by Jordan Green


REPORTS TO BE PRESENTED AT PUBLIC HEARING ON THURSDAY Studies find barriers to housing choice for minorities


Blacks, Latinos and aspiring homeowners of other minority groups in Greensboro and High Point face significantly lower mortgage approval rates. Meanwhile, white renters are often steered away from minority neighborhoods, blacks seeking rental housing are more likely to not have their phone calls unreturned, and Latinos are shown preference in the rental market. Those are the findings of two studies conducted by UNCG sociology professor Stephen Sills. The Greensboro Community Resource Board will hold a public hearing on Thursday to hear comments on a report produced by the city’s housing and community development department that heavily relies on the two studies conducted by Sills. All three reports were financed by the city of Greensboro. Sills and others involved with the release of the reports emphasized that their findings should not be interpreted as evidence that mortgage brokers and property managers in the Triad hold racist attitudes, but that significant barriers to free housing choice persist.

“You’ve got so many factors playing here,” Sills said. “You’ve got the history of how [Greensboro] was segregated by race and class back in 1910. You had covenants barring black people from certain neighborhoods that came down in 1968. In the 1980s and 1990s, you had immigration that diversified neighborhoods, but it didn’t bring whites into the black neighborhoods, and it didn’t bring blacks to the white areas.” Still, Greensboro fares well in comparison to other cities across the country, according to a draft version of the “Analysis of Impediments to Fair Housing Choice Update, 2008,” prepared by the city as a requirement for receiving Community Development Block grants and other federally-funded monies from the US Department of Housing and Urban Development. The draft report noted that compared to the 50 largest US cities, Greensboro (which does not make the list) would be ranked near the top in black-white integration, just below No. 1-ranked Virginia Beach and No. 2-ranked Charlotte. Cities at the more segregated end of the spectrum include San Francisco; Austin, Texas; and Portland, Ore. Few will be surprised to learn that the study found that the most heavily segregated white areas of the Greensboro clung to affluent corridors along West Market Street and North Elm Street, while the most heavily segregated black areas of the city were concentrated in the southeast quadrant corresponding with city council District 1. The report did not include a spatial analysis of Hispanic-white integration. One of the reports authored by Sills and research assistant Elizabeth Blake noted that Greensboro and Winston-Salem are among 30 metropolitan areas with the largest number of blacks. “[The cities’] segregation levels are somewhat lower than most in the South and much lower than those in the North,” Sills writes. “Even though this area compares favorably to other cities with fairly large African- American populations, its segregation scores in the fifties and sixties mean that over half the African-American population would have to move in order to achieve perfect integration.” The study “found that white testers seeking to rent housing were steered away from minority neighborhoods and were often asked to ‘drive by first’ or told that it is a ‘mixed neighborhood.’ African-American testers were often blocked from access to available properties at the point of the phone call, and Hispanic testers were often shown preference.”

‘ “This is in southeast Greensboro. She didn’t say that to the Latina tester. To the white woman, she said, ‘We have far better properties across town. Why don’t you rent one of them?’ It’s a structurally segregated neighborhood. She’s acting as a gatekeeper for this structural segregation.” Sills said such differential treatment is in clear violation of the 1968 Fair Housing Act. The study found that three callers who were all African- American were told that a rental unit was no longer available when their counterparts were told that it was available. In other cases where researchers found differential treatment, the outcomes did not consistently favor whites. When different rent amounts were quoted for the same unit, minority testers were favored, but whites were less likely to be told they needed to make a deposit. Hispanics were more likely to be asked about family size. Whites tended to be asked about their occupations more often, and blacks were inordinately asked about their length of employment. The draft “Analysis of Impediments to Fair Housing Choice Update, 2008” recommends that the city of Greensboro create an enforceable local testing program, using a range of income-neutral applicants of different races, including testers who all have low income levels. An agreement with the city’s fair housing division stipulates that none of the research in the report produced by Sills can be used to launch enforcement activity against rental agents, and the report gives rental agencies fictitious names.

