The housing industry has weathered commission lawsuits, scandals and lackluster home sales in recent years. With the Trump administration’s aggressive rollback of Diversity, Equity and Inclusion (DEI) programs, there’s another reckoning for real estate and housing professionals.
Brokerages and housing leaders face critical questions about the future of fair housing to protect consumers. There’s also the question some are reluctant to answer: Do they stand by—or retreat—from the internal DEI initiatives they publicly lauded just a few years ago?
The Department of Housing and Urban Development (HUD) canceled $4 million in contracts promoting DEI initiatives, the agency announced February 20. HUD Secretary Scott Turner, in a news release, noted this is part of the department’s larger $260 million review of all contract expenditures.
“It is inexcusable the American taxpayer was footing the bill for the promotion of DEI propaganda,” Turner said in a statement. “Not only was this costing millions of taxpayer dollars, but it was also wasting valuable time that should have been used to better serve individuals and families in rural, tribal and urban communities. DEI is dead at HUD.”
Those cuts were just the beginning.
Fair Housing enforcement under threat
The Trump administration has begun terminating grants to organizations that enforce the Fair Housing Act by taking complaints, investigating and litigating housing discrimination cases across the country, according to news reports. In fact, these groups, mostly nonprofits, intake about 75% of all fair housing complaints.
HUD disburses these grants to private nonprofits that act as the frontline enforcement of federal anti-discrimination law. They educate communities on their rights, test whether landlords are racially discriminating, investigate complaints, resolve disputes and provide legal counsel.
“The program really exists because the fair housing laws don’t enforce themselves,” Maureen St. Cyr, executive director of Massachusetts Fair Housing Center, told the Associated Press. Her organization’s grant was among those terminated. “People need lawyers to make those rights a reality.”
The 2024 Fair Housing Trends Report, compiled by the National Fair Housing Alliance from complaints made in 2023, revealed these insights into consumers’ experiences:
- Consumers filed 34,150 fair housing complaints received by private nonprofit fair housing groups, HUD, Fair Housing Act programs and the DOJ in 2023. That’s up 3.5% from 33,007 in 2022.
- Private fair housing nonprofits processed the overwhelming majority (75.52%) of these complaints, up 5.68% from the previous year.
- Disability-related housing discrimination accounted for the majority (52.61%) of complaints filed.
- Consumers filed 1,521 complaints for harassment, a 66.23% increase YoY, while complaints based on color reached 824, up 35.30% over the same time period.
In addition to cutting grant funding, the administration eliminated the Affirmatively Furthering Fair Housing (AFFH) rule, a key Obama-era regulation. Instead of requiring localities to analyze barriers to equal housing choices or develop specific plans to remedy them, HUD will now only require a “general commitment” to take active steps to promote fair housing.
Fair housing advocates are fighting back.
Four organizations (including the Massachusetts Fair Housing Center) filed a class-action lawsuit on March 13 against HUD and the Department of Government Efficiency (DOGE) and on behalf of 66 fair housing groups that cover 33 states. The agencies’ Fair Housing Initiative Program (FHIP) grants—78 at last count—were cut off without notice or explanation, according to the National Low Income Housing Coalition.
The government’s abrupt termination of grants is “jeopardizing $30 million in congressionally authorized funding intended to counter housing discrimination and enforce fair housing laws,” the complaint noted.
Industry leaders stay mum amid anti-DEI push
Many real estate organizations and leaders have remained conspicuously silent as other business leaders take a decisive stance on DEI. When approached for interviews for this article, several major real estate brokerages and industry associations declined to comment or offered only broad statements.
The Mortgage Bankers Association (MBA) provided this statement: “Given the changing demographics of the country, where we expect the majority of homebuyers in the next few years to represent minority communities, it is imperative that our member companies are prepared to employ and serve a more diverse society. That is why MBA offers a number of resources for our members to utilize when developing their own strategic programs to ensure that they create a welcoming environment for their workforce and customers.”
RE/MAX and other companies similarly declined to participate. Teresa Palacios Smith, chief diversity, equity and inclusion officer with HomeServices of America, stated, “We remain committed to fostering an environment where all employees, clients and communities feel supported and valued.”
