The arduous quest for fair housing began more than 140 years ago with the passage of the Civil Rights Act of 1866 when Congress passed the first bill aimed at providing civil rights to freed slaves and those blacks who were born on U.S. soil. However, it took 100 more years (in 1968) before laws were passed to guarantee equal treatment in the area of housing.
Fast forward to today and the struggle for fair housing has bloomed to a fan of protected classes beyond color. The seven federal protected classes include color, race, national origin, sex (gender), religion, familial status and disability. On the state and local level, however, jurisdictions have created even more classes to protect against housing discrimination.
What most people fail to grasp at first glance is that every person on the planet meets at least six of the federal classes. Only disability is a unique class of consumers along with many of the state and local classes that have been established. All people have a color, race, nation of origin, gender, religion (even secular humanism, i.e., atheism, has been determined to be a religion in the eyes of the U.S. Supreme Court); and a family status -- having or not having children.
But in the eyes of the law, these classes go deeper than most consumers realize. I would like to think that most of us would not want to discriminate intentionally against another person who wants to buy, sell or rent a house. Most examples I hear from attendees to my fair housing course are based in innocent ignorance of the law and what constitutes discrimination vs. customer care. However, ignorance is not defense against discrimination charges.
I've heard as innocent as, "Well, I don't want my buyers to feel uncomfortable in a predominantly white (black, Asian, etc.) community," to as blatant as, "Well, no one in a protected class could afford this house, anyway."
I've also come across private sellers (for sale by owners) who don't understand that the Fair Housing Law is NOT just for real estate agents. They think they can sell their house (or not sell it) to whomever they want and they can just slip a contract or rental agreement in the trash because of some other reason besides financial qualifications and terms of the contract.
In the U.S., we mostly hear of cases of fair housing violation involving race. Interestingly, the fastest rising form of discrimination is disability. Again, it's not from blatant disregard of the law but of some sort of reasoning that "this house isn't right for them."
If you're going to get in the real estate investing business, the HUD.gov site needs to become one of your favorites. Here, you can get access to the Office of Fair Housing and Equal Opportunity (OFHEO -- just click the Fair Housing link on the left side of the screen. Here you'll find links on how to avoid violating fair housing laws.
Where you really have to be careful, however, is on the state and local level. The seven classes are only starting points. For instance, consider the fair housing classes in Washington, D.C. In addition to the seven federal classes, D.C. also protects these groups of home dwellers: age, marital status, sexual orientation, personal appearance, gender identity or expression, family responsibilities, matriculation, political affiliation, source of income, place of residence or business.
The safest route for investors is to treat real estate investing as a business – look at the financials and background checks (credit, rental history, income) as your basis of renting or not renting someone your house. If they haven't broken the law, have good credit and income, and have a good history of taking care of a property -- then rent to them. It's not just abiding by the law, it's also just good business.