Sills’ report on mortgage applications found that blacks, Latinos and other minorities face similar disadvantages in home ownership. The report, “Factors Influencing Denial: A Study of Home Mortgage Disclosure Act Data for the Greensboro-High Point Metropolitan Statistical Area 2006,” found a “statistically significant” point difference of 15.4 percent in approval ratings for white and minority applicants. The report found that more than two-thirds of white applicants were approved, while only 54.9 percent of non-white applicants were approved. Among the 10 lending institutions responsible for processing the largest numbers of applications from nonwhite borrowers, four had point differences in the double digits, and local institutions topped the list. Sills’ examination of Home Mortgage Disclosure Act found that Winston-Salem-based Branch Banking & Trust was more likely to approve white applicants by 22 percentage points, while the differential for Charlottebased Wachovia Bank was 17 percentage points. Wachovia is currently in the process of merging with San Franciscobased Wells Fargo, which was found to favor white applicants by 14 percentage points. Countrywide Home Loans, which was recently acquired by Bank of America, reportedly favored white applicants by 16 percentage points. The report found that credit history was the most significant reason for the difference in denials, followed by an ambiguous category of “other” and debt-to-income ratio. In response to the findings in Sills’ report on home mortgage data, Branch Banking & Trust spokesman Bob Denham said his bank qualifies mortgage borrowers based on credit history, loan-to-value ratio and debt-to-income ratio. He added that the bank has traditionally maintained a conservative approach to lending, and had little participation in subprime-lending practices that qualified borrowers with poor credit history who were often unable to repay loans. The topic of Home Mortgage Disclosure Act data is sufficiently sensitive to Wells Fargo that the bank posted a “Frequently Asked Questions” sheet on its website. While it focuses on pricing differences rather than differences in declination, the sheet pledges, “Wells Fargo does not tolerate discrimination against any consumer. Wells Fargo is committed to equal access to credit for all, and our underwriting and pricing policies do not treat customers differently based on race, ethnicity or any other prohibited factor. Christine Shaw, a spokeswoman for Wachovia Bank, called the Home Mortgage Disclosure Act data “important and useful” information, but said it provides only a limited understanding of why some applicants are approved and others are not. “We’re committed to increasing homeownership,” she said. “We do a lot of extensive financial literacy and education that’s geared to understanding your credit score… to help [applicants] understand debt management so you can repair your credit score if you need to.” She added that all the bank’s lenders are trained in fairlending practices. Authors and recipients of the report alike have acknowledged that barriers to housing choice for minorities involve a thick stew of institutional practices and historical legacies. Jay Ovittore, who serves on a city-sponsored Fair Housing Joint Subcommittee, said other cities have achieved more inclusion of affordable housing in upper-income areas by “incorporating low-income units in these McMansions, where you couldn’t tell that it was any different, so it doesn’t take away from property values…. The city could pick up part of the cost of installing water and sewer in exchange for including more affordable housing.” Sills cautioned that such subsidies can promote sprawl because developers tend to build on the periphery where land values are the cheapest — and housing is the least accessible to poor people. “Looking at space and transportation — this gets into a social geographer’s realm — if we had more readily available mass transit in the city, it would allow more housing choices,” he said. “Let’s say there is a [federally subsidized] property available for a low-income renter in northwest Greensboro, someone without much money might not be able to afford a car to get there, and the bus service isn’t as good there. Simply by providing more mass transit, a low-income renter would be able to have a wider geographic field in which to hunt for homes. They might find a better standard home if they were able to reach it by mass transit.”

“In one case, someone showing a property said to a white tester: ‘Iknow this is illegal, but I wouldn’t rent this to you because of theneighborhood,’ Sills said.

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‘In one case, someone showing a property said to a white tester: ‘I know this is illegal, but I wouldn’t rent this to you because of the neighborhood.’ This is in southeast Greensboro. She didn’t say that to the Latina tester. To the white woman, she said, ‘We have far better properties across town. Why don’t you rent one of them?’ It’s a structurally segregated neighborhood. She’s acting as a gatekeeper for this structural segregation.’ — UNCG researcher Stephen Sills