New research outlines how landlords are more likely to ignore renters they perceive as African American and Latino, perpetuating a cycle of residential segregation and diminished income mobility for tenants of color.
The National Bureau of Economic Research examined more than 25,000 interactions between fictitious renters — identified by white, Black or Hispanic-sounding names — and 8,476 property managers in the country’s 50 largest cities. In a working paper reported by Bloomberg, the study found renters with white-sounding names received a 60 percent response rate.
Meanwhile, those with Latino-sounding names received a 57 percent response rate. Those with African American-sounding names fared even worse, receiving a mere 54 percent response rate.
A cycle of low response rates contributes to residential segregation, as Bloomberg noted that renters of color were up to 17 percent less likely to live somewhere where they failed to receive a response.
The study also broke down the cities where renters of color were more likely to face discrimination. Black renters faced the most discrimination in Chicago, Los Angeles and Louisville, while Latino renters faced the most discrimination in Louisville, Houston and Providence.
Housing discrimination goes beyond the rental market. A recent Freddie Mac study of 12 million appraisals found a gap between valuations of homes in mostly Black and Latino areas and those in white areas.
Freddie Mac’s research found that 15.4 percent of homes in mostly Latino areas and 12.5 percent of homes in mostly Black areas were appraised below the contract price. Only 7.4 percent of homes in mostly white neighborhoods were appraised the same way.
Additionally, a recent investigation by Markup in conjunction with the Associated Press, found that lenders were more likely to deny home loans to borrowers of color due to a bias hidden in mortgage algorithms.
[Bloomberg] — Holden Walter-Warner