Racial Discrimination Without Racism: 8 Ways Well-Intentioned Landlords Get into Fair Housing Trouble

You don’t have to be a bigot to commit illegal discrimination.


You don’t have to be a bigot to commit illegal discrimination.


More than five decades after passage of the federal Fair Housing Act (FHA), the promise to end housing discrimination and segregation in America remains unfulfilled. The National Fair Housing Alliance (NFHA) estimates that more than 4 million people experience housing discrimination each year. Among the relatively small number of 31,216 complaints that were actually reported in 2021, nearly one in five (5,922 or 18.97 percent) allege discrimination based on race, making it the second most reported type of discrimination, behind only disability at 53.68 percent. The percentage of racial discrimination complaints has also been steadily rising, as have total complaints, according to the NFHA.

While the recent resurgence of racism has undoubtedly contributed to these trends, there are also more subtle forces at work. Discrimination comes in different varieties. While racism remains a force, the FHA has at least been effective in marginalizing the kinds of “whites only” and other in-your-face practices that existed before the law passed in 1968. Few would argue that most housing providers in 21st century America understand, accept, and seek to practice the principles of inclusion and equal opportunity. The problem is that people who mean well may still perpetuate racially based discrimination and segregation inadvertently. And if they do, they may be held liable for racial discrimination.

This month’s lesson is designed to help you recognize and avoid subtle and inadvertent forms of racial discrimination. First, we’ll explain what constitutes discrimination based on race and color banned by the FHA. Then, we’ll outline the eight kinds of problematic policies and practices that can get you into trouble while inadvertently perpetuating segregation. At the end of the lesson, there’s a quiz you can take to apply the principles to real-life situations.  


National Study Finds Widespread Racial Discrimination

The basis for concluding that racially based housing discrimination is a continuing problem comes mostly from statistical studies, fair housing complaint numbers, and anecdotal evidence. However, in 2021, the National Bureau of Economic Research (NBER) carried out a massive nationwide study to document the problem in terms of behavior. The researchers used artificial intelligence (AI) to create a bot to respond to online property listings from 8,476 property managers across the 50 largest metropolitan areas in the U.S. The bot was essentially a cyber tester that presented itself as a white, Black, or Hispanic rental prospect.

While results varied by region, the bot found that these characteristics did affect property managers’ responses. Specifically, 60 percent of the inquiries from white prospects received responses from the property manager, as opposed to just 54.4 percent and 57.2 percent, respectively, to those represented as being Black and Hispanic. This disparity in response rates between whites and Blacks was evident in all regions, with the gap ranging from 12 percent in the Midwest to 2.6 percent in the West.


The FHA bans discrimination in housing because of race and color (as well as religion, sex, national origin, familial status, or disability).

Meaning of Race and Color. Race refers to whether a person is white, Black, Asian, Native American or an Alaska Native, Native Hawaiian or Pacific Islander, or any combination of the above.

Color refers to the visible color of a person’s skin—that is, whether the person’s skin is light or dark. Color-based discrimination may apply to people of different races or the same race. For example, it would be discriminatory to lease to Blacks only if they have lighter skin tones.

Together, these characteristics are designed to cast a wide net that captures not just literally race and skin color but facial construction and other traits affecting our perception of “where a person comes from.” In addition, many people who assert complaints based on race or color also allege that the landlord engaged in national origin discrimination.  

Meaning of Discrimination. The ban on discrimination covers a wide range of conduct, including:

  • Refusal to lease, sell, negotiate, or otherwise making unavailable or denying an apartment or dwelling; 
  • Discriminating in the terms, conditions, or privileges of the rental or sale;
  • Discriminating in providing services or facilities related to the apartment or dwelling;
  • Making, printing, or publishing—or causing to be made, printed, or published—any notice, statement, or advertisement related to the apartment or dwelling that indicates discrimination, preference, or limitation; or 
  • Representing that an apartment or dwelling isn’t available for inspection, sale, or rental when it actually is available.


As we explained above, you don’t have to be a racist or bigot to commit racial discrimination. You can also run afoul of the law without meaning to. The key to compliance isn’t just good intentions but also an understanding of the law and the ability to recognize policies and practices that may constitute indirect and undeliberate discrimination. Here are eight common pitfalls to look out for.

1. Inconsistent Rental Rules & Practices

We don’t need to tell you that your rental decisions and policies must be completely color blind and in no way based on an applicant or tenant’s race. What is worth stressing is that compliance depends not just on what your policies say but how you implement them. Landlords with squeaky clean policies that could have been authored by HUD itself can still get into fair housing trouble by applying those policies inconsistently.

