Tuesday, July 23, 2013

Latino Homebuyers Face Hostility, Higher Fees, And Fewer Options

Though formal “redlining” based on race was banned decades ago, a new report finds that Latinos still face rampant discrimination in the housing market. The report, released Monday from the National Council de la Raza (NCLR), found that Latinos looking to buy or rent homes were more often met with hostility, quoted higher fees, and offered fewer options than white prospective buyers.

NCLR sent white and Latino testers to try to buy or rent homes in Birmingham, AL, San Antonio, TX, and Atlanta, GA — three cities with burgeoning Latino communities. Though about 58 percent of Latino testers had no complaints, 42 percent were subjected to discrimination. Housing agents were less willing to schedule appointments with Latino testers than white testers. Some Latino buyers were told they would have to pay an additional deposit or fee that was not mentioned to their white counterparts. Latinos were also specifically told they would need valid identification and a credit check. White testers, on the other hand, were offered cheaper security deposits, lower application fees, discounted rent, and more information about the neighborhood and financing options. They were also shown additional apartments Latinos did not see.

This casual discrimination against Latinos is not only offensive; it’s bad business. As the NCLR points out, Latinos will make up half of first-time home buyers by 2020. As most other young Americans’ interest in owning their own homes declines, overwhelming majorities of Latinos believe homeownership is intrinsic to success.

Housing discrimination extends to other non-white home buyers, as well. A similar study determined black and Asian buyers were told about fewer homes than white buyers, even though they had comparable credit qualifications and housing criteria. Another study found that black and Latino home buyers paid 3.5 percent more than whites for comparable homes in Los Angeles, Chicago, San Francisco, and Washington, DC. Though the Fair Housing Act of 1968 banned outright discrimination, many of the common tactics used against non-white buyers are subtle enough to keep them from realizing they are being treated differently.

Meanwhile, minority renters and homeowners are still struggling to rebound from the housing crisis, which hit blacks and Latinos twice as hard as white mortgage borrowers. Federal Reserve Chairman Ben Bernanke blamed discriminatory mortgage lenders who regularly charged minorities higher loan prices and “redlined” minority neighborhoods.

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