South-Suburban Housing Center v. Bd. of Realtors

• Decision Date: 27 April 1989
• Docket Number: No. 83 C 8149.,83 C 8149.
• Citation: 713 F. Supp. 1068
• Parties: SOUTH-SUBURBAN HOUSING CENTER, an Illinois not-for-profit corporation, Counter-Defendant 7-21-84, v. GREATER SOUTH SUBURBAN BOARD OF REALTORS, an Illinois not-for-profit corporation, National Association of Realtors, an Illinois not-for-profit corporation, Counter-Plaintiffs, Cross-Plaintiffs, v. CITY OF BLUE ISLAND, Village of Calumet Park, City of Country Club Hills, Village of Glenwood, Village of Hazel Crest, Village of Matteson, Village of Park Forest, Village of Richton Park, Village of University Park, Counter-Defendants.
• Court: U.S. District Court — Northern District of Illinois

713 F. Supp. 1068

SOUTH-SUBURBAN HOUSING CENTER, an Illinois not-for-profit corporation, Counter-Defendant 7-21-84, v. GREATER SOUTH SUBURBAN BOARD OF REALTORS, an Illinois not-for-profit corporation, National Association of Realtors, an Illinois not-for-profit corporation, Counter-Plaintiffs, Cross-Plaintiffs, v. CITY OF BLUE ISLAND, Village of Calumet Park, City of Country Club Hills, Village of Glenwood, Village of Hazel Crest, Village of Matteson, Village of Park Forest, Village of Richton Park, Village of University Park, Counter-Defendants.

No. 83 C 8149.

United States District Court, N.D. Illinois, E.D.

December 19, 1988.

As Corrected April 27, 1989.

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Robert C. Johnson, C. Mark Kingseed, Sonnenschein, Carlin, Nath & Rosenthal, Alexander L. Polikoff, John R. Hammell, Chicago, Ill., for plaintiffs.

John B. Murphy, Ancel, Glink, Diamond, Murphy & Cope, P.C., Chicago, Ill., for Village of Hazel Crest, City of Country Club Hills, Village of Matteson, Village of Richton Park, Village of Park Forest.

Paul L. Pawlowski, Ronald I. Kammer, Hinshaw, Culbertson, Mollmann, Hoban & Fuller, P.C., Chicago, Ill., for Country Club Hills.

Philip C. Stahl, Darrell J. Graham, Grippo & Elden, Chicago, Ill., for Greater South Suburban Bd. of Realtors and National Ass'n of Realtors.

Cary A. Horvath, Chicago, Ill., for Village of Calumet Park.

Thomas S. Moore, Frank K. Neidhart, Jr., McCarthy, Duffy, Neidhart & Snakard, Chicago, Ill., for Village of University Park.

James R. Schirott, John T. Elsner, Schirott & Elsner, Itasca, Ill., Richard Hoskins, Thomas Quinn, Barbara Hermansen, Schiff, Hardin & Waite, Chicago, Ill., for Blue Island, Glenwood & University Park.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

LEINENWEBER, District Judge.

COMPLAINT

FINDINGS OF FACT¹

1. Plaintiff in this action is the South Suburban Housing Center, an Illinois not-for-profit corporation ("SSHC" or "Housing Center"). The SSHC carries on its activities within a Chicago, Illinois suburban area that is described in No. 4 of these Findings of Fact. The SSHC states that its purposes are to "promote and encourage multi-racial communities in the South Suburbs" of Chicago and "promote open housing to all people regardless of race." (Tr. 170, 346-47, Klepper; PX23) The SSHC's activities include providing assistance to homeseekers, "testing" for discriminatory real estate practices and suing those found to be engaged in such practices, conducting fair housing educational programs for realtors, apartment rental agents and the public, and assisting various government units in carrying out fair housing efforts. (Tr. 190-92, 215, 253-59, 266-67, 259-61, 286-89, Klepper) Christine Klepper ("Klepper") has been the Executive Director of the SSHC from 1980 to the present. (Tr. 190, Klepper)

2. The first named of two defendants in this action is the Greater South Suburban Board of Realtors² (the "GSSBR" or the "Board"). The GSSBR, an Illinois not-for-profit corporation, is an association of licensed real estate brokers and salesmen and a local affiliate of the other named defendant in this action, the National Association of Realtors ("NAR"). (Counterclaim, ¶ 3) The GSSBR carries on its activities within approximately the same Chicago, Illinois suburban area in which the SSHC operates, and operates therein a real estate multiple listing service ("MLS") that is described in Nos. 25-27 of these Findings of Fact. Robert Turpin ("Turpin") was Executive Vice President of the GSSBR for "close to twenty years" and the chief operating officer of the GSSBR MLS at all times relevant to this action. (Tr. 625-27)

