LULU GARCIA-NAVARRO, HOST:
This country has a big racial gap when it comes to home ownership. According to the Urban Institute, 72% of white Americans own their homes. For Hispanics, it's just 48% and for Black Americans, 42%. It's a problem that's been shaped by lending practices, generational wealth, urban planning and, in a small way, by love letters. Deena Prichep reports.
DEENA PRICHEP, BYLINE: A few years ago, Heather Barnhart and her husband, Karl, were selling their first home. The offer was lower than they were hoping for, and they were going to walk away. But then the realtor handed over a letter from the prospective buyers.
HEATHER BARNHART: I guess we just wanted someone to love the house as much as we did.
PRICHEP: And this couple said they did. They were young, looking to build a life together.
BARNHART: I said to Karl, this reminds me of us 10 years ago, and that influenced us.
PRICHEP: Letters like these have become common, especially in hot markets. Chris Bonner has been selling homes in Portland, Ore., for over 30 years.
CHRIS BONNER: Homeownership kind of is that meeting of finances and emotion, and I have definitely seen firsthand that sellers are very swayed by the stories of the buyers.
PRICHEP: Stories that say, I love your home. I want to build a life here. I'm like you. But the impact isn't always positive.
BONNER: I've had buyers who did not get their offer accepted. They were the highest offer. I confirmed with the listing agent that the terms were best. And they said to me, well, my seller just didn't think they were a good fit for the neighborhood. And so that was a really chilling thing to hear.
PRICHEP: Bonner doesn't think it's a coincidence that these were non-white buyers making an offer in a predominantly white neighborhood. Other realtors, like Portland's Chris Guinn III, have similar stories.
CHRIS GUINN III: My niece and her husband were writing an offer, and the agent asked me a weird question. They go like, well, do you have a picture of them?
PRICHEP: Now, discriminating on the basis of race or gender or family status is illegal under the Fair Housing Act, but it can be hard to prove and sometimes hard to see, even for the people doing it. Professor Justin Steil studies urban inequality and racial justice at MIT.
JUSTIN STEIL: These types of letters introduce a possibility for discrimination, either conscious, intentional discrimination or, probably more commonly, unconscious, unintentional discrimination.
PRICHEP: And that bias happens in a landscape that's already skewed.
STEIL: We have segregated and unequal neighborhoods but also really unequal rates of home ownership and unequal rates of household wealth.
PRICHEP: The National Association of Realtors has warned about love letters' potential to allow discrimination, and the state of Oregon just became the first to restrict them. Representative Mark Meek sponsored the bill. He's also a realtor.
MARK MEEK: Something very small and simple like this could allow folks that are looking for homes to have an opportunity based on their qualifications and not necessarily, you know, what they look like and their family makeup.
PRICHEP: These patterns and practices run deep. Oregon came into the union with laws that prevented Black people from settling in the state.
GUINN: This was supposed to be, for lack of a better term, a white homeland. You couldn't even be a slave. They didn't want anybody here that looked like me.
PRICHEP: Realtor Chris Guinn III says it's understandable that potential buyers want to tell their stories, especially when they can't outbid other offers. But he's seen that they can do more harm than good.
GUINN: I won't miss it. You know, if they got a preapproval letter, that's one hell of a love letter.
PRICHEP: Systemic problems take systemic solutions. Removing love letters and that personal bias is a small step, but it's one that Oregon lawmakers hope can help write a more equitable future. For NPR news, I'm Deena Prichep in Portland, Ore. Transcript provided by NPR, Copyright NPR.