A Brief History Lesson on REALTORS and Race

I didn’t really want to write this, because I assumed it was relatively common knowledge within the U.S. real estate industry that we have a sordid past of open racism, discrimination, and bigotry. Plus, I’m frankly tired of writing about and talking about social issues that go beyond the real estate industry.

I feel like I’ve done my part as a commentator when I wrote this post asking if the industry were serious about race, then a followup post pointing out the twin root causes of systemic racism in housing today: zoning and local school districts. Obviously, neither “went viral” because reasons.

But I got a private message on Facebook from Chance Brown, a friend and a longtime reader. He’s also a successful broker-owner of CB&A Realtors, and a leader in the REALTOR community. In fact, it’s hard to be more dedicated to REALTORS than Chance:

Chance is honored to have received the Omega Tau Rho Award for service to the real estate industry. Chance is also proud to serve the Realtor community and property owners in Texas as a Trustee of the Texas Association of Realtors Political Action Committee (TREPAC), member of the Board of Directors for the Texas Association of Realtors and is a former member of the Board of Directors for the National Association of Realtors. He also serves on several Advisory Groups at the Houston Association of Realtors. Chance is also licensed by the Texas Real Estate Commission to teach CE and MCE courses.

Now, unlike some other messages I’ve received, Chance wasn’t angry, defensive or pissed off. He was  just confused, and wrote:

Yo! I know it isn’t your typical milieu, but I think it would be helpful to many of us out there if you wrote a piece on the history of NAR as relates to race. You keep saying that Realtor has a racist history but, in Texas, nearly 70% of the membership has only been licensed since 2012. So, a good portion of us have no idea what you mean.

(FYI, I got Chance’s permission to use his name and to post what he messaged me.)

He was referring to a couple of occasions when I took to social media to mock the empty virtue signaling coming from the industry, such as the Houston Association of REALTORS deciding to remove the word “master” from “master bedroom” and “master bathroom” in order to be “more sensitive.”

We know this kind of virtue signaling is not going well, because of things like this:

Not only did John Legend, singer and actor, call out the industry for focusing on “fake problems” but then in fact shared the Long Island Divided story of racist agents to his 13.5 million followers on Twitter.

Part of the problem, to me, is the cancel culture that is infecting society as a whole and the real estate industry by extension. As many people care about “master bedroom” as do the name of Washington’s NFL team… which is to say, nobody. Nobody took to the streets to protest Aunt Jemima, or Trader Giotto’s. But that’s where privileged upper class whites are focusing their attention. Because those things are easy to do and change nothing.

So if we’re going to cancel every term, every phrase, every word that has some “insensitive” connotation in somebody’s fevered imagination, I figured we all should stop using the term REALTOR with its racist history. I thought everyone knew about the racist history of NAR and the REALTOR movement.

It took Chance telling me that most newer REALTORS have no idea about history to make me think that maybe my job isn’t done. For whatever reason, I’ve managed to become the one person in real estate who seems able to just tell it like it is without worrying about political repercussions.

So let me do a cursory explanation.

NOTE: I am not a historian. I don’t work for NAR or have access to its vast archives. I did not engage in weeks of research for this.

In fact, let me give credit where credit is due: NAR itself. Most of my sources come directly from NAR, which has owned up to the past while having reformed for the better. NAR could have deep-sixed the records of those “bad old days.” That would have been consistent with the current madness of Cancel Culture. But NAR did not do that. Instead, NAR has been open about its past, because it highlights the progress it has made and continues to make.

In fact (x2), the rest of this post can be links and quotes from NAR and other sources, because the industry has done a better job of recognizing its past while celebrating its present and its future than I could.

So. Let’s do it.

A Brief History

The best place to begin is here: Fair Housing and Property Rights: a History. NAR did an excellent job providing a brief overview of the history of fair housing for the 50th anniversary of the Fair Housing Act in 2018. Right at the outset, we get this admission:

The nation and NAR did not always support fair housing rights. In fact, NAR opposed passage of the Fair Housing Act, and at one time allowed local Associations to exclude members based on race or sex. Our understanding of fair housing rights changed over time and today NAR leads efforts to expand those rights.

Let’s be clear about this: NAR used its considerable political lobbying prowess to oppose the Fair Housing Act of 1968. That’s not 1938 or 1958, but 1968.

In another article, Learning From Our Past: The History of the Fair Housing Act, we get a more detailed explanation:

But there’s a flip side to NAR’s record as a fair housing advocate. “For many years our industry was opposed to fair housing,” Underwood said.