3. The second named defendant in this action is the NAR, an Illinois not-for-profit corporation, and an association of licensed real estate brokers and salesmen which provides policy guidance and materials and services of various sorts to its local affiliates, including the GSSBR. (Counterclaim, ¶ 2; Tr. 1471-80, North) William D. North ("North") was Senior Vice President and General Counsel of the NAR from 1980 to 1986, at which time he became Executive Vice President of the NAR. (Tr. 1459-63, 2114-15, North)

4. Both the SSHC and the GSSBR carry on their respective activities within approximately the same area in south Cook County and a small portion of northern Will County, Illinois. The area referred to (the "South Suburban Area") includes approximately thirty-seven municipalities and is bordered on the north by the southern border of the City of Chicago, on the west roughly by Harlem Avenue or Interstate 57, on the south roughly by the northern border of Will County (except that a few Will County communities are included in the South Suburban Area), and on the east by the Indiana state line. (Tr. 171-72, Klepper; Tr. 373-75, Pearson)

The South Suburban Area

5. As of 1970 the suburban communities south and southwest of Chicago had almost no black residents, including the communities immediately west and northwest of the South Suburban Area, Alsip, Burbank, Bridgeview, Chicago Ridge, Evergreen Park, Hickory Hills, Hometown, Oak Forest, Oak Lawn, Orland Park, Palos Hills, Palos Park, Palos Heights, Tinley Park, West Haven and Worth (collectively the "Southwest Suburban Area"). (MX500A; MX481A and 481C) In the South Suburban Area however several small communities, such as Robbins and Phoenix, had virtually all black populations from their inception; a few communities, such as Blue Island and Chicago Heights, had substantial black enclaves for many years; and a few others, such as Park Forest and University Park, had growing non-negligible black populations. Id.

6. During the period from 1970 to 1980 some communities in the central corridor of the South Suburban Area, directly south of the south side of Chicago, experienced substantial racial change while communities to the east and to the west continued to have negligible black populations. (Tr. 6843-48, Orfield; Tr. 1107-08, K. Williams; MX500A) For example, by 1980 the population of University Park had become 44.3 percent black; the population of both Harvey and Markham had become about two-thirds black; and the population of Calumet Park and Chicago Heights had become 30 percent and 28.8 percent black, respectively. (MX500A) In municipalities immediately adjacent to these communities there was also significant racial change; the populations of Country Club Hills, Hazel Crest and Matteson each changed from less than one percent to approximately 12 percent black. Id.

During the same decade some communities in the eastern portion of the South Suburban Area and the entirety of the Southwest Suburban Area remained with negligible black populations. (Tr. 1107, K. Williams; Tr. 6845-46, Orfield; MX481A and 481B; MX500A) Racial enrollment data for elementary school districts indicates that since 1980 the same pattern of racial change has continued and in some cases accelerated in communities in the South Suburban Area, while the black population of the Southwest Suburban Area has remained negligible. (Tr. 6860-62, Orfield; MX480-81, 481A, D and E)

7. These racial settlement patterns in the South Suburban Area, where historically all white areas experience integration and are subsequently threatened with resegregation, result from a complex mix of market forces. These market forces include racial prejudice: some whites and some blacks prefer to live in segregated communities; the belief that high concentrations of blacks result in a drop in home values; the expectation that an integrated community will eventually become segregated; and housing search practices that are reinforced by certain real estate practices. (Tr. 621; 4483-84; 6809-10)

8. Certain real estate practices tend to exacerbate the problem. Realtors, like any salesmen, adopt marketing strategies that will maximize sales at minimum effort. For example, since realtors make more money selling in house listings, realtors push these houses. Since black realtors tend to have listings from black clients³ they tend to push listings in black or integrated neighborhoods to their prospects who also are mostly black. White realtors push listings in white neighborhoods to their white customers for the same reasons. (Tr. 350; 363; 1115; 7588-92).

Advertising strategies complement these sales efforts. Realtors advertise in the communities in which they expect to make the most sales. This means black realtors advertise in black communities and white realtors in white communities. (Tr. 73; 1115-16; 2653-61; 6069)

In short, realtors have little incentive in promoting integration for the sake of integration. They are interested in making sales. Accordingly, they are followers and not leaders of change in housing patterns.

9. In order to counter these market forces and to promote integrated living in the South Suburban Area, the SSHC has attempted to influence the housing market by encouraging the sales and marketing of real estate in what it terms to be "non-traditional" ways, i.e., encouraging whites to move to black or integrated areas and blacks to move to white or integrated areas. (Tr. 202-07)

Plaintiff's Definition of "Affirmative Marketing"

10. "Affirmative Marketing", according to plaintiff, consists of race conscious efforts to promote integration or prevent segregation through special marketing of real estate to attract persons of particular racial classifications who are not likely to either be aware of the availability or express an interest in the real estate without such special efforts. Affirmative marketing is multi-racial in that it approves of and encourages efforts to attract whites to racially integrated areas as well as blacks to racially segregated areas. (PX27)

11. "Affirmative Marketing" insofar as it involves special outreach to whites is controversial and has among its most vociferous critics some mainline black organizations who feel that such...