The real estate industry contributed to racial inequality and segregation in housing, an "outrage" that deserves a historic excuse, said the new president of the National Association of Realtors.
"What Realtors did was an outrage about our morals and our ideals," Charlie Oppler said Thursday during a virtual fair housing summit hosted by the group. "It was betrayal of our commitment to fairness and equality."
It was the first time the 1.4 million member association apologized for its role in promoting discrimination in housing, a legacy that has contributed to the expansion of economic and racial inequality. The home ownership rate among black Americans was 46% as of Sept. 30, compared with 67% for all US households and 76% for whites, according to data from the Census Bureau.
The NAR opposed the passage of the Fair Housing Act in 1968 and, according to a statement, allowed members to be excluded based on race or gender. That discrimination was part of the residential systemic segregation led by the federal government and supported by the U.S. banking system through practices such as redlining, the NAR said.
"We can't go back to fixing past mistakes, but we can look this problem straight in the eye," said Oppler, executive director of Prominent Properties Sotheby's International Realty in Franklin Lakes, New Jersey. "And on behalf of our industry, we can say that what brokers have done was shameful and we're sorry."
Home equity is the largest source of household wealth, according to the Federal Reserve, which disadvantages minorities from generation to generation. Black homebuyers continue to face hurdles like lower credit scores and spending less money on down payments that limit their ability to get on the American Dream home ownership escalator.
According to a study by a group at the Massachusetts Institute of Technology, the "black tax" averages $ 13,464 over the life of their home loan to cover costs like mortgage insurance and higher interest rates.
An apology from the National Association of Realtors is long overdue and falls short of the need for redress to compensate African Americans for the financial harm caused by discrimination, according to Donnell Williams, president of the National Association of Real Estate Brokers, an industry association that promotes black home ownership. His group was formed in 1947 because the agents "wouldn't allow us into the club," he said
"The difference between black American and white wealth is directly related to home ownership," Williams said in a telephone interview. "You manipulated the entire system."
While the apology is welcome, the realtors are able to take action by promoting measures to reduce the racial homeownership gap, such as: For example, improving the supply of affordable housing, promoting equitable financing, and advising minority mortgage-eligible buyers, said Michael Neal, senior research associate at the Urban Institute.
"When the industry grapples with its past, words have to go with action," Neal said in an email. "I hope that your actions will spur other key housing sectors to make the additional investments needed to make change."
The realtors recently launched a new fair housing campaign and partnered with the United States Chamber of Commerce's Equal Opportunities Initiative to ensure they "lead the fight against housing discrimination," the group said.
"Now we are talking about expanding the fair housing law in ways we might not have imagined a few decades ago," Bryan Greene, NAR director of fair housing, said in the statement.