Real Estate Terms

The Fair Housing Act of 1968: What You Need to Know

The Fair Housing Act of 1968 prohibits discrimination against protected classes in the housing market. 

If you’re hoping to ace your exam and become a real estate pro, you’ll need industry experts to teach you about vital concepts like the Fair Housing Act. Luckily, you’ve come to the right place to educate yourself on fair housing laws and how they fight discrimination. 

In this article, we’ll define the Fair Housing Act of 1968, give examples of how it works in real estate, and do a deep dive into the history surrounding it. Keep reading to learn more! 

What Is the Fair Housing Act of 1968?

The Fair Housing Act of 1968 (FHA) protects buyers and renters from discrimination when looking for housing. Also known as Title VIII of the Civil Rights Act, the FHA prohibits real estate professionals from treating individuals with protected characteristics unjustly. 

Who Does the Fair Housing Act of 1968 Protect?

The five protected characteristics covered by the federal Fair Housing Act (1968) include:

  1. Race
  2. Color
  3. National origin
  4. Religion
  5. Sex (sexual orientation and gender identity)

Let’s take a closer look at each protected class to understand how the FHA defends its rights. 

Fair housing laws make it clear that real estate professionals and housing providers cannot discriminate based on race. For example, if a real estate agent tells a minority that a house has been sold but continues showing the home to other people, this could indicate racial discrimination. 

The Fair Housing Act also states that everyone, regardless of their skin color, has the right to fair housing and housing opportunities. If a landlord only rents out homes to white tenants, this could indicate that they discriminate against renters based on skin color. 

Housing providers also cannot discriminate against homebuyers and renters based on their ancestry, culture, and national origin. If a real estate agent refuses to work with buyers from a particular country or region, then they are discriminating against a protected class. 

According to the FHA, homebuyers should also have access to housing opportunities regardless of their religious beliefs. If a real estate agent were trying to steer a Muslim buyer away from a white neighborhood, this could be a violation of the Fair Housing Act. 

Sex is another protected class under the FHA, which includes sexual orientation and gender identity. This means that housing providers cannot treat same-sex couples or transgender individuals differently than they would anyone else. 

The History Behind the Fair Housing Act of 1968

To fully understand the significance of this act, we need to understand the history leading up to it. The civil rights movement started in the 1950s and paved the way for the Fair Housing Act of 1968. Let’s look at some significant laws and acts that made the fight for fair housing possible. 

The Civil Rights Act of 1964 and 1966

At this time, racism and segregation were still rampant in the United States. That’s why the Civil Rights Act of 1964 was designed to prohibit discrimination and segregation in public places. The protected characteristics under this civil rights act included race, color, religion, sex, and national origin, paving the way for the Fair Housing Act four years later. 

The Civil Rights Act of 1966 also set an important precedent for civil rights, stating that individuals cannot discriminate against the same protected characteristics (with the addition of economic status) in the selection of federal jurors. 

These fundamental civil rights acts’ helped introduce the idea that the federal government would not tolerate racial discrimination in public, federal court, or the housing market. 

What Types of Housing Does the FHA Cover?

The Fair Housing Act protects most housing types for home seekers with protected characteristics. Examples include

  • Single-family homes
  • Multifamily homes
  • Apartments
  • Condos
  • Mobile homes
  • Nursing homes

Essentially, if a property constitutes a dwelling or place of residence, there’s a strong chance that interested buyers and renters are protected under the FHA.

Who Does the Fair Housing Act Not Protect?

While the Fair Housing Act and its amendments cover a lot of ground, it’s important to note that this act doesn’t cover all housing types. 

Examples of housing not covered under the FHA include 

  • Apartment buildings with less than five units
  • Single-family housing sold without a real estate agent
  • Housing for religious organizations 
  • Hotels and motels
  • Private clubs

It’s also important to note that the federal Fair Housing Act does not consider the following attributes to be protected characteristics:

  • Age
  • Citizenship status
  • Lawful occupation
  • Lawful source of income
  • Marital status
  • Partnership status
  • Status as a veteran or military service member
  • Status as a domestic violence or stalking victim

This means that the HUD will not penalize housing providers for discriminating against home seekers with these characteristics. However, fair housing laws vary from state to state, so it’s essential for real estate professionals to know if they are conducting business in a state where any of these groups are protected.  

Examples of Fair Housing Act Violations

Real estate professionals must understand which behaviors violate the Fair Housing Act and contribute to housing discrimination.

