How to Steer Clear of Illegal Steering

Contrary to popular belief, housing segregation remains alive and well not just in specific regions of the U.S. but across America. So concluded HUD upon completing its most recent review of the state of fair housing in the U.S. “Real estate agents and rental housing providers recommend and show fewer available homes and apartments to minority families, thereby increasing their costs and restricting their housing options,” concludes the 2013 report.

HUD also found that the problem exists in both the home buying and rental markets. Specifically, the report found that, as compared to white renters who contact a rental agent:

  • African Americans are told about 11 percent fewer units and shown 4 percent fewer units;
  • Latinos/Hispanics are told about 12 percent fewer units and shown 7 percent fewer units; and
  • Asian Americans are told about 10 percent fewer units and shown 7 percent fewer units.

Surprised? How can this continue to happen in a country where housing discrimination and segregation have been illegal since 1968, you may wonder.

Part of the answer is that while overt discrimination has become relatively rare, more subtle forms of discrimination continue to thrive. And as they continue over time, they perpetuate institutional segregation. Of course, these subtle forms of discrimination are every bit as illegal as the overt kind. The problem is that they’re also much harder to detect and root out. And because these forms of discrimination are so subtle, it’s easy for property owners, managers, and leasing agents who are otherwise committed to equal housing principles to engage in them unintentionally and inadvertently.  

This month’s lesson deals with one of the most widespread and pernicious forms of subtle discrimination: steering. First, we’ll explain what steering is and how it occurs. And then we’ll set out seven rules to ensure that your leasing agents don’t engage in conduct that constitutes steering. We’ll finish up the lesson with the Coach’s Quiz so you can see how well you learned the material.   


The federal Fair Housing Act (FHA) bans discrimination on the basis of race, color, religion, sex, handicap (disability), familial status, or national origin. (To avoid having to list these traits over and over again, we’ll refer to them collectively as “protected characteristics”). Also keep in mind that federal FHA requirements are minimum standards and that many states have adopted their own fair housing laws that extend protections to other protected characteristics, which may include:

  • Sexual orientation;
  • Gender identity;
  • Source of income;
  • Criminal record;
  • Political belief;
  • Creed; and/or
  • Military status.

Forms of unlawful discrimination include, among other things:

  • Refusing to sell, rent, or negotiate for the sale or rental of, or otherwise make available, or deny housing to a person on the basis of protected characteristics [FHA, Section 3604(a)];  
  • Offering different and less favorable terms, conditions, or privileges of the sale or rental of housing due to a person’s protected characteristics [FHA, Section 3604(b)];
  • Making notices and statements or engaging in advertising for the sale or rental of housing that indicate a preference on the basis of protected characteristics [FHA, Section 3604(c)]; and
  • Making discriminatory misrepresentations about the availability of housing [FHA, Section 3604(d)].

Steering may run afoul of any one or combination of Sections 3604(a), (b), (c), and/or (d), depending on the situation. It occurs when a landlord tries to influence rental prospects’ choice in housing based on their protected characteristics. Steering is illegal because it limits prospects’ choices and denies them the opportunity to buy or rent the housing they choose. Practiced on a wider basis, steering also maintains or creates segregation across apartment communities, neighborhoods, towns, cities, and wider communities.

Part of what makes steering so widespread is how easy it is to conceal. And those very same qualities make it easy to commit accidentally. Nobody would object to the principle that housing providers refrain from trying to influence a person’s housing choices on the basis of protected characteristics. But applying this no-influence principle to real-life situations is very tricky. After all, aren’t leasing agents supposed to provide prospects with information about the apartment so they can decide whether it’s suitable for them?

Steering is all about balancing these competing dynamics. Nobody is suggesting that leasing agents be banned from providing information and answering questions about a property so that prospects can decide whether renting it is right for them. The key to avoiding steering is ensuring that leasing agents don’t carry out these information-sharing responsibilities in a way that influences the prospect’s decision on the basis of his or her particular race, color, etc. And that’s easier said than done. The seven lessons below will enable you to help your leasing agents steer clear of steering.   


Rule #1: Don’t Tell Prospects Where to Rent Based on Protected Characteristics

Steering isn’t always subtle. Sometimes it’s as obvious as a punch in the face. The two most common forms of overt steering:

  • Making verbal remarks like “we don’t lease to Black people” or “we don’t have anything suitable for kids or people with disabilities”; and
  • Displaying apartments on the basis of protected characteristics such as not showing any units on “adults-only” floors to prospects with young kids.

While these things are enough to make any fair-minded landlord cringe, regrettably, they still happen. And rest assured that if any of your leasing agents were to engage in that kind of conduct, fair housing testers will eventually catch them. At that point, you’ll be looking at not just liability but also potential punitive damages running into six- or even seven figures.

Example: An Atlanta real estate firm and its leading agent had to pay $160,000 to settle steering charges for showing white testers homes in predominately white neighborhoods and Black testers homes in Black neighborhoods. The smoking gun: The agent allegedly told one tester, “I wasn’t sure where to take you because I couldn’t tell over the phone whether you were white or Black.”

