Journal of Housing Economics 2, 199-234 (1992)

Patterns of Racial Steering in Four Metropolitan Areas

Margery Austin Turner and Maris Mikelsons

The Urban Institute, Washington, DC 20037
Received July 13, 1992

1. Background and Introduction

Discrimination against minority homeseekers can take many forms. One important form of housing market discrimination is steering, in which minority homebuyers are shown houses, but in systematically different neighborhoods than those shown or recommended to comparable white homebuyers. Steering is often difficult for individual homeseekers to detect, since minorities are shown houses that meet their specifications and have few opportunities to find out about the houses they are not shown. But if minorities are systematically steered away from predominantly white neighborhoods -- and vice versa -- this form of discrimination clearly limits housing and neighborhood choice and may play a role in perpetuating patterns of residential segregation.

This paper describes and analyzes patterns of racial steering, using data from the Housing Discrimination Study (HDS), a nationwide fair housing audit study sponsored by the U.S. Department of Housing and Urban Development (HUD). We focus on similarities and differences among four major metropolitan areas -- Chicago, New York, Los Angeles, and Atlanta -- where sufficient audits were conducted to permit site-specific analysis. Statistical procedures are used to compare the characteristics of neighborhoods where houses were shown or recommended to black and white auditors and to test the hypothesis that black homebuyers are "steered" away from predominantly white neighborhoods, and offered housing opportunities in integrated or black neighborhoods instead. In addition, spatial patterns are illustrated in greater depth using maps for the metropolitan areas of Chicago and Atlanta, and spatial analytic techniques have been adapted to provide an alternative way to measure racial steering.


In summary, analysis of neighborhood characteristics of houses shown and recommended in the HDS reveals that both minority and majority homebuyers are limited in their neighborhood choices in two ways. First, all homebuyers who start their search by inquiring about the availability of units advertised in major metropolitan newspapers are likely to be shown and recommended houses in predominantly white neighborhoods rather than in integrated or minority neighborhoods. Even after controlling for the size and value of a neighborhood's owner-occupied stock, minority and integrated neighborhoods are significantly less likely to be advertised, shown, or recommended than comparable white neighborhoods. And second, black homebuyers who are shown and recommended addresses are likely to be steered to neighborhoods that are lower percentage white and less affluent than those shown and recommended to comparable white homebuyers. Moreover for the Atlanta and Chicago metropolitan area, spatial analysis techniques show even more dramatically that houses shown and recommended to blacks are clustered in more predominantly black and less affluent neighborhoods."

The results for all metropolitan areas from the statistical analysis of steering suggest a low level of severity. One possible explanation for the characteristics of neighborhoods included in the audit sample may be that the anchoring procedure employed in HDS limited the range of neighborhoods shown and recommended. If agents tend to advertise addresses that are in white neighborhoods, an auditor's initial request for the advertised unit may send such strong locational signals that all other addresses shown and recommended were in the same vicinity. However, HDS auditors gave agents ample "opportunity" to steer by asking for information about additional homes for sale in any neighborhood. Moreover, the neighborhood attributes of houses shown and recommended in HDS are essentially the same as in the 1977 Housing Market Practices Study (HMPS), where auditors did not explicitly ask for the advertised unit. Thus, it does not appear that the differential treatment of minority neighborhoods observed in HDS is a function of the anchoring procedures.

Patterns of racial steering appear to vary with characteristics of the metropolitan housing market. ln particular, the severity of residential segregation may play an important role in shaping neighborhood marketing practices and the treatment of individual minority homeseekers. When steering results are compared for Chicago (a highly segregated metropolitan area) and Atlanta (where segregation is less extreme), agents in the highly segregated market who advertise in the major newspaper appear to do very little business in black or integrated neighborhoods, although in both Atlanta and Chicago blacks are shown and recommended houses closer to predominantly black neighborhoods than are white homeseekers. Moreover, the areas where agents in Chicago and Atlanta concentrate their sales activity (as represented by the bounded ellipse) to whites and blacks differ more significantly. For all four in-depth sites, the overall pattern is for income levels and house values in the tracts where blacks are shown houses to be lower than in neighborhoods shown and recommended to comparable whites. In less segregated markets, agents who advertise in major newspapers do some business in black and integrated neighborhoods as well as in white neighborhoods. As a result, when they serve black customers, they are somewhat more likely to show or recommend houses in neighborhoods with a higher percentage black than neighborhoods white customers are shown or recommended.

© Copyright 1992 Academic Press, Inc.

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