Example: A Tennessee rental community established a policy not to rent apartments to persons who had been convicted of certain serious felonies. While the rule might have been nondiscriminatory (we’ll talk more about using criminal history as a rental criterion later), the landlord still got hit with a $42,250 penalty because it relied on the standard to reject an African-American applicant while simultaneously accepting the rental applications of two white prospects with the same disqualifying convictions [U.S. v. Dyersburg Apartments, LTD, Tennessee, August 2019].

The need for consistency can’t be overemphasized. Keep in mind that HUD, state fair housing agencies, and advocacy groups routinely send testers to rental properties to unearth differences in the way prospects of different races are treated during the rental process. When white testers get better treatment than Black testers, it suggests discrimination, especially when those differences are substantial and practiced as a pattern. Testing often focuses on the differences in information prospects of different races receive about the availability of units.  

Example: A Long Island, N.Y., advocacy group sued a landlord for racial discrimination based on evidence that the community treated white testers more favorably. True, there were no available units. However, according to the complaint, rental agents regularly told white testers about units that were expected to become available soon while just telling Black testers that there were no vacancies. While denying the charges, the landlord concluded that discretion was the better part of valor and settled the case for $35,000 [Farmingdale Villas LLC, June 18, 2020].

2. Policies that Look Neutral But Have a Discriminatory Impact

“Disparate impact” is a form of indirect discrimination that occurs when policies or practices that appear neutral on their face have the effect of discriminating against a protected group, even if that’s not their intention.

For example, a policy not to lease to anybody with a criminal record might seem like a perfectly legitimate way to promote safety and security at your property. However, in 2016, HUD published guidance suggesting that such policies might also be a form of disparate impact discrimination. Citing the widespread racial and ethnic differences in the U.S. criminal justice system and statistics showing that Blacks and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites compared to their share of the general population, the guidance states that barriers to housing based on criminal records are likely to have disproportionate impact on minority home seekers.

Example: A New York City community claimed that its policy of automatically rejecting anyone with a felony conviction was nondiscriminatory because it applied to all applicants regardless of race, etc. A rejected Black applicant with a felony conviction contended that the policy had the effect of racial discrimination based on “empirical evidence showing that nationally, and in New York State, blanket bans on eligibility based on criminal history result in the denial of housing opportunities at a disproportionate rate for African Americans and minorities.” The court found that the statistical evidence was enough to warrant a trial and dismissed the owner’s motion to dismiss [Jackson v. Tryon Park Apartments, Inc. et al, No. 6:2018cv06238 - Document 17 (W.D.N.Y. 2019)].


The Dynamics of a Disparate Impact Lawsuit

In a disparate impact case, the plaintiff has the burden of making out what’s called a prima facie (pronounced “prima facey”) case by showing that the policy or practice in question has a discriminatory effect on the basis of race or other protected characteristic. Evidence of a disparate impact may include not just the plaintiff’s direct experience but also census and other demographic data, for example, the fact that the community entered into X percent fewer new leases with Black renters since adopting the policy. When and if the plaintiff makes out a prima facie case, the burden shifts to the landlord to show that:

  • The impugned policy serves a substantial, legitimate, and nondiscriminatory purpose; and
  • There are no less discriminatory alternatives for achieving that legitimate purpose. Thus, for example, maybe instead of automatically disqualifying applicants for any criminal offense, the landlord could limit the policy to convictions for violent crimes for which a pardon wasn’t granted.   

3. Inadvertent Steering

Steering is a form of discrimination that 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 perpetuates segregation across apartment communities, neighborhoods, towns, cities, and wider communities.

Steering may be deliberate or inadvertent. The latter is apt to occur when well-meaning leasing agents and property managers suggest where prospects should or shouldn’t live based on race and other protected characteristics. This may take the form of exaggerating the negatives of a property or suggesting where a prospect would be “comfortable.” Examples: A leasing agent makes the following remarks to a Black couple touring an apartment on a floor occupied by all white renters:

  • “I wouldn’t be comfortable leasing this unit if I were a person of color”:  
  • “You might be more comfortable on another floor”; and
  • “You might be more comfortable at other [a reference to more segregated] buildings in the neighborhood.”

Another variation on the theme is seeking to protect residents from discriminatory neighbors, for example, by deliberately not telling a Black family about a suitable vacancy to protect them from the overtly racist neighbor living next door. Giving bigots and racists veto power over who can lease from you makes you a co-conspirator in discrimination.  

4. Providing Racial Information to Rental Prospects

Discussing race during the rental process can get you into trouble even if the prospect raises the issue. This may happen when prospects ask questions about the race, color, etc. of the people living in the building or neighborhood. The question may be overt, such as “Are there any Black people in this building?,” or subtle, such as the “Do you think I’d be comfortable (there’s that word again) in this building?”

