Inequality brokered

Factors that increase or decrease social inequalities rarely occur in isolation. Unless checked, these factors mutually reinforce each other across human life spans, sustain unjust hierarchies across historical time, and spill over from their intended targets to those around them. For example, sexual orientation structures privilege and exclusion in myriad ways (1). In PNAS, Sun and Gao (2) evidence that mortgage brokering is one way that sexual orientation status gets acted on and reentrenched as people attempt to do something ordinary. Public attitudes have long been observed to be shifting toward sexual-orientation equality in the United States (3). In this context, one might conclude that sexual-orientation discrimination is no longer a concern and that complaints about discrimination lack any ground. However, social psychologists describe this belief as modern prejudice (4). In recent US history, although public opinion about sexual minorities has improved dramatically, discriminatory behavior in lending practices has been ongoing and gone unchecked.

Using large and previously untapped data sources, Sun and Gao (2) evidence that same-sex couples have been less likely to receive mortgage approvals than different-sex couples. In their data, the effect of sexual orientation is greater than the better-studied effect of ethnic discrimination. About 20% of same-sex couples who applied for mortgages were rejected, and the authors’ model predicted that had those same couples been straight, their rejection rate would have been only 11%. Among couples granted mortgages, the different-sex couples achieved the lower interest rates, and their choices to buy a home were less expensive, less stressful, and less risky. A single discriminatory decision can create lifelong effects. Different-sex and same-sex couples default on their mortgages about equally frequently, but different-sex couples are more likely to prepay theirs earlier. Same-sex couples are, if anything, the better financial investment for lenders. Finally, the more same-sex couples in your neighborhood, the harder it is for anyone to obtain a mortgage there, but particularly same-sex couples. This pattern of brokerage is discriminatory, consequential, irrational, and has negative effects that go beyond the targeted group. Sun and Gao do not use the word, but this looks exactly like the behavioral expression of what psychologists call prejudice (5).

As such, Sun and Gao’s (2) study should shake up what psychologists and other social scientists think we know about discrimination and prejudice on the basis of sexual orientation. By the early 1990s, when the span of Sun and Gao’s study’s time frame began, prejudice against lesbians, gay men, and bisexuals had become more commonly researched in psychology (6). But sexual-orientation discrimination in regard to homeownership has received in psychological science to date—as far as I can tell—zero attention. A search on the database PsycINFO yielded only a psychoanalytic study that analyzed gay men’s interest in remodeling their homes (7). Sun and Gao are throwing their stone into a very calm pond.

Reinforcing Inequality

These authors rightly draw upon a body of controlled social psychological experiments documenting anti-lesbian, gay, and bisexual bias in other domains such as the workplace. But no such experiments examine discrimination in lending. Social psychologists can, at the moment, only hypothesize about the motivations, emotions, and cognitions of brokers who refuse same-sex couples mortgages or jack up their interest rates, or about the extent to which such discrimination follows private prejudice or organizational norms. In other domains, incidental emotions, notably disgust, prompt unintended sexual-orientation discrimination (8). Stereotypes about the couples’ financial competence, future health outcomes, relationship commitment, or other factors might have mediated or rationalized this discriminatory behavior among brokers. The spillover effect on neighborhoods suggests the possibility that a shared belief that such communities were bad for lenders led brokers to make decisions that incrementally opposed the organic development of safer, pluralistic neighborhoods via homeownership in the United States.

While same-sex couples’ homeownership is not well researched in psychology, social scientists and caring professionals have long studied homelessness among lesbian, gay, bisexual, and transgender (LGBT) people, particularly youth (9, 10). Sun and Gao (2) point out that homeownership is a component of the ideal of the American dream, but homes, owned or rented, have not been inherently safe places for Americans to grow up gay, lesbian, or bisexual. A recent UK survey of over 100,000 LGBT people asked participants to identify who had perpetrated the most serious incident against them within their homes. Tellingly, parents and guardians accounted for about one-third of such incidents, constituting participants’ modal response (11). Homeownership is often passed through generations, but LGBT youth do not easily reap such long-term benefits from parents and guardians whose homes must be fled. Indeed, I wonder whether different-sex couples were found to be more likely to repay their mortgages early in Sun and Gao’s study because individual partners were more likely to inherit parental wealth than partners in same-sex couples were. Effects of early repayment decisions may extend into retirement years. Sun and Gao’s findings can be conceptualized as part of a broader set of established findings that structure to keep LGBT people out of homes and the aspect of the American dream that homeownership represents.

