Freeman

ARTICLE

How Fair Is Fair Housing?

Those Committed to Ending Housing Discrimination Should Use Noncoercive Means to Accomplish Their Ends

NOVEMBER 01, 1997 by GEORGE C. LEEF

Owning property used to mean that you had the right to do with it as you pleased. You could sell it, rent it, or give it away. You could also refuse to do so. Some people might be disappointed by your decision, but all they could do was to search elsewhere for what they wanted. There was no legal recourse for having been told “No.”

But now there is. Thanks to federal and state “housing discrimination” statutes, would-be purchasers and renters can collect damages if they can show that the owner “discriminated” against them, which means they were told “no” without what the government regards as a good enough reason. The government now casts a long and ominous shadow over the housing market. It is one more slash in the death of a thousand cuts being administered to property rights in America. Just ask John Hoffius.

Hoffius owns several apartments in Jackson, Michigan. He was approached by an unmarried couple who wanted to rent one of his units. He declined to do so on religious grounds, stating that he believed it was wrong for a couple to live together out of wedlock. He couldn’t stop them from cohabiting, but he could prevent them from doing so on his property. So he thought.

The couple filed suit, seeking damages of $10,000 each. Of course, they were not really harmed. John Hoffius took nothing of theirs. Their only damage was having devoted a small amount of time to applying for his apartment. Nevertheless, the misnamed American Civil Liberties Union and a bevy of “fair housing” groups joined in.

So far, two courts have ruled in favor of Hoffius, but the case is now on appeal to the Michigan Supreme Court. Even if he ultimately prevails, he will have lost, since defending the suit has cost him thousands of unrecoverable dollars. (The law allows the plaintiff to recover attorneys’ fees if he wins, but not the defendant.) But Hoffius has been fortunate. In California, Evelyn Smith lost a similar case when the California Supreme Court decided that forcing landlords to rent to unmarried couples did not put a “substantial burden” on landlords’ religious freedom.

Many housing “discrimination” cases are brought (or threatened) each year. Often, they are instigated by organizations like the Fair Housing Center of Metropolitan Detroit (FHCMD). The budget for FHCMD comes largely from the federal government, augmented by some private donations. It advertises for individuals who have “suffered discrimination” and, after learning about their experiences, usually sends in “testers.” If “discrimination” is found, then an FHCMD attorney contacts the owner to say that they will file suit unless the owner settles.

In the case of Darby v. Heather Ridge Apartments, the plaintiffs alleged racial discrimination. The Darbys, a black couple, sought to rent an apartment, but were informed that no units would be available for more than a month. However, white applicants were told that there were units immediately available. The plaintiffs sued and won $450,000 in damages.

Racial discrimination like this is both immoral and irrational. However, just because an act is immoral and irrational doesn’t mean anyone has been directly harmed (in contrast to more nebulous emotional hurt). Except for the loss of some time, the Darbys were no worse off than if they had never stopped at Heather Ridge. But they hit the jackpot with a jury that “wanted to send a message.”

Lawsuits Abound

That the law is simply viewed as a tool for enrichment is evident from Lawson v. Paragon Properties, in which a black couple applied for apartments at two different complexes. Within days, they had been accepted at one, but the other took three weeks to reject their application. Rather than simply move in where they’d been accepted, the Lawsons filed suit against the other complex and wound up with an award of $17,500. In cases like this, the law seduces people into needless, wasteful litigation.

Another fount of lawsuits is the legal obligation not to discriminate against people who have “disabilities” and need “accommodation” in housing. In Herzberg v. Plymouth Heritage Apartments, Cindy Herzberg sought to rent an apartment. But she needed an access ramp to the unit for her wheelchair. The owner said Ms. Herzberg would have to pay for the ramp, which would cost some $1,700. Herzberg cried “discrimination!” and the case wound up before a mediation panel that decided it was unreasonable of the owner not to want to spend $1,700 in constructing the ramp. The mediators tacked on an extra $10,000 in damages to teach the owner to be more sensitive.

Sometimes advertising provides the excuse to sue. In 1996, FHCMD won an arbitration award of $569,000 against the owners of Henry Ford Village in Dearborn. For more than two years, FHCMD had monitored the advertising of the Village. Among hundreds of ads, only one showed any nonwhite people. There was no evidence the complex treated whites and blacks differently, only that its advertising seemed to convey a preference for whites. The arbitrator ordered the company to shell out $469,000 over the next three years to hire a “manager of affirmative marketing,” retain a consulting firm to help devise an “affirmative marketing plan,” include an “Equal Housing” logo in all advertising, and pay FHCMD $100,000.

One can have sympathy for the objectives of groups like FHCMD even while abhorring their methods. Housing discrimination is offensive, but it is a rare phenomenon simply because it usually proves costly to the one practicing it. If a landlord has a vacant apartment and turns away decent, paying tenants because of something he doesn’t like about them, he loses revenue. There are nearly always others in the marketplace who are happy to rent to those who were rejected. “Fair housing” centers would perform a more valuable service if they assisted people who encountered discrimination to bypass it, by finding places where they would likely be accepted.

Unfortunately, however, discrimination suits hold out the prospect of great windfalls for plaintiffs, attorneys, and “fair housing” centers. Why do something peaceful but not very profitable when you can use the law to shake down property owners?

Persuasion, Not Force

Housing activists might respond that only the threat of lawsuits will change attitudes. Possibly so, although persuasion and positive incentives are usually more effective than force. In any case, an important part of freedom is tolerating those who do not share our values and beliefs. People have no more a right to use force to make people have the “right” attitude toward prospective tenants than to make people have the “right” attitude toward the Social Security System, opera, or immigration.

Instead, those committed to “fair housing” should use noncoercive means to accomplish their ends. If, for example, they have evidence that a landlord discriminates in ways they deem to be inappropriate, they could publicize this fact and organize a boycott. But doing so requires persuading other people to cooperate with you, and that is more difficult than convincing a few jurors to indulge in vicarious generosity. Moreover, those adamantly opposed to any kind of housing discrimination could cooperate to buy “bad” landlords out of not only their property, but the business entirely. If activists aren’t willing to put up their own money to achieve their objective, why should they be allowed to take the easy route of a lawsuit?

Like so many other pieces of statist legislation, the “fair housing” laws are misnamed. There is nothing fair about coercing people who have simply decided to contract in ways that some other people find objectionable. If all “fair housing” statutes were repealed, then housing activists would have to use their own time and money to assist those for whom they express so much concern.

ASSOCIATED ISSUE

November 1997

ABOUT

GEORGE C. LEEF

George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.

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