Many factors played into NAR’s resistance: historic prejudice, the belief that property values were more stable if neighborhoods were occupied by the same racial/social classes and the argument that people should be free to refuse to sell or rent a home to anyone for any reason — even if the decision was based on race.

NAR actively fought passage of the Fair Housing Act. “The opposition coming from our industry was you’re forcing us to sell to people we don’t want to sell to,” Underwood said.

In fact, Black Americans could not join NAR at all until 1961, according to this excellent PDF report from NAR itself:

For many local REALTOR® associations, preventing anyone who wasn’t a white male from becoming members (and gaining access to MLS listings and other essential resources) was an acceptable way of doing business. Often their by-laws explicitly stated that blacks, women, Jews, and other groups were not allowed to join.

Although the National Association of REALTORS® welcomed the REALTISTS [members of the Black National Association of Real Estate Brokers, or NAREB, which still exists to this day] to the industry and pledged to help the organization along, NAR did nothing to open up membership in local boards of REALTORS® until the 1960’s. It wasn’t until 1961 that NAR finally overturned the policies that prevented Black real estate professionals from joining their local boards of REALTORS®. Even after the passage of the Fair Housing Act, some local Boards continued to prevent or discourage Black real estate brokers from becoming REALTOR® members.

Well, seeing as how NAR opposed the Fair Housing Act of 1968, it’s hardly surprising that local boards excluded Black real estate brokers and agents from joining, is it?

Furthermore, we know from NAR itself, that NAR did not commit to fair housing until 1975 when NAR signed a Voluntary Affirmative Marketing Agreement (VAMA) with the Federal government:

NAR adopts an agreement with HUD to promote fair housing, educate members regarding their rights and obligations under the Fair Housing Act, develop and recommend fair housing procedures for members and participate in community based fair housing activities.

This isn’t ancient history; a 21-year old young REALTOR in 1970 would be 71 today. There are plenty of members across the country who are in their 70s, still actively contributing, and still in leadership positions.

In my ten plus years of working in this industry, I have never once met a REALTOR in his or her 70s who looks back on those years with fondness. They reject the bad history of the past, and many were actively working for civil rights of Black real estate professionals back in the Civil Rights movement days. They frankly acknowledge the past, are glad we have made progress, and are as committed as anybody in ensuring that the industry never repeats its past mistakes.

Today’s REALTORS are not yesterday’s REALTORS, but hey, if we’re gonna get crazy with renaming things, removing words, being super-duper sensitive….

There’s a lot more you can find on your own simply by reading materials on NAR’s website yourself. Like the older leaders I know, NAR is not trying to hide its past: it is facing up to the mistakes of the past, in order to ensure that we as an industry do not repeat them.

Here’s why I care.

Put Up, or Shut Up

In the Learning From Our Past article, Fred Underwood of NAR is quoted as saying:

“It’s really important that we know the history of segregation,” said Fred Underwood, director of diversity and inclusion for NAR. “As an industry and an organization, we have to understand why these housing patterns still exist … so that we can do a better job of addressing them.”

I care about the stuff, because the industry has to “understand why these housing patterns still exist, so that we can do a better job of addressing them.” Stop with the easy shit nobody cares about that makes no difference, and actually DO a better job of addressing real problems.

It’s put up or shut up time. Token gestures are not going to cut it.

I have already written a very long post on two root causes of segregation in housing and systemic racism: anti-growth zoning, and local levy school funding. As yet, no industry leader has taken on these issues, or any substantive issues really. There is no session planned at any upcoming (virtual) conferences to actually tackle these thorny issues.

There is no industry-wide dialogue on what to do about the obvious legacies of our racist history. All we get is “more training” as if it were not already illegal to engage in steering and redlining. We get more talk about how racial discrimination is against the Code of Ethics, as if that were not already illegal.

Meanwhile, 33 of the 34 agents busted in the Long Island Divided investigation remain working REALTORS as far as I know.

I’m hardly the only person in the world or in the industry who is tired of the talk talk and the feel feel and the sympathy and the “we stand with you” and empty gestures. Start doing, and if you’re not going to do anything, please at least stop talking.

A Note About the MLS & Exclusion

The MLS is not free from the need to learn from history and do something to address inequity either.

Many of the people who work in and around the MLS recognize the phrase “Thompson states” referring to the 11th Circuit Court decision, Thompson v. Metropolitan Multi-List, which established the precedent that MLS access cannot be conditioned on the broker/agent being a REALTOR. So Alabama, Georgia and Florida cannot condition MLS access on REALTOR membership.

