Ethnic Discrimination in the Private Rental Housing Market

This project used paired testing protocols, for the first time in Australia, to test for ethnic discrimination in the allocation of private rental housing. The Chief Investigators on the project were Professor Heather MacDonald (UTS), Professor Kevin Dunn (Western Sydney University), Professor Yin Paradies (Deakin University) and Dr Rae Dufty-Jones (Western Sydney University). The project was funded by an Australian Research Council Linkage Grant.

The Project

This project analyses a significant yet under-researched issue: the nature and frequency of ethnic discrimination in the rental property market. Using gold standard paired testing methods, this project assesses whether ethnic minorities (from the Indian sub-continent and Muslim Australians from the Middle East) are treated less favourably than Anglo-Australians when seeking rental housing, in order to inform policy debates about guaranteeing fair access to housing. Are there spatial variations across Sydney in discrimination? To what extent do key stakeholders perceive an issue of ethnic discrimination, and what remedies do they suggest?

Methodology

The definitive technique used to study discrimination in employment and housing contexts is paired testing. It has been used regularly by the U.S. Department of Housing and Urban Development to investigate progress on discrimination in both rental and purchased housing, since the late 1970s. The technique has been adapted for use in Canada (cited in Dion), Sweden (Ahmed & Hammarstedt, 2008) and Spain (Bosch et al. 2009).

Paired testing involves both an ethnic majority and a minority 'tester', with equivalent characteristics, applying for a rental property. A set of individuals are matched on as many relevant characteristics as possible, including: age, gender, income, education level, occupation and extroversion. This set of matched testers then go through the rental property application process and their treatment and outcomes are compared. Matched sets (pairs or triplets) of research assistants (RAs) or 'testers' allocated the same rental property and their experience during the rental seeking process is compared.

Data was gathered over a 15-week period in the Sydney metropolitan area (between August and November of 2013). Recruited 29 RAs to form 11 sets of testers (pairs and triplets). Pairs were made up of an Anglo-Australian tester, and either a Muslim Middle-Eastern or an Indian tester. The study sample included 537 random "tests", of which 369 resulted in completed inspections by both testers.

Findings

• Anglo testers were 4.3 times more likely than either Indian or Muslim Middle Eastern testers to be offered an individual appointment to view the property.
• Anglo testers were more likely to record having contact with the agent during the inspection.
• Anglo testers were more likely to be asked about their housing needs, and to be told about other available housing.
• Agents were more likely to explain the application form to Anglo testers, and to provide them with additional information beyond the standard elements.
• Anglo testers were nearly 2.5 more likely to be contacted by the agent after the inspection.

Conclusions so far

The differential treatment evident from the paired tests we conducted suggest that Anglo renters are systematically favoured in rental housing searches compared to their Indian and Muslim Middle Eastern counterparts. Adequate and appropriately located housing is critical to the life chances of contemporary urban dwellers. Housing is a scare urban resource, and real estate markets (of freehold and renting) are the main mechanisms used in Australia to match demand and supply. There will be inequalities in the provision of housing reflecting socio-economic variation, and this is inevitable in capitalist market system. However, differential treatment in such markets, across ethnicity for example, generates unnecessary and avoidable uneven-ness. Racism is defined as attitudes and actions that give rise to unnecessary and avoidable inequalities in opportunities and resources across ethnicity, race, culture or religion (Paradies et al. 2009). Our findings clearly indicate differential treatment between Anglo-Australians and Indian-Australians / Muslim Middle Eastern-Australians. This differential treatment has the potential for unfair outcomes in accessing rental housing across ethnicity.

As Australia's globally integrated capital cities continue to attract immigrants, more explicit attention to equity of access to such key resources as housing markets (which in turn mediate access to other social goods such as jobs, good schools, and liveable neighbourhoods), is essential to ensure Australia grows in a socially sustainable way.

Publications

Jacqueline Nelson, Heather MacDonald, Rae Dufty-Jones, Kevin Dunn & Yin Paradies (2015) "Ethnic discrimination in private rental housing markets in Australia", in Rae Dufty-Jones and Dallas Rogers (Editors) Housing in Twenty-First Century Australia: People, Practices and Policies, Farnham, Ashgate, ISBN 978-1-4724-3113-4.

Heather MacDonald (2016) A white face can be a big help in a discriminatory housing market, The Conversation, Feb 1st.

MacDonald H., Nelson, J., Galster G., Paradies Y., Dunn, Kevin M & Dufty-Jones R. (2016) "Rental Discrimination in the Multi-ethnic Metropolis: Evidence from Sydney", Urban Policy and Research, 34(4), 373-385 http://dx.doi.org/10.1080/08111146.2015.1118376.