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Fred on Forbes

Prejudice And Discrimination: NYC Brokers And Co-Op Boards Need To Change

“I just cannot bear the thought of having one of them over me.” These (paraphrased) words from a Southern woman after the election of Barack Obama to the presidency characterize a whole subculture of discrimination against African American families, which remains a deeply embedded dark side of American life.

As real estate agents, our profession must move beyond these prejudices, bringing the clients who still adhere to them along with us. New York State has, in the wake of the scandalous Newsday stories about steering and red-lining on Long Island, recently enacted stricter laws regarding Fair Housing disclosure to all parties. While laudable, this cannot fully address the subtle ways in which co-op boards and, more importantly, real estate agents often exacerbate the problem.

During the early 1980s, the question of black Americans rarely came up, since so few had benefited from the wealth-creation opportunities that enabled them to apply to these buildings. I do vividly remember bringing an African-American couple, very well qualified, to a Central Park West apartment. When I called to make an offer on their behalf, the seller’s agent responded by saying, “I can’t believe you’re doing this to me!” Similarly, the whole real estate world was abuzz in 1992 when Reginald Lewis, the CEO of TLC Beatrice and one of the few black billionaires of the time, bought an apartment at 834 Fifth Avenue, perhaps the fanciest building in New York.

In theory, the laborious and paper-intensive co-op board application process is meant to demonstrate only two factors: the buyer’s financial capacity and neighborliness. In practice, it has never been that simple.

Boards represent the tenant-shareholders who inhabit their buildings, and many of these shareholders hold firmly to social ideas which seem more 18th century than 21st century. There was the older lady, married into a famous WASP family, who sighed when I called to make an appointment to show her Fifth Avenue penthouse and said, I suppose they’re Jewish? Or the owner who called me after a showing to ask if the elegant African-American woman to whom I showed the apartment was the maid.

As independent contractors, agents only receive payment when they have successfully closed a deal. That makes many agents highly risk-averse. Most would prefer not to take the chance of running into possible board issues by proceeding with a purchaser who is in any way outside the expected lines. African-American, Latino, disabled. Too many children (sometimes more than none is too many). Until recently, unmarried partners. Until recently, single women (who knows who they might marry?) or younger men (wild parties). Until recently, gay couples. Any experienced New York agent has seen co-op boards or landlords discriminate against members of every single protected class described in the New York City Fair Housing guidelines. And while it’s getting better, it’s far from over.

Our tolerance for prejudice needs systemic change. It starts with education, of landlords, tenants, and co-op Boards of Directors. All participants must understand that Fair Housing guidelines apply to everyone. If you are the landlord of a single small building, you must comply. If you are on the board of a private co-op corporation, you must comply. Educating people who sometimes don’t want to be educated requires courage. And this is where the real estate professional comes in: We need the courage to push back.

As agents, we are on the front lines every day, confronted with these issues. We must all, managing agents and brokers alike, refuse to sanction prejudice, even if ignoring it seems easier, even if, this time, it doesn’t touch us directly.

Real estate professionals cannot change the whole world, but we can change our part of it. It’s time we did.

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