Of course, same-sex couples want to buy a home to access the many benefits that homeownership is thought to bring. Homeownership is believed to improve life satisfaction and self-esteem (12). Lesbians, gay men, and bisexuals’ life satisfaction is impacted by exposure to negative treatment often outside the home (13). Minority stress describes how negative discriminatory events and the fear of them lead to group differences in well-being and mental health (14). A common response to minority stress is to avoid situations in which unfair treatment is expected, which is a difficult move to make if you have no home to go to.

Same-sex couples may also wish to buy homes if they are planning to have children. Children reared in owned homes are assumed to fare better in many social policies, but the differences are sometimes small when other markers of status are controlled (15). The evidence that same-sex and different-sex couples raise children who fare equally well on most measures is also strong (16). Sociologists have long argued that psychologists’ studies of same-sex parenting outcomes have overstated group similarities in response to political attention to these outcomes, while different outcomes for children can arise when same-sex and different-sex parents’ carve out their niches in different ecologies (17). Findings such as Sun and Gao’s (2) inform this literature by showing that same-sex couples have been afforded less freedom in the housing market to carve out anything at all, rendering their raising of well-adjusted and successful children all the more remarkable.

Relatedly, homeownership can foster greater involvement in community, and homeowners stay in the same home, on average, far longer than renters do. Same-sex couples have particular reason to be involved in community organizing; public life in the United States and elsewhere is typically configured along heteronormative lines (18). Many aspects of public culture in the United States take heterosexuality as the default norm for identity (19). Sun and Gao’s (2) study shows barriers to homeownership that may have inhibited same-sex couples from settling in and contributing to their local communities. Their data also show that brokers may have inhibited anyone, but particularly same-sex couples, from buying into communities where same-sex couples had become more typical. Since the early 2000s, demographers have debated the question of whether the density of gay men in an area of the United States is predictive of its potential for generating new capital (20). Where this claim is true, prejudicial lending by sexual orientation may have impacted local economic vitality counter to lenders’ intentions.

Using large and previously untapped data sources, Sun and Gao evidence that same-sex couples have been less likely to receive mortgage approvals than different-sex couples.

Open Questions

Sun and Gao (2) say little about diversity among same-sex couples here. Early on, Sun and Gao compare the size of sexual orientation and race discrimination in their data, but psychologists are more interested in examining how dynamics of inequality intersect than in how they compare. Other studies of homeownership and sexual orientation have found differences in the values of homes owned by female vs. male couples (21) and noted larger effects of partner’s race and income on homeownership in different-sex compared to same-sex couples (22). Over this study’s (2) time frame, the life narratives that lesbian and gay people wrote for themselves in the United States changed dramatically (23). Those lives were impacted by the HIV/AIDS epidemic; the repeal of sodomy laws that outlawed sexual expression even in the home; a lesbian baby boom, creating new kinds of families; the equalization of marriage laws; and professional, political, and legal debates about the rights of parents to subject the children who live in their homes to conversion therapies. Simultaneously, LGBT rights to serve in the armed forces, to marry, and to use bathrooms outside the home, have all been axes of political polarization within the United States. Because historical events impact individual psychologies according to the point in the life span at which those events occur, same-sex couples with highly geared mortgages may have navigated the subprime mortgage crisis in the United States differently depending on where their feet fell on the property ladder at that point in time. Gay-friendly neighborhoods that existed in 1990 are now the subject of considerable discussion about gentrification and economic exclusion (24). Writing from the United Kingdom, where the 2010 Equalities Act expressly forbids discrimination against same-sex couples in such financial contexts, equal access to the dream of homeownership in the unregulated United States appears unnecessarily haphazard—unfortunately subject to historical and geographical variation in discrimination—and wide open for further study.