October 2, 2023

Steering in Real Estate: What Is It and How to Avoid It?

The Fair Housing Act prohibits a housing provider from steering or influencing a prospect’s choice of residence based on race, nationality, color, religion, sex, familial status, or disabilities - all these are categories qualified for special protection under the law. 

It is crucial to note that the Fair Housing Act is legally binding in every state. But some states provide additional protected categories, such as age, sexual orientation, gender identity, citizenship, immigration status, marital status, and military status. Potential tenants may invoke these protected categories if they find the landlord violating them. 

Landlords can be susceptible to complaints and violations by the lack of knowledge regarding specific housing laws applicable in their state or the additional protected categories in these laws. 

Definition of Steering

Steering is a violation of the Fair Housing Act. Two elements constitute a steering violation: 1) An attempt to influence a prospect’s choice of residence, and 2) the attempt of the housing provider to sway the prospect’s decision in relation to the latter’s protected categories. 

Even if the effort on the part of the housing provider to influence the prospect’s choice of residence does not cause injury to the latter, it can still be considered illegal steering. Even if the landlord does it with good intentions, steering is still a violation of the law. Therefore, all forms of steering are violative of housing laws. 

Numerous fair housing cases involved housing providers who were well-intentioned and simply wanted to help housing applicants. But, it is crucial to keep in mind that applicants have the freedom to choose where they prefer to live. It is a general rule that housing providers must respect, and if the protected categories are used to justify influencing, redirecting, or discouraging prospects, it would be clearly a violation. 

Examples That Constitute Illegal Steering

  • You should fit in this property since many African-American residents are living here.
  • Complaints from other residents will increase if you live on the first floor since you have several kids.
  • Your surname sounds like Jewish. Maybe prefer to live next to a Jewish family in our apartment. 
  • You should pick a property closer to younger residents since we do not like party noises in our area.
  • Sorry, we do not have available rental units on the first floor for people with physical disabilities. Maybe you can choose another rental property. 

Dealing with Questions That Could Lead to Steering

There are some advantages when a prospective tenant asks questions to the leasing agent. It is helpful for landlords to know from potential tenants regarding their specific preferences in a rental property. However, as a landlord or a leasing agent, be wise in responding to questions or statements that could lead to steering. 

Do not address inquiries that contain or mention protected categories under the Fair Housing Law. In such a case, you can tell the prospective tenant that it is risky to answer or discuss such questions or statements. You should make the prospect understand that you are only limited to discussing availability and the applicant’s preferences that are not based on protected categories. 

Addressing questions relating to protected categories could have an encouraging or discouraging effect regardless of the prospect’s motive. Your response would constitute an element of illegal steering. Moreover, you should not attempt to protect a prospect from residents because the latter harbor bias towards the prospect’s protected categories because that would also be considered steering. 

Another topic that is risky to discuss or respond to is local or neighborhood schools. Experts advise that landlords and leasing agents should be more prudent in responding to such inquiries since it can lead to describing the racial characteristics of the school. Housing providers must only limit themselves to relating known facts about the school and avoid giving their personal opinions to prevent the act of steering.

Best Practices When Showing Vacant Rental Units

A clear policy concerning how you show vacant rental units can help prevent any appearance of steering. Showing rental units that have been without occupants for the longest time is one best practice. 

It is also an excellent idea to keep notes outlining the areas of the neighborhood the prospect requested and their preferential reasons if your policy is to show units based on the prospect's responses to interview questions. 

In this manner, you will have the necessary proof to back against any steering-related claims made against you. 

Final Thoughts

Every landlord's or leasing agent's responsibility is to lease empty rental units. The best way to persuade a prospect to rent a unit is to employ sales strategies like presenting amenities or brand-new equipment. 

The protected categories of either the potential tenants or the current inhabitants should never be discussed while trying to influence a prospect's housing decision. Every employee working in the housing industry should undergo proper training to understand illegal steering and how to avoid it.