Radical
Statistics
The neglected evidence of housing market discrimination in the Netherlands
Manuel B. Aalbers
Introduction
The last seven years the Netherlands has seen a large number of reports in residential and ethnic segregation (1). The Report on minorities 1995 (Tesser et al, 1995) by the Social and Cultural Planning Office (SCP) a government agency doing independent scientific research witnessed a trend of rising concentration of ethic minorities. Concentration means that ethnic Dutch and ethnic minority people lead a separate existence in many ways. In other words, concentration implies segregation. For many, concentration and segregation have a negative ring to them. People associate concentration areas with deterioration and decay, and segregation with social isolation and a dearth of social opportunities.
The Report on minorities 1995 portrays two types of neighbourhoods that can serve as models for the possible future evolution of concentration districts: the socially mobile neighbourhood and the poverty ghetto. The traits of the socially mobile neighbourhood are much like those of the concentration districts of Southern and Eastern European immigrants to the United States in the early twentieth century. The mobile neighbourhood forms the starting point from which immigrants incorporate themselves into their new society. The mechanism that fosters their integration is social differentiation. In socially mobile neighbourhoods a socially stratified mono-ethnic community forms which affords new generations a structure for upward social mobility. As an end result of social differentiation, ethnic minorities spatially fan out and socially intermingle with the indigenous population. It can take some time, however, before this point is reached.
The characteristics of the poverty ghetto derive from the development of black ghettos in the northern United States as described by Wilson (1987) and Massey and Denton (1993). The poverty ghetto is the outcome of a downward spiral in the quality of a concentration district, in the course of which unemployment and pauperisation trigger a rising crime rate. That in turn prompts those residents who are able to do so to abandon the neighbourhood. Among those who remain, a culture develops which rejects the values, and above all the norms, of the surrounding society, thereby effectively cutting off the road back for the inhabitants and their children. Social isolation and the lack of social opportunities are thus the key features of the poverty ghetto.
The question addressed in the Report on minorities 1995 is what conditions prevail in the concentration districts in the Netherlands and how they are likely to evolve in future. Do such areas exhibit features of socially mobile neighbourhoods or do they show signs of drifting towards poverty ghetto conditions? The SCP portrays concentration districts as gathering places for underprivileged ethnic minority people with a weak orientation to Dutch society, as well as for low-earning but better educated people of Dutch ethnic origin. Nevertheless, the SCP does not claim that the concentration districts possess all the traits of poverty ghettos. Nor does the SCP expect rapid upward mobility and integration. Risk factors are present in concentration districts which can lead to deterioration: extreme unemployment especially amongst ethnic minorities, the abandonment of the schools by better educated parents, the lower achievement levels in these schools, and last but certainly not least the widespread crime and decay (Tesser et al, 1995).
Choices and constraints
Several reports, papers and articles by scholars from different Dutch universities succeeded the Report on minorities 1995 (e.g. Deurloo and Musterd, 1998; Van Kempen and Özüekren, 1998). They claimed that segregation was not rising at all. Indeed, they argued, the number of ethnic minorities and the share of the total population had been rising and would keep on rising, but this did not lead to more segregation. Moreover, ethnic concentrations were small of size (Deurloo and Musterd, 1998). These authors concluded that concentration neighbourhoods were not developing into poverty ghettos. Recently, Bolt (2001) concluded that concentration neighbourhoods were not in high demand with ethnic minorities; that ethnic minorities are less satisfied concerning their housing conditions than the ethnic Dutch; ethnic minorities in concentration areas more often than those in non-concentration areas like to move to another neighbourhood; and, ethnic minorities make little progression in their housing career. These conclusions are confirmed by other independent as well as by government-sponsored research.
None of these researchers do however address the issue of housing market discrimination. Some assert no discrimination is taking place, but they show us no proof. Bolt for instance describes three theoretical schools that account for the bad housing conditions of ethnic minorities: the human capital school; the ethnic-cultural, or choice school (e.g. Clark, 1991; 1992); and the ethnic stratification, or constraint school (e.g. Rex and Moore, 1967; Massey and Denton, 1993). According to the human capital school immigrants will be able to achieve their needs and desires to the same extent as non-immigrants. They claim differences in achievements can be carried back to differences in living, employment (income), education and household careers. The choice and constraint schools on the other hand claim that differences will not disappear if compositional differences are taken into account.