Similarly, Julia Lashay Israel, head of inclusion and belonging at Keller Williams, declined to answer specific questions. Instead, she shared this statement: “At Keller Williams, we celebrate our differences. We believe that each of us has the right to be our authentic self, live our true life and pursue the opportunities we have always believed were possible. Our mission is to be the empowering community we all deserve, where everyone belongs and everyone can thrive.”
Even the National Association of REALTORS® (NAR), which represents over 1.5 million members and has been vocal about diversity issues in the past, offered this response in lieu of an interview:
“The National Association of REALTORS® represents REALTORS® from every part of the country and every background. NAR’s Code of Ethics holds our members to the highest standards of professional conduct and to provide equal professional service to every client in compliance with fair housing laws to achieve the American Dream of homeownership. NAR also strives to foster a workplace where staff are valued, able to thrive professionally, and contribute their individual talents towards our members’ success.”
Rollbacks aim to correct DEI ‘overreach’
While diversity advocates take issue with the government’s blanket approach to dismantling DEI programs and funding, others view the changes as necessary corrections to overreach.
DEI programs may not be necessary if existing non-discrimination laws are properly enforced, said William Jacobson, Cornell Law School professor and founder of the Equal Protection Project of the Legal Insurrection Foundation, an anti-affirmative action nonprofit.
“As with other industries, it is necessary to comply with a variety of laws that ensure non-discrimination, including some that are specific to lending and housing practices,” Jacobson told RISMedia via email. “The core of such laws is that each person be treated equally without regard to race, ethnicity or sex. So long as that obligation is fulfilled, there should be no need to engage in what is commonly referred to as DEI.”
Jacobson added that while there is nothing unlawful about encouraging broad participation of different communities, problems arise when “such encouragement crosses the line into the exclusion of others based on race or ethnicity.”
On the Fair Housing enforcement question, Jacobson noted: “Certainly there should be enforcement of the non-discrimination laws, but if people are expecting that enforcement will create de facto racial preferences, they are going to be disappointed.”
Why businesses are abandoning DEI
Many companies (including those within real estate) made public commitments to DEI initiatives following the murder of George Floyd in 2020. Those commitments are now being tested as federal support for such programs erodes, creating a ripple effect on big names in tech, retail, banking and beyond.
Gary Acosta, co-founder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP), characterizes the Trump administration’s stance as a “war on DEI” rather than just a rollback.
“My own personal opinion about the way DEI has been characterized is very different than what we’re seeing from the media or seeing from this administration,” Acosta, one of the few who agreed to an interview, told RISMedia. “DEI was not about lowering the bar so that unqualified people can get jobs that they’re not qualified to have. DEI was created to address the fact that not everybody starts at the same place.”
Acosta continued: “To me, DEI was just smart business, good business as the country becomes more diverse, especially the younger generations. It just makes sense for companies to be attentive to that.”
Acosta sees current events as a clarifying moment for the real estate industry.
“I think in one way, it can be good in the sense that it’s going to be more clear who are the pretenders and who were the companies that really committed to this and believed in it,” he said. “The pressure that companies felt after George Floyd to do something along these lines got a lot of people to commit to things that they weren’t totally on board with.”
However, Acosta warned that people (consumers) will keep score. For instance, companies that walked back DEI initiatives abruptly after the Trump administration began its anti-DEI campaign have faced fervent public backlash. Target, in particular, has paid dearly for reversing course, seeing sharp declines in foot traffic, stock value and a boycott, according to multiple news reports.
“I think people will all remember the companies that truly believed in this and supported it, whether or not they did so in a public way, and which ones didn’t,” he said.
Business case for DEI remains strong
Despite the political headwinds, many industry professionals emphasize that the business case for diversity remains compelling, regardless of federal policy changes.
Justin Ziegler, president of the LGBTQ+ Real Estate Alliance, points out that DEI encourages different viewpoints while being attentive to the needs of consumers and employees alike.
“Employees and consumers are not homogeneous groups,” Ziegler said in an email interview. “In a nation that is becoming more diverse by the day, organizations enjoy numerous benefits when they ensure proper policies are in place to support all, and this helps to attract the most talented human resources. Having a diverse employee base positions companies to serve a larger, more diverse customer base.”