NAR and the various MLSs that are not in Alabama, Georgia and Florida (and California, but that’s from a state law decision) have long held that they can in fact limit MLS to REALTOR members. The current webpage talking about this is here and states:

NAR believes that limiting MLS access to REALTORS® is legitimate and lawful, and that litigation challenging the MLS membership access rule can be successfully defended. The outcome of litigation is always uncertain, however, and the particular facts involved may make success more or less likely. NAR has provided and will continue to provide assistance in a variety of ways, as described above, to associations and MLSs who face such litigation.

What is less well-known, even in MLS circles, is the fact that the Thompson case stemmed directly from past racist policies of NAR. Here’s the relevant section from the opinion itself:

There are four parties to this dispute. The two defendants are Metro and the DeKalb Board of Realtors; the two plaintiffs are Fletcher Thompson and the Empire Real Estate Board. Fletcher Thompson is a real estate broker who owns his own brokerage firm on the south side of Atlanta. He does not wish to join the Atlanta Board of Realtors. He applied to use the Metro listing service but his application was denied solely because of his failure to join the Realtors. The defendants admit that when he joins the Realtors he will be allowed to use the listing service. The Empire Board was founded in 1939 as an African American professional association because, at that time, the Realtors excluded African Americans from membership. The Empire Board competes with the Board of Realtors and offers similar services, including a code of ethics and arbitration. The Empire Board is a predominantly African American association which services a predominantly African American clientele. Most of its members are located on the south side of Atlanta and most of its members traditionally represent buyers. The Empire Board alleges that, because of Metro’s requirement that its members also belong to the Realtors, Empire is losing members. Some firms that otherwise would join the Empire Board cannot afford membership with both the Realtors and the Empire Board.

The Thompson lawsuit was brought in 1988, and decided in 1991. All of the REALTOR boards, local, state and national, spent three years fighting Fletcher Thompson. And the decision was and remains a “considerable surprise” to NAR Legal. Really?

If you were Fletcher Thompson, who was denied membership for years and years because of the color of your skin, would you want to become a REALTOR? As a brokerage in Atlanta said in a 2017 blogpost:

Additionally, many older NAREB members, at the time, found it particularly offensive to be forced to join and pay an organization that for generations was, by its Constitution, “whites only”. In an absolutely unexplainable course of events, it took 3 years of legal haggling to determine what should have taken 3 seconds.

There are Jewish families I know from my childhood in Long Island who still refuse to buy Mercedes-Benz vehicles, because of its Nazi past. My parents for the longest time wouldn’t buy Hondas or Toyotas, because of the Japanese colonization of Korea. Those events were all before 1945. NAR didn’t allow black people to join until 1961, then discouraged them from joining well into the 1970s, and maybe even later. But the Thompson decision was a “considerable surprise?”

Here’s my question today, in light of all of the race awareness and sensitivity going on in the industry today: How does the MLS continue to justify limiting access to REALTOR members, in light of the clearly racist past of that policy?

Forget “master bedroom” nonsense — here’s an actual policy with roots in actual racism that the MLS continues to defend to this day.

How? Why? Y’all keep saying “Racism Has No Home Here” and post things like this:

 

Well, step the #@$ up then and prove it. Because KCRAR, which owns and operates HeartlandMLS, is a “REALTOR-Only MLS” as per its rules:

Because Heartland MLS is a REALTOR® only MLS, the initial participation fee, quarterly participation charge and other fees pertaining to Affiliates were removed from the services charges (Section 6.2) as well as the Appraisers section that pertained to Affiliate Appraisers was removed (Section 6.4). (September 2018)

Step up, yo. Nobody cares about your standing in solidarity with your black neighbors, if you continue to uphold rules and policies with racist roots.

I feel comfortable calling out KCRAR, because I know both Kipp Cooper, its CEO, and Bobbi Howe, its President, as well as many other leaders at KCRAR, and I know for a fact that there isn’t a racist bone in any of their bodies. They are some of the finest people in our industry. I know they would do the right thing, once their attention was drawn to the issue.

Consider your attention drawn to the issue.

Nothing is stopping each and every MLS in the country to offer MLS access to non-REALTORS. Nothing. Nothing but nothing is stopping NAR Legal from deciding not to defend these “REALTOR-only” lawsuits. And while getting rid of the REALTOR-only rule in the MLS is a small change that affects very few people, that is actually making a real change that actually affects some people. It’s actually doing something, having learned from our history.

Or we can agitate to rename “plantation shutters” to something else… and earn the scorn of John Legend and his tens of millions of followers some more. Because like he said, everybody’s talking, but nothing real is happening, ’cause nothing is new.

I sincerely hope this is the last time I’ll have to write about this particular issue, but… here it is, because I thought I owed Chance Brown at least this effort.

Thanks for your time and attention.

-rsh

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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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