The choice school suggests differences can be explained threw the differences in preferences. Preferences in location and type of dwelling are not only different for different age groups or different types of families, but also for different ethnicities. These differences in preferences and social networks may lead to segregation and concentration of ethnic groups. Clark (1991; 1992) believes that relatively small differences in preferences between various ethnic groups concerning the ethnic composition of a neighbourhood can result in strong patterns of segregation. Research shows that most whites prefer a neighbourhood with at least 80 percent whites, while most blacks prefer a 50 percent black/50 percent white neighbourhood. If the number of blacks is rising in a dominantly white neighbourhood, the popularity amongst whites will fall, while the popularity amongst blacks will rise. As a consequence the dominantly white neighbourhood will become a dominantly black neighbourhood (Clark, 1991; 1992).
Massey (1994) agrees with Clark’s assumption that blacks usually prefer mixed neighbourhoods and whites usually dominantly white neighbourhoods, but Massey and Denton (1993) claim that segregation is caused by the preferences of the whites, not of the blacks, because Clark’s scheme can’t explain how whites are able to exclude blacks from their neighbourhood: "Active discrimination against black home seekers must also occur: some neighbourhoods must be kept non-black if whites are to have an avenue of retreat elsewhere" (Massey, 1994). Opponents of the choice school claim that followers of the choice school have a one-sided view on preferences and perceptions of individuals.
Followers of the constraint school explain segregation and the housing situation of ethnic minorities not only by the use of preferences and social networks, but also by the constraints on the housing market some groups will face. Constraints on the housing market contribute to the spatial stratification of both income and racial groups. Income and preferences alone cannot explain for the ethnic or racial housing choice patterns.
Bolt (2001), like many others, comes to the conclusion that both human capital and choices play a role. However, Dutch researchers always come to this conclusion after doing choice related research. Indeed, a major share of the housing market position of ethnic minorities in the Netherlands can be explained by differences in income and preferences. But, income (human capital school) and preferences (choice school) do not explain fully the low housing market position of ethnic minorities. Only research focused on the occurrence of housing market constraints (constraint school) is able to uncover possible discrimination.
American and Canadian scholars like Galster (1992) and Hulchanski (1993) argue that if discrimination against certain groups on certain grounds exists in a society, it will logically be found throughout other key sectors and institutions of society. All types of discrimination exist in a system of mutual support and there is nothing special about housing markets to protect them from the forms of discrimination that permeate the rest of society (Galster, 1992; Hulchanski, 1993). If this is correct, discrimination will take place in the Dutch housing market because, as Rodrigues (1997) has shown, discrimination is taking place in other parts of Dutch society.
The remainder of this paper will review the scarce literature on housing discrimination in the Netherlands.
Discrimination in rental markets
It is well known that Turkish and Moroccan immigrants were denied access to social housing in many municipalities in the Netherlands in the 1970s and 1980s (e.g. Tesser et al, 1996). Other housing corporations only rented their least popular units to immigrants (Duyvendak and Veldboer, 2000). Consequently, immigrants were excluded from some neighbourhoods. In the 1980s, a survey by the Nationale Woningraad (branch organisation of housing corporations) revealed that 35 percent of the housing corporations were using nationality as one of the application selection criteria. Responsible ministers have always condemned this policy, but never took legal action (Duyvendak and Veldboer, 2000). Moreover, immigrants were in an unfavourable position because apartments with more than one bedroom were reserved for families, but immigrants were only allowed to have their families migrate to the Netherlands if they lived in a house with a least two bedrooms (Tesser et al, 1996). It was hard to overcome this paradox within the social housing sector. Many immigrants were thus ‘forced’ to buy a house (emergency buyers). In general they bought homes in poor quality.
Recently, institutional exclusion and discrimination in social rented housing market is said to be diminished (e.g. Bolt, 2001). But even if housing discrimination is not taking place anymore, the past housing situation influences the current: "If one can imagine a society which suddenly became ‘race-blind’ it would still have within its social stratification reflections of earlier patterns of racial discrimination because of the extent to which earlier racism had disadvantaged its victims" (Hill, 1996, 276).
Less well known paired testing research by Snijders and Langbroek (1994) shows that housing discrimination is still taking place in the lodgings market: certain ethnic minority groups are excluded by a number of landlords.
In the homeownership market cases of discriminating brokers are also known. One broker for example did not want to sell the house at the highest bid, because it concerned a Turkish family (Rodrigues, 1997). Another example are rent-own-constructions under which apartments were sold to ethnic minority groups. Due to language problems these minorities thought they were buying an apartment, while they actually paid for the right to rent it.
Mortgage redlining
In October 1999 it turned out that various neighbourhoods in Rotterdam where excluded from mortgage capital, and that in various other neighbourhoods mortgages were only distributed under uneven conditions (high interest rates, high down payments, short funding periods). Redlined areas were, without exception, predominantly ethnic neighbourhoods.
