which utilizes and promotes panic, fear, and hate, usually for purposes of financial profit; and

"Whereas, it is hereby declared to be the policy of the State of Maryland, in the exercise of its police power for the protection of public safety, general welfare, for the maintenance of business and good government, and for the promotion of the State's trade, commerce and manufactures to protect all its citizens and property owners from the efforts of "blockbusters"; now therefore; be it enacted by the General Assembly of Maryland :".

California, Ohio, Baltimore, Detroit, and the District of Columbia now have some anti-blockbusting protection, but no other states have such regulations for their citizens. Maryland will, therefore, be in much better shape than other states unless anti-blockbusting is added to this proposed Title 4.

[From the Washington Post, Apr. 3, 1965]

PROPERTY VALUES SHOW STABILITY WHEN NEGRO FAMILIES MOVE IN

By Edward S. Cohen, Washington Post Staff Writer

What happens to real estate property values in a white neighborhood when Negroes begin to move in?

A series of detailed studies made in Washington, California, New Haven and Houston presents evidence to show that the effect is minimal provided whites do not panic.

The studies shatter the myth that Negro in-migration lowers property values. They show that property values in integrated neighborhoods tend to increase at the same rate as those in all-white areas.

But the most detailed one of the studies discloses that property values in a neighborhood can be deflated if white residents panic when integration begins and suddenly put more homes up for sale than can be absorbed by the market. The local studies cover neighborhoods in Northwest Washington and in three Suburban Maryland communities.

The most extensive survey made elsewhere in the Nation covers 10,000 property transfers in California.

VALUES INCREASED

A study of the 10,000 property transfers, half in changing neighborhoods and half in all-white neighborhoods, found that values rose in 44 per cent of the cases after Negro entry; they remained the same in 41 per cent, and showed decline in 15 per cent.

The author, Luigi Laurenti, found that where values did decline, the drop was generally small, never over 9 per cent. Where they rose, some jumped as much as 26 per cent.

The 1960 study concluded that Negroes themselves have no inherent effect on property values. Rather it is the white response to Negro entry that is important.

Negroes, finding the supply of housing restricted, are usually willing to pay more than whites to obtain an equivalent property. Thus real estate prices will normally go up in neighborhoods where Negroes are buying.

PANIC DEPRESSES

But if the whites panic and place their homes on the market faster than Negroes are willing or able to buy them, the supply will exceed the demand and prices will fall. Laurenti concludes that white residents have it in their power to determine, in large measure, whether they will gain or lose financially from Negro entry.

Surveys in nine New Haven neighborhoods that integrated between 1950 and 1960 show that eight of the nine experienced property value increases equal to or greater than the average increase for New Haven.

In Houston's South MacGregor Estates, Negroes began moving in 10 years ago and whites panicked at the sight to Negro neighbors. Values plunged. A citizens' committee began picking up the pieces by persuading whites to stay and accept desegregation. Prices are coming back and Negroes hold about 200 of the 1000 homes.

Barrett Homes, Inc. built $15,000-houses in Richmond, Calif., that sold on an open occupancy basis in 1958. By last summer there had been a 100 per cent turnover in the occupancy rate of the development. Within five years the number of Negroes increased by nearly 20 per cent. In the years 1959-1961 average resales were $2000 higher than the original selling price. Additional units have been built, bringing the total completed or planned to over 500.

RESULTS SIMILAR

The pricing analysis is not as comprehensive for Washington surveys as was data obtained in California. But the results are similar.

Erdman Palmore, who also made the New Haven survey, found that property values in four integrated census tracts in Northwest Washington over a tenyear period (1954-1963) increased at rates comparable to the increases in two all-white tracts.

The tracts shared in the general trend of real estate inflation in the Washington area.

The four integrated tracts comprise most of what is known as Neighbors, Inc., a 250-block area bounded generally by Ingraham Street nw. on the south, Rock Creek Park on the west and Blair Road. Neighbors Inc. was formed in 1958 to check a panic outflow of whites corresponding to a rapid influx of Negroes into the area. The neighborhoods range anywhere from 20 per cent Negro to as high

as 80 per cent in some sections.

In comparing this area with an almost solid white district west of Rock Creek Park in upper Northwest, Palmore established that property values rose from 4 per cent to 24 per cent in six tracts among properties valued between $10,000 and $50,000.

He found that the variation in property value increases did not have much to do with any single factor such as increase in per cent Negro, family income, value of houses, age of houses, or amount of crowding.

FACTORS CITED

In one section for example where there was the greatest increase in number of Negroes there was the lowest increase in property values. Yet the section with the next greatest increase in Negroes had next to the highest increase in property values (16 per cent).