Prospects who ask these kinds of questions may be testers, genuine racists, or simply insensitive. In any case, you need to ensure that your leasing agents don’t take the bait. Specifically, they need to understand that answering these questions and discussing the protected characteristics of other residents with a prospect is a form of illegal steering regardless of who broached the topic. Best practice: The leasing agent should politely decline to answer the discriminatory question and notify the prospect of the community’s commitment to fair housing and equal opportunity. You may want to actually script the leasing agent’s reply:

“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].”

5. Using Discriminatory Buzzwords in Your Advertising & Marketing

The FHA bars indicating any “preference, limitation or discrimination” based on race, color, or other protected characteristic. HUD interprets the prohibition very broadly as applying to not just newspaper ads but also spoken, written, and online statements—including words, phrases, pictures, symbols, and other graphic images—that send the message that housing isn’t available to particular groups. In addition, liability is based not on what you mean but what you say and whether the communication would suggest an illegal preference to an “ordinary reader or listener.”

The starting point for compliance is to choose your words carefully and refrain from code language, dog whistles, or buzzwords that may send subtle messages of exclusion. That may include not only direct references to protected classes but also seemingly neutral words like “restricted,” “exclusive,” or “private.” As a reference, consider the following chart, which is based on government guidelines from the State of Oklahoma:


Red Light: Words & Phrases to Avoid


adult community* adult living*

adults only*

adult park*

African agile


alcoholics, no American Indian Appalachian



blind, no

board approval required




children, no/number

child(ren) (number of)




crippled, no


deaf, no


not suitable for

drinker(s), no


empty nesters*

English only

ethnic references

golden agers*

group homes, no


not suitable for

healthy only





impaired, no






landlord, (description)




membership approval req’d

mentally disabled, no

mentally ill, no


migrant workers, no







older person(s)*

one child



park rules,

must comply with


physically fit only


preferred community


Puerto Rican

quiet tenant(s)

(religious references)


retarded, no

seasonal workers, no

senior discount*

smoker(s), no

Social Security Insurance

(SSI), no

Spanish speaking stable



tenant(s), description of

two people

unemployed, no

white, white only

Yellow Light: Words & Phrases to Be Cautious with

55 and older community*

62 and older*



bachelor pad

close to

country club, near


couples only




female(s) only

female roommate

fisherman’s retreat

gay(s), no


gentleman’s farm

grandma’s house

golden agers only*


handyman’ s dream



ideal for…

lesbian(s), no

male(s) only

male roommate

man, men only

membership approval


Mormon Temple

mother-in-law apt.

nanny’ s room



one person

older person*

perfect for…

person(s), (number of)

play area, no


quality neighborhood




retirement home*

safe neighborhood

Section 8, no


seeking same


senior citizen(s)*

senior housing*

(sex or gender)


singles only

single person

single woman, man


straight only


students, no



two people

walking distance to…

woman, women only

Green Light: Acceptable Words & Phrases


alcohol, no

assistance animals only

bedrooms, (number of)

bus, near

convalescent home

convenient to

credit check required


desirable neighborhood

domestic quarters

drugs, no

drug use, no

Equal Housing Opportunity

family, great for

family room


golf course, near

great view

guest house

handicap accessible

hobby farm

kids welcome

luxury townhouse

master bedroom

membership available

(neighborhood name)



nursing home

places of worship, near

play area


private driveway

private entrance

private property

private setting

public transportation, near

quality construction


quiet neighborhood

references required


(school district)

(school name)

seasonal rates


security provided

senior discount*

single family home

sleeping area(s),

number of

smoking, no

(square feet)


traditional style

tranquil setting

verifiable income

view, of

view, with

wheelchair accessible

winter rental rates

* Senior housing may be exempt under the “housing for older persons” exception

6. Discriminatory Use of Human Models

In addition to words and phrases, pay attention to the images contained in your ads and marketing materials. Be especially careful about using human models, whether via video, photograph, drawing, or other graphic techniques, to express preferences for or against different groups. The classic example is a picture or video that uses all white models to portray your residents. Whether you realize it or not, such an ad sends the message that people of color aren’t welcome in your community.

Accordingly, HUD cautions that models used in display advertising campaigns “should be clearly definable as reasonably representing majority and minority groups in the metropolitan area, both sexes, and, when appropriate, families with children.” If used, models should also portray persons in an equal social setting and indicate to the general public that the housing is open to all without regard to race, color, religion, etc., HUD adds.

7. Using ChatGPT for Marketing Purposes

Like other real estate businesses, you may be using ChatGPT, Bard, Bing, and other generative AI products, a.k.a. chatbots, for marketing purposes, such as developing advertising strategies, analyzing housing markets, and generating property listings, ads, social media posts, and other marketing content. Just recognize that for all their potential benefits, chatbots contain flaws that make them risky to use for marketing and advertising.

