NAR is in the news, but for a positive reason for a change. Hoooray! It appears that the leadership team at NAR met in Washington DC on January 8th to formulate a plan on fair housing. From NAR’s website:
The leadership of the National Association of REALTORS® met in Washington today where they unanimously passed a Fair Housing Action Plan which will distinguish NAR as a national industry leader on fair housing.
I have read through the elements, and believe this is a great step forward. Kudos to the leadership team for unanimously passing the FHAP. I do hope it will indeed distinguish NAR as a national industry leader on fair housing.
As a cherry on top, the leadership then met with HUD Secretary Ben Carson who “agreed to join NAR in a joint public service campaign to advance [their] shared fair housing goals.” All very good indeed.
However, since this is NAR’s own action plan, which means they can add to it or modify it, I’d like to suggest adding one key element. Indeed, one might say that without this element, the entire thing is a house of cards.
That missing element is anything to do with actual enforcement. That’s a problem.
Here are the elements of the new NAR FHAP:
- Ensure that state licensing laws include effective fair-housing training requirements and hold real estate agents accountable to their fair housing obligations;
- Launch a Public-Service Announcement Campaign that reaffirm NAR’s commitment to fair housing, and how consumers can report problems;
- Integrate fair housing into all REALTOR® conferences and engagements (to include a fair housing theme throughout the May Midyear Meeting);
- Explore the creation of a voluntary self-testing program, in partnership with a fair housing organization, as a resource for brokers and others who want confidential reports on agent practices so they can address problems;
- Create more robust fair housing education, including unconscious-bias training, and education on how the actions of REALTORS® shape communities;
- Conduct a national study to determine what factors motivate discrimination in sales market;
- Profile leaders who exemplify the best fair housing practices and workplace diversity;
- Develop materials to help REALTORS® provide consumers with information on schools that avoids fair housing pitfalls.
To be fair, the story on the NAR website does say “among other things” so perhaps enforcement mechanisms are one of those other things. But reading through the list, there’s nothing in it about NAR and the REALTOR Associations state and local doing their part to enforce non-discrimination on the part of its sworn membership.
More education is absolutely a good thing, especially in light of what the Newsday team uncovered about fair housing continuing education. Integrating fair housing into REALTOR events is absolutely a good move. Developing materials to help REALTORS avoid fair housing problems when what they really want to do is provide information on schools is long overdue. NAR deserves kudos for all of these.
Having said that, there’s almost all carrot and no stick with this plan. The only thing that passes for a stick is the first element, in which NAR would… I guess lobby state legislatures and state real estate regulators to do more enforcement? Note that state real estate laws already prohibit fair housing violations and already have various mechanisms for enforcement, if the violators can be identified in the first place (more on this below). So, I mean… I guess it’s a nice thing to say that NAR will somehow ensure that state enforcement will be better… but that’s not doing enforcement yourself, and that’s not an action plan for NAR: “regulators will do a better job” is more of an action plan for the states.
Let the State deal with licensees who are violating fair housing laws. That’s the State’s turf and responsibility. But NAR should deal with REALTORS who are violating NAR’s Code of Ethics and the (hopefully) higher standards for members. That’s NAR’s turf and responsibility.
I haven’t thought about this too deeply, and maybe these are terrible no-good suggestions. But they are worth what you paid for them. Others more versed in NAR policymaking can take it from here. Here they are.
Either conduct, or fund the conduction of, more undercover investigations as The Newsday team did.
One of the thorniest problems of fair housing violations of the variety we all saw in the Newsday Long Island Divided special is how difficult it is for victims of discrimination to know that they have been victimized at all.
As the Newsday Team itself discusses:
Johnnie Mae Alston, 65, a retired state worker, had no idea that an agent refused to provide her service on the same terms offered to a white client.
“I would have never known,” Alston said on learning how her experiences as a tester in Newsday’s investigation compared with the experiences of her white counterparts.
