Race correlates to a high degree with failure to pay rent.

But as far as I can tell, people think that discrimination is rampant in the housing market. It probably is, but not the way that is usually assumed. Namely, it is likely that race correlates to a high degree with failure to pay rent, among other things. Most landlords that I know of would rent to anyone who would pay the rent on time and not damage the property. But if they know that there is a correlation between race and lower landlord earnings, they will indeed "discriminate." And THIS kind of discrimination does not get competed away. But is it at all plausible to you that landlords would discriminate in the malicious sense to any important degree if this correlation were illusory? Moreover, do you think it at all plausible that landlords would SYSTEMATICALLY overrate the magnitude of the correlation?