Diversity in the Housing Industry: A Promise of the Fair Housing Act?
By Lamont Blackstone
Fifty years ago this April, in the aftermath of the assassination of Dr. Martin Luther King, Congress passed the Fair Housing Act of 1968. In that landmark legislation (FHA), the nation took a major step forward in realizing King’s dream of erasing housing inequality in Chicago—and all American communities. In a national housing market that suffered decades of disruption by the artificial impediments of bigotry, the FHA prohibited discrimination in the sale, rental and financing of housing. It meant that the single mother who raised me could not be discriminated against in renting an apartment for her family.
Although real estate ownership has been a bridge to wealth creation for households, America has had an ugly history of restricting or prohibiting such opportunities for non-whites. Deed restrictions once prevented the sale of homes in white neighborhoods to African-American buyers. In 1879, California revised its constitution to limit the ownership of land to Caucasians, in order to prevent Chinese immigrants from acquiring property. Later in 1913, California banned Japanese immigrants from buying land in the state. So the legacy of the FHA is also an acknowledgment that all ethnicities should have the unrestricted right to invest in real property—as well as rent it.
The globally historic nature of this legislation should not be ignored. In 2017, there are still nations that do not adequately ensure open housing markets. The British Broadcasting Company has reported on discriminatory practices against South Asians and mainland Chinese nationals in renting apartments in Singapore. Online advertisements there have expressly stated that Indians and renters from mainland China need not apply—regardless of their financial wherewithal. Brazil, which hosts the largest black population outside of Africa, is notorious for its discriminatory attitudes towards Brazilians of African descent, and those attitudes likely drift into housing transactions. In America, the FHA has helped to make housing markets more open by compelling the market’s suppliers—developers, owners, property managers, brokers and lenders—to eliminate exclusionary attitudes in transactional decisions. The Act, in effect, empowered multicultural communities as consumers of housing.
However, consumption—and the demand curve it undergirds—is only one half of a market system. I believe that a leap forward in equality in housing will occur when diversity and inclusion are advanced, both in employment and entrepreneurship. When multicultural professionals are recruited into the rental housing industry, Dr. King’s dream of open housing markets is realized along a different yet critical dimension. Although the empowerment of multicultural communities as consumers is essential, the empowerment of those same communities in the production function of the sector will be transformative. It will offer an additional bulwark against the return or expansion of prejudicial practices in the housing market. But even more important, advancing diversity and inclusion initiatives among rental housing industry stakeholders brings important benefits for the growth of the industry.
Although common sense dictates that any industry can benefit from tapping multiple pools for talent, ethnic and gender diversity also bring firms valuable perspectives and life experience. These may include, but are not limited to, the following:
- The ability to predict urban neighborhoods poised to rise and when they will rise—including those areas that will attract Millennials.
- Familiarity with other asset classes such as retail and office space and how such components can be incorporated into rental housing developments.
- Sensitivity to the amenities and features of greatest appeal to growing customer segments such as Asian-Americans and Latinos, as well as cultural competency in marketing to those demographics.
- Relationship management skills crucial for winning community and political support for controversial development projects in metropolitan markets.
Project REAP recognizes that talented minority professionals can offer a unique value proposition to the rental housing industry. Most of our alumni come to REAP with diverse and transferable skill sets in diverse professions (including real estate) that span finance, construction, accounting, brokerage and the law. Many are inspired by the accomplishments of minority professionals and entrepreneurs who have impacted the industry. The ranks of those national and global role models include Walter Edwards and Carlton Brown of Full Spectrum Development, who helped to advance green-building development; Daryl Carter, past chairman of the National Multi-Housing Council and founder of Avanath Capital; Victor MacFarlane of MacFarlane Partners, the legendary financier of rental housing and mixed-use projects; Henry Cisneros, the former HUD Secretary and founder of CityView; and Wang Shi, the founder of China Vanke Co., one of the largest residential developers in China. We see REAP alumni, such as Buwa Binitie of Dantes Partners LLC and Sonya Rocvil of Berry Rocvil Enterprises, as examples of emerging rental housing entrepreneurs positioned to bring a new generation of leadership to the sector.
However, REAP’s leadership will not be satisfied until there are more men—and women—added to the aforementioned list. That is why we cherish our sponsorship by the National Apartment Association, the National Multi-Housing Council, NAIOP, BOMA and the Urban Land Institute. For when major industry associations serving the rental housing sector support diversity, and understand its value proposition, their member companies are sure to follow. Thus, REAP is pleased to announce that one of the largest rental housing operators in the nation, Greystar Real Estate Partners, has joined REAP’s family of sponsors. Their support is testament that diversity is recognized as smart human capital management and good business practice. Greystar represents the type of forward-thinking leadership that American Millennials expect of the companies from which they buy their products and services.
Regarding those Millennials, they have often shown their willingness to discard the prejudices of the past. A fine example is how they distinguish between a “good neighborhood” and a “bad one.” They have demonstrated their proclivity to be pioneering, which partly explains how certain urban neighborhoods such as Harlem have become increasingly diverse. Millennials are also driving all types of consumer brands to practice socially responsible marketing—as reported in a March 2017 issue of Forbes magazine. This may be an omen for housing development. In recent years, the rental housing sector has focused on the benefits of branding. If branding is a trending force in the industry, then rental housing developers and investors may find that brandishing their credentials of diversity and inclusion will help foster the appeal of their residential communities. This will not be at the expense of affordability and attractive amenities, but it could very well serve as one additional marketing tool—both locally and nationally. So although the FHA began with a focus on the rights of minorities as consumers, its spirit will be advanced in the 21st century by minorities serving as rental housing executives and entrepreneurs.
– Lamont Blackstone, REAP Chair