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Closed Doors, Opportunities Lost

Closed Doors, Opportunities Lost: The Continuing Costs of Housing Discrimination

John Yinger
Copyright Date: 1995
Published by: Russell Sage Foundation
Pages: 464
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  • Book Info
    Closed Doors, Opportunities Lost
    Book Description:

    "Yinger writes as if four decades of protest and progressive legislation have barely altered the terrain upon which minority Americans struggle for equality. He's right....Yinger figures that housing discrimination costs black homebuyers $5.7 billion and Hispanic homebuyers $3.4 billion every three years." -Washington Monthly

    Nearly three decades after the passage of the Fair Housing Act, illegal housing discrimination against blacks and Hispanics remains rampant in the United States.Closed Doors, Opportunities Lostreports on a landmark nationwide investigation of real estate brokers, comparing their treatment of equally qualified white, black, and Hispanic customers. The study reveals pervasive discrimination. Real estate brokers showed 25 percent fewer homes to the minority buyers, and loan agencies were 60 percent more likely to turn down minority applicants. Realtors and lenders also charged higher prices to minority buyers, withheld or gave insufficient financial and application information, and showed them homes only in non-white neighborhoods. Residents of minority neighborhoods faced further difficulties trying to sell their homes or obtain housing credit and homeowner's insurance.

    Economist John Yinger provides a lucid account of these disturbing facts and shows how deeply housing discrimination can affect the living conditions, education, and employment of black and Hispanic Americans. Deprived of residential mobility and discouraged from owning their own homes, many minority families are unable to flee stagnant or unsafe neighborhoods. Two thirds of black and Hispanic children are concentrated in high-poverty schools where educational achievement is low and dropout rates are high. The employment possibilities for minority job-seekers are diminished by the ongoing movement of jobs from the cities to the suburbs, where housing discrimination is particularly severe. Altogether, these effects of housing discrimination create a vicious cycle-discrimination imposes social and economic barriers upon blacks and Hispanics, and the resulting hardships fuel the prejudice that leads whites to associate minorities with neighborhood deterioration.

    Closed Doors, Opportunities Lostprovides a history of fair housing and fair lending enforcement and joins the intense debate about integration policy. Yinger proposes a bold, comprehensive program that aims not only to end discrimination in housing and mortgage markets but to reverse their long-term effects by stabilizing poorer neighborhoods and removing the stigma of integration. He urges reforms to strengthen the enforcement powers of HUD and other agencies, provide funding for poor and integrated schools, encourage local housing and race-counseling programs, and shift income tax breaks toward low-income homebuyers.

    Closed Doors, Opportunities Lostprovides valuable insight into the causes, extent, and consequences of housing discrimination-undeniably one of America's most vexing and important problems. This volume speaks directly to the ongoing debate about the nature and causes of poverty and the underclass, civil rights policy, the Community Reinvestment Act, and the plight of our nation's cities.

    eISBN: 978-1-61044-562-7
    Subjects: Sociology, Political Science

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xii)
  4. PART ONE Introduction

    • CHAPTER 1 Race and Ethnicity, Prejudice and Discrimination
      (pp. 3-16)

      In July 1989 a 42-year-old African American woman, married with children, visited a real estate office in the suburbs of Washington, D.C., to inquire about a house that had been advertised inThe Wash ington Post.Her family’s income of $125,000 was more than enough to qualify for a mortgage on this $189,900 house. The real estate broker told her that the advertised house had been sold and that no similar units were available at that time. The agent, an older white woman, did not invite this customer to call again.

      Later that same afternoon, a somewhat younger white woman,...

  5. PART TWO Closed Doors:: The Extent of Discrimination

    • CHAPTER 2 The Housing Discrimination Study
      (pp. 19-30)

      The stories that begin this book, in which the treatment of comparable white and minority homeseekers is compared, illustrate the technique called a fair housing audit. The power of such an audit to shed light on the discriminatory practices of landlords and real estate brokers was recognized long ago by people running fair housing agencies. During the 1970s this power was discovered by researchers. By the time the U.S. Department of Housing and Urban Development sponsored its second national audit study, called the Housing Discrimination Study (HDS), audits were widely recognized as a refined and reliable research tool. This chapter...

    • CHAPTER 3 Discrimination in Housing
      (pp. 31-50)

      When an auditor or an actual customer arrives at the office of a real estate broker or rental agent, the first thing she does is to inquire about the advertised unit that brought her there. She then proceeds to ask whether any similar units are available. These questions, and the agent’s responses to them, constitute the first stage of a housing market transaction, and bring out the first signs of discrimination.

      As illustrated in Figure 3.1, an agent may withhold all information about available housing from a minority customer, who is thereby denied access to the housing market, at least...

    • CHAPTER 4 Racial and Ethnic Steering
      (pp. 51-62)

      In July 1989 a 31-year-old black man entered a real estate office in Atlanta to see if a $110,000 house advertised inTheSundayAtlanta Journal and Constitution,or anything similar, was still available. With an annual income of $75,000, he and his wife could readily afford this house, which was just the right size for them and their children. The real estate agent recommended two other houses far to the south of her office. Shortly thereafter, a 27-year-old white man went to the same agency to inquire about the same house. His income, down payment capability, and family characteristics...