Among these flaws is the possibility of hidden bias. Explanation: Data and algorithms built into chatbots may incorporate the subtle prejudices of the humans who create them. They can also learn prejudice from the way they’re deployed. For example, in 2018, Amazon stopped using an AI-based recruitment program after discovering that its algorithm skewed against women. The model was programmed to vet candidates by observing patterns in resumes submitted to the company over 10 years. Most of the candidates in the training set were men. As a result, the AI taught itself to prefer male over female candidates.

Discriminatory Content: Be aware of the risks and don’t use the content that chatbots generate for advertising and marketing unless and until somebody at your company with knowledge of fair housing laws carefully vets it to ensure it contains no hidden prejudices or biases.

Discriminatory Placement: Beware of relying on chatbots in deciding where to advertise. Explanation: Historically, landlords have perpetuated segregation by deliberately advertising only in certain publications or outlets that minorities targeted for exclusion are known not to use. This is a critical compliance issue because HUD and the courts interpret discriminatory advertising as including the selection of media or locations for advertising that deny particular segments of the housing market information about housing opportunities based on a protected characteristic. Examples include strategically placing billboard ads in predominately white neighborhoods and running newspaper ads in local publications read mostly by a white audience. Use of chatbots with sophisticated algorithms targeting highly specific audiences significantly increases the risks of inadvertently exclusionary ad placement strategies.

Bottom Line: Make a deliberate decision about whether you want your employees to use ChatGPT and other chatbots and for what applications. Then set out a written policy that clearly explains the banned and permitted uses and any applicable safeguards for the latter. Also include language addressing algorithm discrimination in your property’s fair housing and nondiscrimination policies. Ask your attorney about adapting this model language for your policy:

Model Language

Use of Chatbots for Marketing Purposes. Employees must be aware that Chatbot data and algorithms may contain hidden prejudices or biases or be based on stereotypes about people of certain races, sexes, age, religions, or other protected classes under discrimination laws. Accordingly, employees may not use Chatbots for purposes of recruiting, marketing, advertising, promoting, or tenant selection unless and until ABC Landlord’s legal counsel vets and verifies that those applications and tools relying on Chatbot data are fully compliant with applicable federal and state antidiscrimination laws and will not have the indirect effect of discriminating against groups or individuals that those laws are designed to protect.

8. Tolerating Tenant-on-Tenant Harassment

It goes without saying that you’re not allowed to harass rental applicants or tenants based on their race, color, or other protected characteristics. You also probably understand that you’re liable for harassment engaged in by your leasing agents, property managers, and other employees and agents. What you might not realize is that you may also be held legally responsible if one of your tenants harasses another tenant in the community on the basis of race, color, or other protected characteristics. Landlord liability for tenant-on-tenant harassment is an emerging issue, and the few courts that have addressed it have split.

Landlord Is Liable: The first case involved the tenant of an Illinois community who ruthlessly and continually harassed her lesbian neighbor over a 15-month period because of her sexuality. The victim complained repeatedly to the landlord. But instead of stepping in to help, management labeled her a troublemaker and plotted her eviction. So, the tenant sued. In a landmark ruling, the Seventh Circuit Court of Appeal (which covers Illinois, Indiana, and Wisconsin) held that the victim had a valid claim for tenant-on-tenant harassment against the landlord [Wetzel v. Glen St. Andrew Living Community, LLC, 901 F.3d 856 (7th Cir. 2018)].

Landlord Not Liable: The other major case came from New York and had similar facts but a totally different outcome. The tenant was the target of “a brazen and relentless campaign of racial harassment, abuse, and threats” from his neighbor. And as in Wetzel, the tenant’s appeals for help from the landlord fell on deaf ears. But unlike the Seventh Circuit, the Second Circuit Court of Appeals (which includes New York, Connecticut, and Vermont) ruled that landlords can’t be liable for tenant-on-tenant harassment, even if they know it’s taking place, because they don’t control tenants’ behavior. To rule otherwise, the majority reasoned, would force landlords to intervene in a wide range of common disputes between neighbors [Francis v. Kings Park Manor, Inc., 2021 U.S. App. LEXIS 8761, __ F.3d __, 2021 WL 1137441].

Bottom Line: Unless and until the U.S. Supreme Court rules on the issue, landlords in every state but New York, Connecticut, and Vermont may be liable for tenant-on-tenant harassment based on race, color, and other protected characteristics. But even though the law is unsettled, there’s more at stake than simply what the law requires. Ensuring a harassment-free housing environment where tenants don’t harass their neighbors is not only a moral but a business imperative, at least for landlords who care about the quality of their tenants’ lives.


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