Rule #2: Don’t Try to Influence Prospects’ Choices Based on Protected Characteristics

A more common form of steering is to say things to discourage prospects from renting from you (or where in the building to rent from you) or encouraging them to rent from somebody else on the basis of their protected characteristics. Examples of things leasing agents should never say (all of which come from actual HUD cases where landlords were found guilty of steering):

  • “I think there are other apartment communities in town that cater more to kids”;
  • “We have a few apartments in the back of the building for people with wheelchairs”; and
  • “I wouldn’t be comfortable renting in this neighborhood if I were a young single woman.”

Rule #3: Don’t Tell Prospects Where They’d Be “Comfortable”

Notice the word “comfortable” in the last bulleted example above. One of the most common forms of steering is seeking to influence prospects’ choices based on where they’d be most comfortable. The problem is what the word “comfortable” implies.

The critical assumption that’s dangerous to make and even more poisonous to act upon is that people are more “comfortable” and “compatible” with people of their own race, color, etc. Accordingly, telling prospects that they’d be uncomfortable in your community or more comfortable somewhere else suggests that you’re trying to influence them on the basis of their protected characteristics. This conduct constitutes illegal steering even when leasing agents genuinely believe they’re acting in the prospects’ best interests.

Another variation on the theme is seeking to protect residents from discriminatory neighbors, for example, by deliberately not telling a Jewish family about an otherwise suitable vacancy to protect them from the virulently antisemitic neighbor next door. Giving bigots, racists, anti-Semites, and the like veto power over who can lease from you makes you a co-conspirator in discrimination.  

Rule #4: Don’t Answer Discriminatory Questions or Heed Discriminatory Demands

In some cases, the impetus for steering comes not from the leasing agent but the prospect considering the property. One form of this is when a prospect asks questions about, say, the race or color of residents in the community—for example, where a white prospect asks, “Are there any Black people living here?” A more subtle way to pose the question is for prospects to ask a leasing agent, “Do you think I’d be comfortable (there’s that word again) in this community?”

Prospects who ask these kinds of questions are probably either: (1) testers sent to monitor your community’s compliance with the FHA; or (2) genuine racists or bigots. In either case, make sure that leasing agents don’t take the bait. Specifically, make sure they understand that discussing the protected characteristics of other residents with a prospect is a form of illegal steering, even when the prospect brings up the topic.

Note that the same principles apply when a prospect makes discriminatory demands, such as insisting on being shown only units on floors where none of the residents are of a particular race, color, etc.

The best practice for these situations is to have the leasing agent politely decline to answer the discriminatory question or heed the discriminatory demand and tell the prospect of your community’s commitment to fair housing and refraining from discrimination. It’s also a best practice to script the leasing agent’s “we-don’t-discriminate” reply. Language to consider:

“I’m sorry but I’m afraid I can’t answer that question. Please understand that ABC Community is an equal housing opportunity provider committed to complying with all federal, state, and local fair housing laws. ABC does not discriminate against any person because of race, color, religion, national origin, sex, familial status, disability, or [other personal characteristics protected by state or local fair housing law].”

In some cases, the leasing agent may even be able to explain why the prospect’s question or demand is discriminatory and persuade him or her to rephrase or retract it.   

If instead of a direct question about a protected class, prospects ask whether they’d be comfortable renting from you, instruct leasing agents to turn the question around and ask the prospect what he or she means by “comfortable.” If the prospect’s response is nondiscriminatory and not based on the characteristics of the people in the community or neighborhood, the leasing agent can proceed to answer the question. But if the prospect’s response suggests any discriminatory biases, such as, “I’m comfortable with young people” or “I’m uncomfortable around kids,” they should refuse to answer and recite the above statement.  

Rule #5: Don’t Limit Prospects’ Choices Based on Their Kids’ Safety

Leasing agents must understand that it’s not their responsibility to try to talk prospects out of making unsound decisions about where to rent. This instinct of leasing agents to want to protect prospects against themselves is most likely to manifest itself when prospects want to rent apartments that would be unsafe for their young children—for example, units located on an upper floor or right next to a pool with no lifeguard.

A 1992 in-house legal memorandum from HUD’s Fair Housing Division clearly states that denying or trying to discourage families with children housing on the basis of safety is illegal steering. According to the memo, the FHA requires “housing providers to make all units, including units on upper floors and units with balconies, available to families with children.” It also bans the practice of making families with children sign waivers of liability not required of other residents.

Example: In 2017, the U.S. Department of Justice (DOJ) accused the owner and operator of a New Hampshire community of using the safety argument to steer the mother of an infant child away. According to the complaint, the community had a safety policy of placing families with children under the age of 10 in first-floor units only. And since no first-floor units were available, they turned the mother away rather than showing units that were available on the upper floors. Rather than risk a trial, the owner and operator agreed to shell out $25,000 to settle the case.

