In the property management industry, compliance with the Fair Housing Act is not just a best practice – it is a legal obligation. A recent case highlights the serious consequences that can arise when housing providers engage in discriminatory practices, specifically steering. The case involves a housing authority accused of steering tenants based on race, a clear violation of the FHA. This case offers crucial insights into the importance of inclusive marketing practices and the need for property managers to actively avoid even the perception of discrimination.
United States v. Housing Authority of Ashland, Alabama (N.D. Ala.)
The Case: A History of Segregation and Steering
The case involved a housing authority that originally developed segregated communities as far back as 1958, when it was legal to designate specific properties for white and non-white residents. Despite the passing of the FHA, which prohibits this type of racial segregation, the Department of Justice (DOJ) accused the Authority of continuing to steer tenants based on race, reinforcing racial segregation within its public housing properties.
Of the seven properties managed by the Housing Authority, five were never intended to be segregated. However, the DOJ alleged that over time, these properties had become segregated through unlawful steering. Three properties were predominantly white, while two were predominantly Black, and the DOJ argued that this imbalance was not a natural reflection of the surrounding demographics. Instead, the government alleged that the Housing Authority was deliberately directing tenants to certain properties based on their race, a practice that perpetuated racial segregation.
Understanding Steering and Its Legal Implications
Steering is defined as the practice of guiding prospective tenants or homebuyers to specific properties, buildings, or units based on a protected class, such as race, ethnicity, or religion. Under the FHA, this practice is illegal. Even if a property manager believes they are acting in the best interest of an applicant, steering remains unlawful.
In this case, the DOJ alleged that Black applicants were disproportionately funneled into majority-Black properties, while white applicants were directed to majority-white properties. Further allegations included claims that Black applicants were often skipped on waitlists for vacancies at predominantly white properties, reinforcing the racial divide. These alleged actions were found by HUD to violate the FHA, regardless of whether the intention was to make applicants feel more comfortable or not.
After this lawsuit was filed and settled, the Housing Authority was required to pay $275,000 to individuals affected by the discriminatory policies. Additionally, the settlement mandated significant changes to the Authority’s policies and procedures, as well as ongoing monitoring to ensure compliance with fair housing laws.
Marketing and Advertising: A Key Component of Compliance
One of the critical issues raised in this case is the importance of inclusive marketing and advertising practices. Housing providers, especially those receiving federal funds, are expected to reach out to a diverse range of potential applicants. If a property’s applicant pool consists predominantly of one race or ethnicity, this may indicate that the housing provider is not doing enough to attract a wider audience.
To comply with the FHA, housing providers must take steps to ensure that their marketing efforts are inclusive. This can involve advertising in different community centers, on diverse radio stations, and in places of worship that attract a variety of racial and ethnic groups. Additionally, marketing materials should feature individuals from different backgrounds, ensuring that all applicants feel welcome regardless of their race or ethnicity.
It’s essential to note that these marketing practices are not just best practices; they are expectations set forth by HUD. Failure to adequately market to diverse populations can lead to legal challenges, as seen in this case.
The Importance of Documentation
Another key takeaway from this case is the importance of maintaining proper documentation. Property managers should be able to show evidence of their efforts to create a diverse applicant pool. This could include records of where advertisements were placed, the types of media used, and any other outreach efforts aimed at attracting applicants from various racial and ethnic backgrounds.
If a property’s applicant pool remains homogenous despite outreach efforts, property managers may still need to demonstrate that they have made a genuine attempt to reach diverse groups. By maintaining thorough documentation, housing providers can better protect themselves from allegations of intentional (or unintentional) discrimination.
Steering is Illegal and Avoidable
The case serves as a powerful reminder to property managers about the dangers of steering. It doesn’t matter if a housing provider believes they are doing what’s best for the applicant or if an applicant requests to live in a certain area based on race (or any other protected category) —steering is illegal under the FHA. Property managers must ensure that their policies and practices do not discriminate against applicants based on race, ethnicity, or any other protected class.
For those in property management, the key to avoiding steering and other potential discriminatory practices lies in robust compliance efforts. This includes implementing inclusive marketing strategies, maintaining thorough documentation, and regularly reviewing policies to ensure they align with fair housing laws. In the end, the goal is to create diverse, inclusive communities where all residents feel welcome and are given equal opportunities.
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