing compliance with the Fair Housing Act, FHCSP is recognized as a regional leader in providing quality services that meet these needs. Based upon the findings of this audit, FHCSP makes the following recommendations:

• The sophisticated methods developed by some apartment owners and managers in Suburban Philadelphia to discourage African Americans from renting are of such a subtle nature that detecting them without paired testing by a qualified fair housing organization is virtually impossible. The FHCSP’s testing and enforcement initiatives must be expanded in order to address the extremely high level of housing discrimination that still exists in the region. Further systemic testing should be undertaken to determine the frequency of discrimination experienced by members of other protected classes such as families with children and people with disabilities.

• There is a discernible need for extensive outreach and education programs for consumers to inform them how to detect the subtle methods that landlords employ to deny them the housing of their choice.

• Most of the apartment owners/managers who treated African Americans testers differently than white testers in this audit appear to be in violation of the Pennsylvania Real Estate Commission’s licensure requirements. The Pennsylvania Real Estate Commission should strictly enforce its requirement that all persons involved in the rental of housing in Pennsylvania become licensed and be required to participate in Mandatory Continuing Education about fair housing.

• The U. S. Department of Housing and Urban Development and the Pennsylvania Human Relations Commission must continue to vigorously enforce fair housing law, and must be allocated adequate resources to effectively carry out their mandates.

• Partnerships between housing industry affiliates, government enforcement agencies and private fair housing groups must continue to be developed and expanded to ensure that those who deplore housing discrimination combine their resources to more effectively address this problem.

• Settlements and verdicts resulting from the adjudication of housing discrimination complaints need to receive greater media coverage in order to deter others from engaging in housing discrimination.

• Housing Counselors, social service agencies and organizations whose constituents are members of the protected classes must be trained to recognize housing discrimination and know where to turn when their clients encounter it.

• A media campaign to educate both consumers about their rights, and the housing industry about its responsibilities should be implemented in the Delaware Valley.