This so-called ‘Rotterdam mortgage scandal’ has its roots in the national housing recession of 1980. The collapse of the housing market led to lower real estate prices and more caution at the capital banks. From that moment on, it was difficult to get a mortgage for an apartment in the South boroughs of Rotterdam (consisting of two-fifth on the city’s population). Many banks simply distributed hardly any mortgages in these neighbourhoods while others distributed no mortgages for apartments up to a 100,000 [about euros 45,000/£28,000]. In those days, there were virtually no apartments in these areas above the 100,000 limit. At the end of the 1980s, conditions improved one bank drew up a map indicating in which areas they would or would not invest. This bank acquired a large market share. In the early nineties the restrictions where loosened and other banks followed suit (Aalbers, 2002).
In 1998 the pendulum swung back: restrictions were enforced and tightened. The effect of the mortgage investment map (that initially led to improving conditions for mortgage applicants) was now being reversed; in certain neighbourhoods it became almost impossible to get a home mortgage. In October 1999 a city councillor of Charlois (one of the city districts in Rotterdam-South) gave notice of redlining practices which led to the ‘Rotterdam mortgage scandal’. Banks denied the claims and evidence of redlining was dismissed as ‘occasional’. The existence of mortgage financing maps and zip code lists stating "do not distribute mortgages" were denied, or it was said that they were not used. Despite the denials or perhaps linked to these denials denied mortgage applications on neighbourhood grounds became an exception within a couple of months.
An analysis of the Rotterdam housing market in 2001 showed no proof of redlining whatsoever (Aalbers, 2002). This is not to say no areas were redlined and no banks were redlining. There is a small possibility that one or two individual banks are still redlining a small number of neighbourhoods. Besides, some banks are still not distributing mortgages under euros 50,000 [£30,000].
Conclusions
Discrimination exists in the Dutch housing market just like it is found throughout other key sectors and institutions of Dutch society. Recent research shows discrimination is taking place in the lodgings market as well as in the homeowner market. According to Galster (1992) and Hulchanski (1993) this means discrimination will also be found on the social and private rented housing market: "If it exists in one part of the housing system, it will permeate other parts" (Hulchanski, 1993). In the 1980s discrimination also took place in the social rented market; future research will have to show if it is still or again taking place in this and other parts of the housing market.
The fact that discrimination is taking place in different parts of the housing market also questions the applicability of the concept of the socially mobile neighbourhood to many concentration areas of ethnic minorities. Since it is credit banks that exclude these areas from mortgage capital, and social and private landlords exclude minorities from other areas, the image of a no-choice neighbourhood dooms up. This image is reinforced by research that shows that most minorities prefer to live in mixed neighbourhoods instead of concentration areas (Bolt, 2001); while another SCP-report shows that the ethnic Dutch increasingly dislike having ethnic minority neighbours (SCP, 1998). This report also shows that the poorer starting position of the ethnic minorities as compared to the ethnic Dutch also manifests itself in the second generation. The members of ethnic minorities are strongly over-represented in various disadvantaged groups, and a fairly large portion of disadvantaged groups consists of members of ethnic minorities. Relative segregation might not have increased, but since the number of members of ethnic minorities grew from 200,000 to 1.5 million or from 1.6% to 9.4% of the total population between 1971 and 1997 (SCP, 1998), real concentrations of ethnic minorities have clearly increased. The question is if this image would have been a clearer one without housing market discrimination (socially mobile neighbourhoods) or with more discrimination (ghettos). Whatever the case, discrimination in different parts of the housing market can no longer be denied.
Notes
- In the Dutch case, the main ethnic minority groups come from former guest worker countries (Turkey, Morocco) and former Caribbean colonies (Suriname, Dutch Antilles). People from Indonesia (former Asian colony) and Italy (former guest worker country) are hardly ever mentioned as a distinct group because they are generally very integrated and often engaged in mixed marriages. Recent immigrants, like asylum seekers from Africa, Asia and the Middle East, on the other hand, are seen as ‘different’. Dutch research on ethnic minorities usually focuses on the four largest immigrant groups: Turks, Moroccans, Surinamese and Antilleans.
References
Aalbers, M.B. (2002) Redlining in the Netherlands: place-based and race-based exclusion, Vienna: ENHR conference.
Bolt, G. (2001) Wooncarrières van Turken en Marokkanen in ruimtelijk perspectief [Housing careers of Turks and Moroccans in spatial perspective], PhD thesis, Utrecht: KNAG.
Clark, W.A.V. (1991) ‘Residential preferences and neighborhood racial segregation: a test of the Schelling segregation model’, Demography, 28(1):1-19.
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Manuel B. Aalbers
AME Amsterdam Study Centre for the Metropolitan Environment
University of Amsterdam
Nieuwe Prinsengracht 130
1018 VZ Amsterdam
The Netherlands
Tel: +31-20-525-4279
E-mail: M.Aalbers@frw.uva.nl
