by Joyce S. Jowdy

Housing discrimination reaches beyond its victims and grasps on to our neighborhoods, town and cities as well. Its stranglehold may appear invisible to those who believe that today anyone can live wherever they choose.

While some of the more obvious signs of housing discrimination may appear vanquished by the civil rights struggles of the sixties, discrimination today has become more subtle and many systemic and institutionalized methods remain intact

During this year's fifth annual conference of the National Fair Housing Alliance. I had the opportunity to learn more about some of these systemic problems: what follows are but a few highlights of the topics covered and materials provided.

Insurance Redlining

Once again, the insurance industry was in the spotlight. Long-accepted reasons for denial or differences in treatment by the insurance industry are now coming under attack.

Insurance companies often claim applicants were denied because they don't meet the company's underwriting criteria. Some of the standards currently coming under fire are: the practice of only granting insurance if a property is valued under a certain amount; and charging more for coverage or offering less coverage on older homes (both practices affect properties which are often located in inner cities and areas which, because of residential segregation practices, have a higher concentration of African-Americans). It may also be indicative of unfair treatment when people are not offered fullcost replacement insurance.

According to speakers at the conference, while insurance companies often justify the above practices based on what they claim is increased risk, when asked for the data to support their assertions, none has been produced. It appears that this industry-wide house of cards - built on vague beliefs and often blatant discriminatory stereotypes - may be beginning to crumble at its base.

If no compelling business necessity is evident for insurance industry practices or policies and they adversely affect minority communities, they may constitute a violation of the Civil Rights Act of 1968.

Of course, there is also the fact that regardless of the nature of the policies, it is often the subjective way in which they are implemented which is discriminatory and unlawful.

In testimony presented before the House Subcommittee on Consumer Credit and Insurance (1993), Gregory Squires cited studies which showed that, whereas callers from white communities are generally quoted a price, offered a policy and enthusiastically encouraged over the phone, callers from minority communities are often told an agent is not available (ells are

frequently then not returned), not provided a quote over the phone, told an inspection will be necessary, and otherwise discouraged from pursuing a policy.

In his testimony. Squires also stated that a "...contributing factor [to the racial gap in, the availability of property insurance] is the perpetuation of racial stereotypes that dominates much of the thinking and subsequent behavior within the industry." He then related what a sales manager for the American Family Insurance Company advised several agents in 1988.

"Your persistency went down the sh***er ... Very honestly, I think you write too many blacks ... You gotta sell good, solid premium paying white people... they own their homes, the white works... Very honestly, black people will buy anything that looks good right now ... but when it comes to pay for it next time ... you're not going to get your money out of them ... the only way you're going to correct your persistency is get away from the blacks."


There are currently data disclosure bills pending in Congress. These bills seek to require insurance companies to report who they are writing policies for and under what terms. Provisions also include the reporting of underwriting guidelines and the disclosing

Many advocates for insurance reform believe that there should also be - as in the lending field - a Community Reinvestment Act for the insurance industry to combat urban disinvestment.

Lending Issues

The U.S. Department of Justice shared with conference attendees the methods and strategy employed in the Department's three-year investigation of alleged mortgage lending discrimination in Atlanta. The investigation mainly focused on the Decatur Federal Savings and Loan Association. DOJ alleged that the thrift. marketed services and products primarily to white residents and that its rejection rates for loans to African-Americans as compared to that of Caucasians was statistically significant and could not be explained by other nonracial factors. The suit has been settled for $1 million and 48 African-Americans who were turned down for loans will benefit financially. Richard Ritter of DOJ spoke strongly of the Department's commitment to investigate and prosecute large pattern and practice cases of lending discrimination.

Property Appraisals

A less frequently discussed area that impacts directly on a home-seeker's ability to obtain a mortgage (and thereby housing as well) is the property appraisal. Shanna Smith from the Alliance has stated that, "Allegations of discriminatory appraisal reports generally involve appraisals that report only negative comments about a neighborhood or house, use inappropriate "comparables," or undervalue the property."

Excerpt from September HOME Insight, Buffalo HOME