New York State Real Estate Salesperson Licensing Exam

Which practice involves directing potential buyers to or away from certain neighborhoods based on their race or ethnicity?

1. Steering

2. Redlining

3. Blockbusting

4. Racial profiling

The correct answer is: Steering

Steering is the practice of guiding potential buyers toward or away from specific neighborhoods based on characteristics such as race, ethnicity, or other protected classifications. This discriminatory practice can manifest when real estate agents or companies provide varying opportunities for housing based on these identities, rather than the individuals’ needs or preferences. This undermines the principles of fair housing and can perpetuate segregation and inequality within communities. In the context of the Fair Housing Act, steering is illegal, as it violates the rights of individuals to access housing without bias based on race, color, religion, sex, national origin, familial status, or disability. Other terms listed have different meanings. Redlining refers to the discriminatory practice of denying services to residents of certain areas based on the racial or ethnic composition of those neighborhoods, often linked to lending and insurance. Blockbusting involves inducing homeowners to sell their properties at a loss by instilling fear that a neighborhood is changing due to the arrival of minority families, leading to profit from reselling to new buyers at a higher price. Racial profiling is a broader concept related to law enforcement practices based on race, which does not specifically refer to housing. Thus, steering is the most accurate term for the practice of directing buyers based on race or ethnicity.