    • CHAPTER 5 Discrimination and Redlining in Mortgage Lending
      (pp. 63-86)

      In Chicago in 1990, a black customer entered a lending institution to inquire about a mortgage and was told that he could not meet with a loan officer until he had completed an application and paid an application fee. An identically qualified white customer who entered the same institution on the same day was immediately given an appointment with a loan officer.

      Equally egregious acts of discrimination occurred at other lending institutions. One black customer was told that the institution did not make loans to first-time home buyers and another was told that it was illegal for the lender to...

  6. PART THREE Opportunities Lost:: The Consequences of Discrimination

    • CHAPTER 6 The Direct Cost of Current Discrimination
      (pp. 89-104)

      The evidence of continuing discrimination in housing and mortgage markets implies that minority households face severe barriers in trying to find housing, but it does not reveal the magnitude of the cost that these barriers impose. This chapter presents one way to measure this cost: It calculates how much minority households would be willing to pay to avoid current housing discrimination.

      This approach to the cost of discrimination is not intended to be comprehensive. It does not consider, for example, the benefits to the nation as a whole that would accrue from equal treatment of all citizens, nor does it...

    • CHAPTER 7 The Impact of Housing Discrimination on Housing Quality, Racial Segregation, and Neighborhood Change
      (pp. 105-134)

      The Sherman Park neighborhood in Milwaukee appeared to demonstrate the promise of stable racial integration. Thanks to an active community organization that was committed to integration, Sherman Park had grown from less than 1 percent black in 1970 to about one-quarter black in 1980. Moreover, Sherman Park was an island of integration in a sea of separateness, as half of the blacks in Milwaukee lived in neighborhoods that were at least 90 percent black. By 1990, however, almost half of Sherman Park’s residents were black, and its white population had declined by over 60 percent since 1970.¹ Prospects for continued...

    • CHAPTER 8 The Impact of Housing Discrimination on Education, Employment, and Poverty
      (pp. 135-158)

      Proviso West High School was built in Hillside, a western suburb of Chicago, in 1958.¹ Along with Proviso East High School, it draws students from Hillside and nine nearby suburbs, which range from working-class to well-to-do. When Proviso West was built, and indeed up until 1970, these suburbs were, with one exception, 99 percent white. The one exception, Maywood, was 42 percent black in 1970 and represented the beginnings of black movement into the western suburbs. Magnified by widespread housing discrimination in the Chicago area, this movement increased dramatically after 1970.² Between 1970 and 1980, the white population in the...

  7. PART FOUR Cures:: Public Policy to Combat Discrimination

    • CHAPTER 9 The Causes of Discrimination in Housing
      (pp. 161-186)

      In a survey of ninety real estate brokers on the south side of Chicago in 1955–1956, two-thirds of the respondents were “firmly convinced that they would suffer harmful consequences” if they sold a house to a black household in a white neighborhood. One group stressed business consequences only, and a larger group spoke only of social consequences, but most mentioned both.”¹ One-third of the brokers in another survey in San Francisco in the late 1950s felt that “there is a sizeable threat to the business of the broker who is thought to have arranged” a sale to a black...

    • CHAPTER 10 The History of Fair Housing and Fair Lending Policy
      (pp. 187-206)

      Racial and ethnic discrimination in housing used to be the law of the land. Between 1910 and 1917, fifteen state courts upheld the right of local governments to enact racial zoning ordinances that explicitly forbade the entry of blacks or members of other minority groups into white-zoned neighborhoods.¹ These ordinances were struck down by the U.S. Supreme Court in the 1917Buchanan v. Warleydecision.²

      When racial zoning was outlawed, the real estate community turned to race-restrictive covenants, which were restrictions on deeds or agreements among the property owners in a given area to prevent sales to minority households at...

    • CHAPTER 11 Public Policy to Combat Discrimination in Housing: A Comprehensive Approach
      (pp. 207-242)

      On March 1,1968, the National Advisory Commission on Civil Disorders, which had been appointed by President Lyndon Johnson almost a year earlier to investigate the causes of urban riots, issued its final report. This report, commonly referred to as theKerner Commission Report,contained the famous conclusion:

      Our nation is moving toward two societies, one black, one white—separate and unequal.

      Reaction to last summer’s disorders has quickened the movement and deepened the division. Discrimination and segregation have long permeated much of American life; they now threaten the future of every American.

      This deepening racial division is not inevitable. The...

    • CHAPTER 12 Opening Doors, or How Liberals and Conservatives Can Join to Fight Discrimination
      (pp. 243-252)

      This nation is still divided along racial and ethnic lines. The divisions are fainter in some ways and sharper in others than they have been in the past, but there is no sign that they are going away. After decades of battle and some success, many people would no doubt like to declare victory in the war against discrimination. Such a declaration would be decidedly premature. The evidence in this book demonstrates conclusively that African American and Hispanic citizens continue to encounter extensive discrimination in housing and mortgage markets, with reverberations throughout the nation's economic and social life. This chapter...

  8. APPENDIX: Analysis of Discrimination in the Number of Units Inspected
    (pp. 253-272)
  9. NOTES
    (pp. 273-376)
    (pp. 377-414)
    (pp. 415-424)
    (pp. 425-452)