4 Ways to Make Sure Your Rental Portfolio Promotes Diversity and Inclusion

Real estate investors can gentrify a neighborhood when they’re more preoccupied with what it will become rather than what it has to offer today. And white homeowners are in the majority. In 2020, 76% of white Americans owned their home, while 61.4% of Asian, Pacific Islanders, and Hawai’ian Natives, 51.4% of Hispanic Americans, and just 47% of Black Americans can say the same.

Investors seeking distressed or off-market properties may find themselves buying for long-term rental gains near metropolitan cities or in places where well-paying companies plan to develop. However, by the very nature of housing prices and urban development, these bargain deals are often in predominantly BIPOC-resident areas that have their own cultures and networks, which may be undervalued to investors but which are deeply important to the existing community’s resilience. Social science research from Brown University shows that racial segregation in American cities today is persistent and pervasive. In fact, a history of redlining and social segregation throughout the 1900s directly resulted in the low-income, predominantly Black and Latinx communities that are now being eyed for redevelopment.

Affordable and safe spaces for BIPOC people are ever-shrinking, so it is important to preserve affordable housing and to try to keep long-term, well-paying tenants. Given the wage gaps for recent immigrants, Black and Latinx women, and other vulnerable groups, housing displacement is a serious threat to BIPOC residents’ livelihoods and wellbeing. Even if your plan isn’t to live in the property yourself, be an active and respectful member of the existing community rather than a vocal advocate for completely transforming it.

While investors need to be conscious of labor costs, some are simply inevitable; the boiler needs replacing, the security system needs installing, the grass needs mowing. While it might seem convenient to automate these services by using a national vendor, consider ways to keep these jobs local and to hire diverse vendors who rely on such business.

Many cities have a Blackbook or another similar BIPOC- and women-owned directory of service providers. Online, there are many lists to help homeowners search for diverse and skilled specialists in areas such as landscaping, plumbing, accounting, real estate law, and architecture and engineering. It’s easier than ever to work with interior designers of color—such as notables Carlos Quintero or Delia Kenza—and to use BIPOC decor makers and lifestyle brands to furnish and fill your property. Consider every dollar you spend on your real estate portfolio as an opportunity to invest in a small minority- or woman-owned business.

All too often, landlords are experts in owners’ rights but less than clear about those of tenants. For holdover tenants (those who lived in the house before you bought it), keep in mind step two above. New landlords can disrupt fragile affordable housing ecosystems, so it is important to make rental decisions based on human dignity and leasing laws, rather than sheer accounting.

Food52 recently shared renter horror stories that seem stranger than fiction, but such accounts are more common than you might think. These nefarious, but not quite illegal, tactics are most prominent when owners are trying to push out lower-paying tenants in favor of higher-paying ones. Yet, elderly, differently-abled, or otherwise vulnerable tenants may think abrupt changes are more about their identity than their finances. It is illegal to discriminate against a tenant on the basis of race, gender, national origin, age, and other identifying features. If inherited tenants are just not working out, abide by legal processes to address lease concerns and try to properly rehouse them. Larger and newer buildings may be required to maintain ADA compliance, so build that into your maintenance plans.

Whenever renters turn over, or it’s time to fill a vacancy, be open to people of different backgrounds, cultures, and abilities calling your property home. Be wary of implicit bias in the tenant screening process, which might make you partial to select people of a similar background or demographic as you. 

Source: Better Homes & Gardens