But to explain the low property value gains in Census Tract 19 (4 per cent), bounded by 2d and 8th Streets nw., Van Buren Street on the north and Oglethorpe on the south, the study suggested that a combination of lower incomes and cheaper, older and more crowded housing might account for it.

In 1950, out of 8600 persons in the tract, 27 were Negroes. By 1960 there were 4058 whites and 4385 Negroes. Now it is largely Negro, according to sociology professor John H. Staggers Jr. of Howard University. Staggers sees it as a segregated community again, one that has apparently run full-circle. The homes there are 77 per cent owner-occupied.

As for housing demand, there are no white buyers. Negroes with money would probably look elsewhere, Staggers said.

In 1962 a Negro professional moved to the 5600 block of Nebraska ave. west of Rock Creek Park. The family was the first in many years to accomplish the feat. Others have followed since.

SELLS FOR MORE

In surrounding blocks since then there have been a dozen sales or so among houses ranging from $25,000 to $39,000. Each house has sold for more, up as much as $3000 to $10,000 from the previous sale in the 1950's. One real estate agent calls the market there "supremely stable," even where houses have had minimal improvements since the mid-1950's.

In Maryland, where more than 80 Negro families have moved to the suburbs in recent years, Suburban Maryland Fair Housing, Inc. has been instrumental in smoothing the way for orderly transition to desegregated neighborhoods. It attempts to thwart rumors, panic and myths that crop up when a white community experiences its first Negroes.

Formed in 1962, the group has kept records on areas where Negroes have moved. According to its research committee, "The introduction of a Negro

family in to a stable, middle-class, previously all-white suburban community has not halted the upward trend in prices there."

In one subdivision in Kensington-Wheaton, where houses are priced about $20,000, there have been 11 sales since 1958. Before a Negro family moved in during 1961, the increase over the original selling price ranged from $2000 in 1961 to $4000. Since then the increase has varied from a low of $2500 to a high of $6500.

In a Rockville community where houses sell in the low twenties, there were 12 resales from 1957 to the time a Negro family moved in 1963. The increases over the original sale ranged from $500 to $3000. After the family was settled there were six additional sales with gains ranging from $1500 to $3000, a sign of stable prices.

In an older neighborhood in Bethesda where a Negro family moved 10 year ago, homes run in the $30,000 range. There have been seven subsequent sales all at about twice the assessed valuations. One house sold twice, went for considerably more the second time than the first.

[From the Washington Post, Apr. 6, 1965]

EQUITY IN HOUSING

Racial myths die slowly and altogether unwillingly. There is a myth to the effect that housing values always drop when Negroes move into a neighborhood. It has been attacked repeatedly and fatally; at last, it appears to be losing force. Luigi Laurenti's massive study of California's experience was published five years ago, and a variety of similar research has followed it. As Edward S. Cohen recently reported in this newspaper, the pattern in Washington is the same as everywhere else.

Housing prices drop only when white owners take fright and sell houses faster than the Negro market can absorb them. But it is very much more common for sales prices to rise, just as all kinds of property values tend to rise in expanding cities. It is possible, of course, for a sufficiently foolish seller to lose money in a rising market; white homeowners have occasionally allowed speculators to panic them into selling at low prices, but the speculators then make massive profits by reselling at the true market level. The sensible seller, these studies show, will neither profit nor lose by racial change in the neighborhood. The value of his house will continue to appreciate at roughly the same rate as in uniformly white neighborhoods.

The real estate market in general has turned out to be a great deal less sensitive to racial differences than the real estate industry has been telling us all these years. Mr. Kennedy was warned in the most urgent terms that a presidential order prohibiting discrimination in Federally assisted housing would dangerously disrupt the industry. He signed the order, and nothing happened. Washington's suburban governments may wish to note that the economic arguments against fair housing laws can no longer be taken seriously.

Senator ERVIN. If I want to buy a house in Maryland, and I ask a real estate agent if there are people of the Negro race owning property in the immediate proximity of the house which he is undertaking to sell me, would he be permitted to tell me?

Mr. KILPATRICK. This was asked by a lot of people on Senate Judiciary Committee in the Maryland Senate. As I understand the ruling our State attorney general gave, there are two types of situations involved. If you ask a straight question, are there colored families in this neighborhood, and the agent says, "Yes, there are, nevertheless it is a good buy." this does not violate the law. The tactic that this law is aimed at and has done something to repress so far is this sort of statement. I am looking for a house near the District line, that is $15,000 or under. And the real estate agent says, "Well, the only one I have is located in Palmer Park, and that area is going all colored, so you do not want to locate there. However, I have some in Belair

at $30,000. From the discussions in the Senate Judiciary Committee of Maryland it was this situation that this bill is aimed at. A simple statement of fact does not discourage the buyer. Senator ERVIN. Well, the statute says it is

unlawful for any person—

Leaving out certain words—

knowingly ** to attempt to induce another person

or to discourage another person from purchasing real property, by representations regarding the existence or potential proximity of real property owned, used or occupied by persons of any particular race, color, religion or national origin.