Speaking of the real estate agents she met, Alston added: “They make you feel like they are treating you like everybody else. That’s because you don’t see the other side. But once you see the other side, you realize that you aren’t treated that well.”
All these testers – both minority and white – discovered for the first time how their experiences compared when Newsday brought them together for joint interviews.
Without comparison, it’s impossible to know whether you’ve been discriminated against in violation of fair housing or not.
Which is why the kind of “secret shopper” paired testing undercover investigation of the variety that Newsday conducted is so important to uncover the existence of fair housing violations in the first place. And paired testing isn’t some brand new, unproven, unreliable methodology. Again, from Newsday:
Paired testing has been central to investigating housing discrimination for almost half a century. Enforcement agencies, including the U.S. Department of Housing and Urban Development and the U.S. Justice Department, rely on undercover testers to determine whether real estate agents deny equal opportunities to home hunters based on race or ethnicity.
In fact, enforcement of the Fair Housing Act, as well as of state and local anti-discrimination statutes, is often powered by paired testing.
I think it would make an incredibly strong statement for NAR to say in its Fair Housing Action Plan that it will undertake random paired testing throughout the year, each and every year, to make sure that its REALTOR members are in compliance with not only the letter of the fair housing laws, but the spirit of nondiscrimination in the Code of Ethics.
As noted above, the state authorities are more than capable of enforcing the law against violators. What they’re not so good at is catching the violators in the first place. That’s an area where the regulators would welcome NAR’s help.
The latest Form 990 for NAR (2018) shows annual revenues of $245 million. An organization of that size and magnitude can easily fund several random paired testing investigations throughout the country each and every year.
They don’t even need to build out a paired testing organization or whatever. In case you were sleeping under a rock for the past 10 years, local newspapers and local media are under enormous pressure from the Internet, alternative media, and social media. NAR could simply fund some local news organizations to do in their areas what Newsday did in Long Island.
You don’t have to constantly test every REALTOR everywhere; just the understanding that the buyer sitting in front of you just might be an undercover investigator is enough of a stick for most people. And should such a paired test reveal violations, then that’s a win for NAR, for the REALTOR brand, and for every other REALTOR who isn’t violating the law and the Code of Ethics.
Streamline Enforcement and Discipline
Those of us who have been around the world of Associations know that the wheels of justice often turn very slowly, if at all, and usually in secret. There are lots of reasons given as to why it takes so long and why it’s so difficult to bring an ethics violation against a REALTOR.
All of those reasons disappear when the violation in question is invidious discrimination.
I would like to suggest that NAR include in its FHAP some streamlining of the grievance and discipline process when it comes to fair housing violations. Treating blacks and whites differently is not in the same universe as trying to poach a listing. The enforcement scheme should reflect that reality.
Authorize Local Associations to Be More Proactive
In line with the above, I suggest that NAR modify its policies to allow state and local REALTOR Associations to be far more proactive in investigating and prosecuting fair housing violations by members.
Today, the ethics violation process is almost 100% reliant on volunteers and on someone coming forth with an accusation, then having to provide proof, evidence, etc. Many a member decide not to bother with the work it takes to pursue an ethics violation case against a fellow REALTOR. Paid staff of the Association are not allowed by policy to take an active role. (As far as I know, but the Handbook may have been changed since last time I looked at it.)
When it comes to fair housing, I believe it’s warranted to allow Association staff to be far more proactive in investigating the allegation, and filing grievances if called for.
There Is No Policy Without Enforcement
I think this is a critical missing piece in what is otherwise a fantastic plan for tackling fair housing issues in REALTOR world. After all, a law that does not get enforced is not a law. Policies and Code of Ethics that do not get enforced may as well not exist.
So the increase in education is wonderful. Committing to raising public awareness is very good. Enabling REALTORS from inadvertently violating fair housing best practices is totally warranted. Everything actually in the Fair Housing Action Plan is really good.
It’s just that it is missing a critical element: enforcement. Add that, and we have a fantastic plan from the nation’s largest trade organization. That would be Owning It for realz.