- Steering happens when agents say, “this is a good neighborhood,” or “this is the best neighborhood for families with children” or “you wouldn’t be happy here.” The practice is prohibited by the Fair Housing Act.
The tie between housing and social issues is simple to connect, but I am not sure which comes first: the housing or the social issues — because it is all so intertwined.
Have you ever noticed how people with lower incomes live in different neighborhoods than those who have higher incomes? In St. Paul, it boils down to good schools versus not-so-good schools. I have never understood how we can have good schools and bad schools within the same school district, but we do.
Rich buyer, poor buyer
People with higher incomes rarely move into the neighborhoods where people with low incomes live, and, of course, people with low incomes generally cannot afford to live in the communities with the best schools and the nicest houses.
Recently, as I worked with a homebuyer who is a school teacher and another who works for a major technology company, it was easy to contrast the homebuying options and the whole homebuying experience.
The buyers were all close in age and white with similar education levels.
The school teacher and his family were limited to just a couple of neighborhoods. Most of the houses we looked at needed work and some needed a lot of work. Most were poorly marketed with marginal photographs, and a couple of the homes smelled so bad I could not stay in them for very long.
The homebuyers with the better paying jobs can live in any neighborhood they choose, and most of the homes we looked at needed very little work.
They ended up buying a home in a neighborhood where home prices are about average for the city. They liked the style of the houses, the proximity to public transportation and the close proximity to shopping and parks. They did not look at any homes in the poorest neighborhoods.
Life in the neighborhoods with the lowest-priced housing isn’t for everyone. Crime rates are higher, the grocery stores are not as nice and the food is actually more expensive. High-quality fresh produce is harder to find. It’s noisier at night. The test scores in the schools are lower, as are the high school graduation rates. At least that’s how it is in my city.
The boundaries on an agent’s advice
Some say that it’s the practice of “steering” that keeps the rich and the poor living in separate neighborhoods. That may be true for the folks who can afford to live in any neighborhood, but there are others who can only afford to live in the areas with the lowest home prices — and those individuals seem to be steered primarily by their budget.
Homebuyers ask us to recommend a “decent” neighborhood. Steering happens when agents say, “this is a good neighborhood,” or “this is the best neighborhood for families with children” or “you wouldn’t be happy here.” The practice is prohibited by Federal law.
Sometimes steering happens on a subconscious level. Agents make assumptions about where people will want to live based on their religion or family status or even skin color or ethnicity.
Real estate agents are strongly encouraged to become neighborhood experts, and buyers often come to us and ask us to recommend a neighborhood. I wish I had a dollar for every time I have told a client that I cannot recommend a neighborhood. I cannot recommend the best condo buildings for singles, or even the best neighborhood for young families.
It would be nice if real estate writers, coaches and consultants were more familiar with the idea of steering and other Fair Housing laws.
I give my clients resources where they can find more information about most anything they want to know about a neighborhood. I often ask them about where they work, and if they like to be able to walk to stores and restaurants. I tell them about parks, dog parks and bike paths, too.
I do not feel qualified to recommend schools and have never done so. I am honest with my clients about where my areas of expertise are.
I have had people tell me they want a safe neighborhood. I don’t even know what that is, and it seems subjective to me. I usually just explain how the grid system in our city works and how they can get information about crime for each grid.
It must be very hard to catch agents who are “steering” their clients. It is even possible that agents are steering their clients to certain neighborhoods without being aware of the implications of the advice they are giving.
Being a real estate agent is about making money, which is why we are exposed to more articles about lead capture and the latest tech toy than we are to articles about Fair Housing.
Every now and then, let’s take a few minutes to remember that real estate is also about people.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul. She is also the founder of StPaulRealEstateBlog.com.
