Race & Real Estate – Why Atlanta is So Different

Over the years, we have written many articles highlighting the unique benefits of the Atlanta real estate market. Still, too few realize just how different our market is, and fewer yet, know any of the historical background. Would it surprise anyone to learn that race played a major part in determining how our market operates today? So how did Atlanta become a, “one of a kind” market?

The hero of our story is Fletcher L. Thompson, of Fletcher Thompson Realty. In the late 1980’s, he took on, sued and beat, the largest trade group in the United States; the National Association of Realtors (NAR)

The story begins in 1947 with the formation of the National Association of Real Estate Brokers (NAREB). The need for this association was created because the National Association of Realtors (NAR) didn’t allow black people to be Realtors. Prior to the 1960’s, NAR prohibited blacks from becoming Realtors and barred white Realtors from selling homes in white areas to black people. NAREB’s mission was to serve the needs of the black community. They weren’t allowed to call themselves Realtors so they called their members “Realtists”. Over time, NAR’s Realtor Boards and NAREB’s Realtist Boards developed identical membership requirements, codes of ethics and educational curriculum. The only difference between a Realtor and a Realtist was the color of skin.

As batshit crazy as that policy seems in today’s world, the two realty groups, from a legal standpoint, didn’t collide much with each other until the advent of the computer and the electronic MLS. (The National Association of Realtors doesn’t publish on their website when they began admitting black agents. The NAREB, while still active today, is small in number)

In 1988 Mr. Thompson’s realty company was denied access to the Atlanta Metro MLS because his company was not a member of a Board of Realtors. No, Fletcher Thompson Realty was a member of a Board of Realtists through its participation in the NAREB. Mr. Thompson didn’t think it was necessary to join another realty Board and felt withholding MLS access represented a violation of fair trade. He was right of course.

Additionally, many older NAREB members, at the time, found it particularly offensive to be forced to join and pay an organization that for generations was, by its Constitution, “whites only”. In an absolutely unexplainable course of events, it took 3 years of legal haggling to determine what should have taken 3 seconds.

In 1991, the U.S. 11th Circuit Court, which oversees Georgia, Alabama and Florida ruled against required NAR participation as a prerequisite for MLS access. Imagine that, the Court ruled, Realtors and Realtists were essentially equal and could not rule in favor of one Board, NAR, over another Board, NAREB. As a result, the decision opened up MLS participation to non-member Brokers throughout the entire 11th Circuit Court of the United States.

Sadly, the door that was opened by the historic “Thompson vs DeKalb Board of Realtors” decision was strategically closed again over time. As with many legal decisions, there always seems to be a back door left open. The NAR policy toward non-member access was written such as to become a matter of local discretion. Meaning, any limitations on MLS participation could be decided at the local level.

NAR, with unlimited budget and endless resources was able to put down any challenging voices. They successfully were able to undo the Thompson Decision and convert most of the 11th Circuit back to requiring NAR membership. EXCEPT Atlanta!

Today, Atlanta remains the ONLY metropolitan market in the United States that does not require NAR or NAREB membership as a requirement for MLS access. And, given the legal costs of our society today, it’s not likely any local community or group could afford to ever take on the National Association of Realtors again.

Today, because of Mr. Thompson, Atlanta is littered with tons of Independent realty companies. As a matter of fact, Atlanta has more licensed “little r’s” than it does the big “R” kind. This dynamic is only found in Atlanta. And, for many Independents, it’s a source of pride.

Because of Mr. Thompson, Wynd Realty has never been forced to charge an agent a penny for NAR services. Over the last decade, this has meant over $1M dollars staying in Atlanta and not being shipped off to NAR only to end up in some lobbyist’s pocket. And, we are just one of many companies. The ramifications of what one person did are staggering. And the “what if” is even more mind-blowing. If the 11th Circuit had been able to remain open the impact would have been felt in markets worldwide.

Wynd Realty wouldn’t exist if not for Mr. Thompson challenging the system. Yet sadly, we don’t know whatever happened to Mr. Thompson. The history of his Company is both sketchy and unremarkable. It certainly doesn’t appear Mr. Thompson capitalized on his victory to vault into fame or fortune. By all accounts, he appears to be just another unsung hero who moved the ball of progress.