Jerry Ascencio Jr., broker/owner of Mission Real Estate/San Fernando Realty in San Fernando, California, said the rollback of DEI policies at the federal level hasn’t changed his approach because diversity has always been core to his business.
“In fact, as fewer companies prioritize DEI for financial reasons, I see even greater opportunities to stand out and attract top talent,” Ascencio tells RISMedia. “Regardless of policy changes, I remain committed to maintaining and strengthening these values.”
Ascencio emphasizes that DEI is a business strategy, not just a compliance issue.
“One of the biggest strengths of corporate DEI programs is that companies that truly embrace diversity see it as a major opportunity and profit center for their future,” he said. “The biggest misconception about DEI is that it’s just about fairness or avoiding backlash. The reality is that companies that prioritize DEI as a business strategy, rather than a forced obligation, position themselves for long-term success.”
Fair Housing concerns grow
The rollback of DEI initiatives and funding cuts to fair housing enforcement have raised concerns about potential increases in discrimination that could go unchecked.
In particular, Ziegler is deeply concerned about the impact on LGBTQ+ individuals.
“In the housing industry, it’s already legal to discriminate in 31 states based on sexual orientation or gender identity,” he noted. “Parents with an LGBTQ+ child in those states are helpless to protect their kid from being evicted or denied equal access to a rental or home, simply because of who they are as a human being.
“With the proposed cuts to HUD, I fear there will be no one to protect LGBTQ+ Americans from widespread housing discrimination.”
Ascencio echoes similar fears for immigrant communities.
“I am concerned that essential programs like FHA loans, as well as innovative lending solutions such as ITIN loans, will be among the first to be affected by this administration’s stance on DEI,” he said. “The consequences won’t just impact diverse and minority communities—they will have a ripple effect on the entire housing market, making it harder for many deserving buyers to achieve homeownership.”
It didn’t take long for Ascensio’s concerns to be realized. In late March, HUD announced all government-insured FHA loans would now require U.S. citizenship or permanent residency status to qualify, dealing a blow to many immigrant borrowers.
Acosta acknowledged that while overt, explicit discrimination isn’t as pervasive today as it was 50 years ago, implicit biases remain problematic.
“The remnants of redlining still exist today,” Acosta said. “Generational wealth has been impacted in a way that’s going to take a long time to reverse. There are communities out there that still are segregated through zoning.”
Looking beyond politics to business realities
With businesses across multiple industries feeling federal pressure to scrap DEI initiatives, real estate leaders and professionals might feel conflicted about what comes next. With the spring home-buying market off to a sluggish start, burgeoning economic uncertainty spawned by tariffs and increasing inflation has economists increasingly forecasting a recession.
Acosta advises companies not to be overly attached to specific terms or acronyms.
“DEI, as a term, has been weaponized. It’s been disparaged. It is probably a dead acronym,” he said. “Let’s not be overly attached to those superficial things.”
Instead, he suggests that companies reevaluate their programs to ensure they’re not pitting one community against another while keeping a long-term perspective.
“You don’t want to make short-term decisions that are going to have a long-term impact on your company,” Acosta advised. “Think about the long game here and what the viability and strength of your company is going to be in the long run, not just in the short run.”
Ascencio recommends real estate brokers be vigilant in watching out for fair housing violations.
“I would carefully monitor and document every conversation regarding pricing, availability, requirements, guidelines for acceptance, etc.,” he said. “I would have my agents on high alert and ready to report anything that looks like a fair housing violation.”
While the political debate around DEI continues, the demographic reality of the housing market remains unchanged. Latinos and other diverse communities continue to represent growing segments of homebuyers. Real estate professionals must decide how to respond to this shift in homebuyer demographics—regardless of federal policies.
As Acosta puts it, “If (companies) don’t (serve diverse markets), their competitors will. If the large companies pull back, smaller companies that are more nimble and more creative are going to step in and fill that gap.
“The companies that service that market segment smartly with good pricing, good marketing, good service, they’re going to gain in marketshare. The ones that don’t are going to lose.”