While ruling out the practice of not showing apartments to families with children on the basis of safety, the HUD memo goes on to say that it’s okay for housing providers to make “factual statements about perceived hazards of their property,” as long as:

  • Those statements are “truthful and not misleading”;
  • The statements don’t indicate a “preference, limitation, or discrimination” based on familial status; and
  • An “ordinary listener” wouldn’t interpret the statements as discouraging families with children from deciding to live in the apartment community or building.

Coach’s Tip: The 1992 HUD memo also clarifies that the FHA doesn’t ban housing providers from imposing “reasonable health and safety rules designed to protect minor children in their use of facilities associated with the dwellings,” such as requiring adult supervision of young children using a swimming pool without a lifeguard.


Steering & Schools

While it might seem like the most natural and innocent thing in the world, discussing neighborhood schools with rental prospects can be a steering liability minefield. That’s because phrases such as “a school with low test scores” or “communities with declining schools” have become code words for racial and other differences to the extent there’s a correlation between the quality of the schools and the racial or ethnic composition of the neighborhood. Similarly, praising the schools in one neighborhood while discretely saying nothing about the schools in another may have the same steering effect.

With this in mind, the National Association of Realtors (NAR) has devised best practices for avoiding steering when discussing schools. And while the recommendations are targeted to real estate brokers, many of them also work for leasing agents on how to avoid steering when talking to prospects about the quality of schools in the neighborhood, including:

  • Offer facts, not opinions or personal judgments;
  • Keep a list of websites and other sources of objective information about the schools in your area to which you can refer prospects so they can make their own judgments; and
  • Ask prospects to clarify their criteria; for example, if they ask whether the schools are “good,” have them describe the standards they believe makes a school good so you can point them to appropriate sources of information.

Rule #6: Don’t Exaggerate a Property’s Drawbacks

Another common way to exert improper influence is to draw attention to or exaggerate the drawbacks or flaws of your property. Such behavior, which runs contrary to the leasing agent’s mission to make your community look good, is powerful evidence of a motive not to rent to the prospect. And when that prospect has one or more protected characteristics, it strongly suggests that discrimination is the driving force behind that motive.

Example: The owner of an Arizona community is determined to maintain a peaceful and quiet “adult” community to attract retirees. Recognizing that categorically refusing to rent to prospects with children is illegal, the owner comes up with a plan to discourage them from doing so by creating a list of all the things that make the property unsuitable for young children. It then instructs leasing agents to go through the list with all prospects that have young kids. Result: The owner—and leasing agents who actually implement the plan—have committed illegal steering.  

Rule #7: Don’t Direct Prospects to Particular Buildings or Areas Based on Protected Characteristics

One particularly egregious, institutional, and still common form of steering is to assign prospects or residents to a particular section of a community or floor of a building because of a protected characteristic. Examples can range from limiting all residents with wheelchairs and/or families with children under a particular age to the ground floor to actual segregation and maintaining separate buildings for Black and white residents. If you don’t believe these things actually happen nowadays, we can cite literally dozens of cases to persuade you otherwise. Here are just a couple of recent examples:

Example: In May 2020, the DOJ filed a lawsuit against a Georgia management company for allegedly steering elderly and disabled African-American rental prospects away from Cedarwood Village, a predominantly white housing complex for elderly persons and persons with disabilities, and to Cedartown Commons, a predominantly Black general occupancy complex.

Example: In January 2021, the DOJ charged a Massachusetts housing authority of steering African-American prospects away from three overwhelmingly white properties that it manages and steering white applicants from two of its disproportionately Black properties in an effort to keep all of these communities racially segregated [United States v. J & R Associates (D. Mass.)].


Give Your Marketing Materials an FHA Audit

You may be engaging in steering without realizing it by including language or images in your marketing materials that indicate preferences on the basis of protected characteristics. Statements like “No Children” or “Singles Only” are obvious examples. However, indications of discriminatory preference may be far more subtle, such as characterizing a property located in a predominately white area as being “traditional” or even noting that it’s located next to a particular church. Here’s a list of marketing Do’s and Don’ts that comes straight out of HUD guidelines:

Steer Clear of Discriminatory Marketing



*Describe the property using factual and objective terms like:

  • Two bedrooms
  • Walk-in closets
  • Spectacular views

*Describe the amenities:

  • On-site fitness facilities
  • Community pool
  • Basement storage

*Include a disclaimer noting that you don’t discriminate on the basis of race, color, religion, sex, familial status, disability, national origin, and any additional personal characteristics protected under the fair housing laws of your state

*Use the fair housing logo

*Describe what you’re looking for in a renter, such as:

  • Great for young couple
  • Single adults preferred

*Describe the people in the neighborhood:

  • Catholic neighborhood
  • Large Hispanic community

*Describe the neighborhood in terms of churches, synagogues, or other landmarks that could suggest a preference for or against people with a protected characteristic

*Include an explicit preference or limitation based on a protected characteristic, such as:

  • No children
  • Christians only


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March 2021 Coach's Quiz