That’s why we’ve compiled a list of examples of FHA violations, some of which include 

  • Refusing to show minorities houses in certain neighborhoods
  • Charging renters with children additional fees
  • Refusing to repair a tenant’s unit because of their sexuality
  • Suggesting that minorities live in an area with other minorities
  • Harassing a homebuyer because of their religious beliefs
  • Sexually harassing a female tenant 

Penalties for Violating the Fair Housing Act

Why should a future real estate professional such as yourself avoid violating the FHA? According to the Department of Housing and Urban Development, penalties for violating the FHA include 

  • $16,000 for a first-time violation
  • $37,500 if a previous violation has occurred in the last 5 years
  • $65,000 if two previous violations have occurred in the last 7 years

In cases where home providers use force or the threat of force to violate fair housing laws, the penalties are more serious, including possible time in prison. 

Frequently Asked Questions

Where Did the Fair Housing Act of 1968 Fall Short?

While this act played a significant role in the fight for fair housing, it still had a long way to go.

For example, the FHA failed to protect all vulnerable categories of homebuyers, including families and people with physical or mental disabilities. The FHA was also rarely enforced by the necessary departments, so it lacked effectiveness and strength.

As a result, the Fair Housing Act of 1986 failed to eradicate housing discrimination, leaving protected classes vulnerable to unjust practices from real estate agents and landlords.

What Is the Fair Housing Amendments Act of 1988?

Luckily, the Fair Housing Amendments Act came along in 1988 to strengthen the FHA and added two additional groups to its protection. 

Can you guess who these new protected classes were? That’s right, home seekers with children or disabilities were now protected under fair housing law thanks to this amendment. 

The Fair Housing Amendments Act of 1988 prohibits real estate professionals from discriminating against homebuyers or renters based on familial status. For example, if a landlord tries charging tenants extra for having young children, this violates the FHA. 

The Fair Housing Amendment also prohibits home providers from discriminating against people with disabilities. For example, if a landlord is selling apartments that are not accessible to renters in wheelchairs, they are violating the law until reasonable accommodations are made.  

Who Enforces the Fair Housing Act?

The Department of Housing and Urban Development (HUD) is the federal agency responsible for enforcing fair housing laws and penalizing violators.

The HUD’s Office of Fair Housing and Equal Opportunity (HFEO) investigates all housing discrimination claims to check if the civil rights of protected classes are being violated. 

Anyone who feels they have faced discrimination can contact the HFEO, and violators will be fined or imprisoned by the federal government after the investigation is complete. 

Is Housing Discrimination Still A Problem? 

You may think that housing discrimination is a thing of the past thanks to the Fair Housing Act, but sadly this is not the case. 

The National Low Income Housing Coalition (NLIHC) conducted a study showing that housing discrimination is still a malignant problem in the United States.

This study revealed that African American and Hispanic renters received fewer responses than white renters, suggesting landlords still discriminate based on color, race, and national origin. 

Now let’s look at one of the most notable recent housing discrimination cases to see how this issue manifests in real life.

In 2018, the National Fair Housing Alliance filed a lawsuit against Facebook for allowing real estate agents to run ads that discriminated against protected classes.

Facebook gave landlords and agents the option to create pre-populated lists excluding certain races, families with young children, and other home seekers with protected characteristics. 

While the outcome of the lawsuit positively impacted fair housing laws, it’s proof that housing discrimination is still an issue today and possibly even more exacerbated by Big Tech. 

What Is the Equal Credit Opportunity Act?

We can’t fully discuss fair housing without also discussing the Equal Credit Opportunity Act. The Equal Credit Opportunity Act (ECOA) protects borrowers against discrimination when applying for home loans, making this act a valuable fighter against housing discrimination. The ECOA states that credit and lending companies cannot treat individuals with protected characteristics differently than anyone else.

Examples of ECOA violations include:
-Asking for information regarding a borrower’s marital status
-Denying a loan to a borrower because of their religious affiliations
-Charging minorities with higher interest rates
-Excluding women from credit opportunities because of their gender

How Real Estate Professionals Can Fight Housing Discrimination

As a future real estate professional, it’s your responsibility to combat housing discrimination and ensure equal housing opportunities for all. 

Real estate agents can help promote fair housing by taking the following actions: 

  • Staying up to date with state and federal fair housing laws
  • Refusing to work with businesses that do not follow fair housing laws
  • Using appropriate, nondiscriminatory language in listings
  • Ensuring sellers are not violating the rights of protected classes
  • Preparing to be tested at any time
  • Treating all clients equally

What to Know Before the Real Estate Exam

You can’t expect to pass the real estate exam if you aren’t an expert on the Fair Housing Act. This act plays a key role in upholding fair housing rights and ending discrimination against protected classes. 

Now that you’re well-versed on how the Fair Housing Act protects consumers, it’s time to study other key real estate terms. Take advantage of our Real Estate Flashcards so that you’ll breeze through the big exam with no problems!

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