November 20, 1998

Cuomo Announces Groundbreaking Nationwide Audit of Housing Discrimination Around Nation

Washington — Housing and Urban Development Secretary Andrew Cuomo announced the most comprehensive and sophisticated nationwide audit ever conducted to test for and evaluate housing discrimination in urban, suburban and rural communities around the nation.

"This historic audit will help us fight housing discrimination more effectively," Cuomo said. "By determining the extent and scope of housing discrimination in greater detail than ever before, the audit will help us give all American families the opportunity to exercise their legal right to move into any neighborhood and any home they can afford."

"It is disturbing that after 30 years of fair housing enforcement, we still need to fight this fight, but report after report, complaint after complaint, only confirms for us the need for this comprehensive, nationwide audit," Cuomo said.

Cuomo said the audit, which will cost $7.5 million in the current fiscal year, will include 3,000 to 5,000 tests for housing discrimination. It will use African Americans, Hispanics, Asian/Pacific Islanders, and Native Americans to examine and evaluate patterns and trends in housing sales, rentals, and mortgage lending to minorities.

Nothing that this year represents the 30th anniversary of the Fair Housing Act, which outlaws housing discrimination, Cuomo said: "Housing discrimination is much more insidious today than it was two to three decades ago. Minorities not only face slammed doors but revolving doors as well; doors that keep them moving in circles that lead nowhere but to confusion and frustration. If we are serious about ending housing discrimination, then we must understand and recognize its complexities and subtleties."

The audit will be the nation's most expansive, thorough, and sophisticated examination ever conducted of minority discrimination in the economic marketplace, Cuomo said. He said it comes at an important time in the nation's history, as society becomes more diverse and the number of minorities grows at a rapid pace.

The HUD audit was endorsed by the Mortgage Bankers Association. MBA Executive Vice President Paul Reed said: "The Mortgage Bankers Association of America welcomes this initiative by Secretary Cuomo to conduct this comprehensive audit. As the leading source of mortgage loans for homeowners in America, MBA supports all efforts to open the doors of homeownership."

In response to a request from President Clinton, Congress increased HUD's fair housing budget by 33 percent for current fiscal year to $40 million, after Cuomo drew national attention to the problem of housing discrimination through a number of fair housing enforcement actions brought under the Fair Housing Act.

A few examples of specific patterns and trends that will be evaluated in the audit include: steering minorities to certain neighborhoods and lending institutions; discriminatory treatment of low-income minorities versus higher-income minorities; and discriminatory comparisons of one race or ethnic group versus another.

HUD has developed testing methods for housing discrimination over the past 20 years. The type of testing that will done in the audit announced today will use testers of all racial and ethnic backgrounds who will pose as prospective renters or homebuyers. The tests will approach the same set of rental and sales firms, responding to the same newspaper ads. Testers are matched on background and education characteristics, differing only by racial/ethnic background. The ads are randomly selected from the most recent Sunday newspaper, and each tester inquires about the same specific housing unit, whether home or apartment. Using standardized forms, the testers then record the specifics of their interactions with agents; the types of assistance offered, the number and locations of units shown, terms and conditions, and more. Statistical analysis is then used to determine major patterns of discrimination.

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