Redlining Still Lives in ROC

I’ve invited a Rochester realtor to describe for us how segregation is maintained in the ROC area housing market. He has asked for anonymity since he continues to work with the inspectors involved.

Background note: The Section 8 housing program, administered by Federal Housing and Urban Development, authorizes the payment of rental housing assistance to private landlords on behalf of millions of low-income households.

First, a qualifier: what I am describing is based on observations, local information and stories derived from my colleagues. Where I’m able, I’ve cited statistical data that confirm these observations.

I believe there is subtle racial prejudice among Section 8 inspectors and within the Section 8 program in general. I also believe there are decent, non-prejudiced people within the local Section 8 organization, people who are at every turn attempting to ensure that their clients gain the best possible housing situation. To those people: I hope you continue your good work.

As a minority realtor and property manager I have been involved in the inner workings of Rochester area realty. My daily work allows me to ensure the successful operation of 400 plus rental properties, some Section 8 housing and some not. As other realtors can testify, when we tell people we are realtors, this automatically evokes a real estate related story during conversations. My articulation of prejudice within Section 8 derives from cross referencing these stories, adding my own experience, and finding the common ties. Here is what I find:

The racism found within Rochester housing lies in the suppression and forced migration of a socio-economic class. Caucasian woman do make up the majority of Section 8 housing, yet Black and Hispanic participants predominately live in the poorest areas where Section 8 is available, according to Housing and Urban Development statistics (1).

Landlords often experience discouragement in dealing with Section 8 inspectors as they try to have a house pass Section 8’s standard of living. In Section 8’s attempt to insure a “high” standard of living for their clients, the program has created disincentives for a landlord to participate in the Section 8 program. At times a Section 8 inspector will come to visit a property five or ten times before all the violations are considered remedied. These “violations” included non-working light bulbs, a single cracked bathroom floor tile, and messy gutters. While these may not seem too extensive to an owner of five or six houses, imagine owning twenty or more. Section 8 has the ability to pull the “guaranteed funding” from a landlord and delay rent payments for such minor discrepancies. These factors, added together, discourage a lot of landlords from participating in the program.

On the tenant side: Consider a person/family in dire need of housing, attempting to escape from homelessness. Imagine that they finally secure Section 8 housing. Then, based on some of the minor infractions cited above, Section 8 pulls funding half way through the lease period. The tenant who was managing to pay $300 per month under Section 8 is now faced with a rent of $1,000 per month!

There also seem to be more violations cited for homes located in more desirable areas. This leads landlords in these desirable areas to ask themselves why they would even participate in such a program. This is especially true when they consider that the minor issues being flagged might not normally be issues for a tenant paying out of pocket. The lack of cooperation between Section 8 and high-end landlords is forcing one of my clients with fifty Section 8 houses to slowly transition the houses back to regular paying tenants. In this way, a socio-economic group is being blocked from gaining entry to certain neighborhoods. Section 8 clients are being pushed into specific parts of the city.

Beyond Section 8, there has been other evidence of discrimination in the housing market. One specific example: In 2015 Five Star bank here in Rochester was accused by the New York State Attorney General’s Office of suppressing a minority class through redlining when it was discovered that Five Starr Bank would not give out loans to any family with an income less than $75,000. The low-income residents of Rochester don’t make anywhere near that (2). Further adding to the discrimination, Five Starr labeled applicants from specific locations as “Undesirable Loan Type”. Five Starr was ordered to pay $900,000 to minority loan programs and open up two banks in predominately low income areas (3).

Note from F.S.: The cumulative effect of the system described here is modern-day redlining. While Five Star bank was “caught”, other more subtle dynamics continue below the (intentionally) lazy eye of the justice system, often out of the consciousness even of those in charge of the systems.. I encourage you to explore the actual workings of the housing system in your area – the codes and ordinances, but also the realities and the concrete results. And then act to influence those outcomes.

Comments welcome.  See below.

1. https://nlihc.org/sites/default/files/gap/Gap-Report_2018.pdf

2. http://cfinsights.issuelab.org/resources/29571/29571.pdf

3. https://www.magnifymoney.com/blog/news/redlining-still-alive-five-star-bank-caught-fined-900k/

Resource Book:   “The Color of Law – A ‘Forgotten History’ Of How The U.S. Government Segregated America”