Mr. KILPATRICK. In other words, just simply telling a man that there are colored families there is not construed as discouraging. That would be up to the man.

Senator ERVIN. Suppose I have applied to a real estate agent to find me a home, and I tell him that I want a home in a community that is occupied by people of my race. He offers me a home and I ask him whether this community is solely populated by members of my race. If he gives me any adverse information on that point he necessarily knows, since I asked him, that it would discourage me from buying this home. It seems to me that he would be guilty of a crime if he gave me the information that I asked for, because he would do it with knowledge of the fact, because I told him so, that it would discourage me to buy that home.

Mr. KILPATRICK. We have some pretty conservative people that looked this thing over, and they were concerned with this sort of thing, but had a very different interpretation. I might add that this wording exists in Detroit and Washington, D.C., but it only has been in effect for a couple of years, after much blockbusting took place in these places. Our interpretation is-if this factual situation discouraged you in your mind, this is your right. But as long as the real estate man said nothing derogatory in addition to a factual answer to your question, he would not be affected here.

Second, no prosecution is possible unless you complain.

Senator ERVIN. I cannot see how that would be if he gives me the information knowing that that information will discourage me from purchasing.

Mr. KILPATRICK. He is not discouraging you, no, he is not telling you the neighborhood is poor for that reason, he is telling you, well, this is the factual situation. If it discourages you, that is your problem, that is your business. But the real estate man did not discourage you, you did that yourself. As a matter of fact, you might look at the place, and after considering the fact that you have a Howard University professor next door you might change your mind. As long as he did not discourage you, that is your individual right.

Senator ERVIN. If there is a prospective buyer, we will say, who is a member of the Catholic Church, and the real estate agent tells him that the house that he wants to sell him is located in a community where there are nothing but Protestant churches and only Protestant families. Would not that discourage the Catholic from buying a home there assuming he wanted a home near a parochial school?

Mr. KILPATRICK. As long as he himself does not state all the conclusions that you have drawn, well, the various people supporting this

bill, feel that the real estate man is in no trouble. If he is saying the things that you have said, the real estate agent, then he might very well violate the law. But if he does not say these things but simply gives a statement of fact and allows the conclusions as to whether this is good, bad, or indifferent to be up to the home buyer-and this is what we feel an ethical real estate man will do-we feel that the real estate man is in no jeopardy here, nor will the homeowner or buyer complain.

Senator ERVIN. Of course, he has to knowingly attempt to induce the person.

Mr. KILPATRICK. That is correct.

Senator ERVIN. Well, there is a rule of law that every man must attend the natural consequences of his act. The agent tells me, knowing that I want a home in an area that is inhabited by people of my race, that this area is not inhabited by people of my race. This information discourages me from buying the house. It seems to me that that is a natural consequence of his act.

Mr. KILPATRICK. I do not think he can assume this, sir. There are entirely too many white families that are willing to purchase homes in desegregated areas and we have seen this many times-if they are are not discouraged actively or pressured. Nobody seems to be concerned with the fact that white homeowners, mind you, lose an awful lot of money out of this sort of thing, and the colored owners do not profit from it, they just get charged sky high. Some sort of protection needs to be included in this bill to discourage this. We have only three States in the Nation, and the District of Columbia, plus a few cities that have seen fit to try to do this, and I think it is criminal that this kind of thing is not being discussed. As I say, the Maryland bill is based on existing laws elsewhere. We have not found, the real estate people have not found, although they opposed it at first, that if they conducted themselves in a normal, ethical manner, or what you would consider, I am sure, ethical, that they are going to violate this. It is only the unethical speculator, it is only the man who wants to make a fast buck who is affected.

Senator ERVIN. One thing concerns me about this proposed antiblock-busting law. I am one of those individuals who happen to believe that all Americans, including those who happen to be real estate agents, ought to have the right to think and speak their honest thought concerning all things under the sun. An anti-blockbusting statute, it seems to me, is a very serious impairment of that right.

Mr. KILPATRICK. I think that the establishment of the principle that there are certain things one cannot say or do, be they subversive statements by members of the Communist Party, be they attempts by conmen to take money from little old ladies under false pretenses-which is basically what blockbusting is; a con game to take money or be it truth in packaging to restrain the manufacturers from mislabeling or distorting or misrepresenting their products-in this case the real estate transactions or services-it seems to me that this is very well established as an area of protection. The homeowners have to have some protection from this. And if it restrains unethical operatorsand I might add that the National Association of Real Estate Boards