South Florida Sun-Sentinel (Sunday)
Redfin accused of systematic racial bias by housing groups
SEATTLE — Several fair housing organizations have accusedRedfin of systematic racial discrimination in a lawsuit, saying the online real estate broker offers fewer services to homebuyers and sellers in minority communities — a type of digital redlining that hasdepressed home values and exacerbated historic injustice in the housing market.
In a complaint filed Thursday in U.S. District Court in Seattle, the organizations said that during a two-year investigation they documented the effect of Redfin’s “minimum price policy,” which requires homes to be listed for certain prices to reap the benefits of Redfin’s services.
The company was vastly less likely to offer real estate agent services, professional photos, virtual tours, online promotion or commission rebates for homes listed in overwhelmingly minority neighborhoods than it was in overwhelmingly white ones, the investigation found.
That meant homes in minority neighborhoods were likely to stay on the market longer and sell for lower prices than they otherwise mighthave, the lawsuit said.
“Redfin’s policies and practices operate as a discriminatory stranglehold on communities of color, often the very communities that have been battered by a century of residential segregation, systemic racism, and disinvestment,” the lawsuit said.
The lawsuit comes as the nation reckons with generations of systemic racism, including in real estate. Mortgage lenders and brokers long discriminated by drawing lines on maps — known as redlining — and refusing to provide services for homes outside of white areas, preventing minority residents from building wealth through homeownership. Though the practice
was outlawed decades ago, it has had severe consequences in perpetuating poverty and restricting access to good schools, health care and other amenities.
Redfin, based in Seattle, launched in 2006 and has grown to offer residential real estate brokering, mortgage, title and other services in more than 90 mar
kets in the U.S. and Canada. In a statement Thursday, CEO Glenn Kelman insisted that the company had not violated the federal Fair HousingAct, “whichclearly supports a business’s decisions to set the customers and areas it serves based on legitimate business reasons such as price.”
However, he said, the lawsuit raised important questions that Redfin has struggled with.
“Our long-term commitment is to serve every person seeking a home, in every community, profitably,” Kelman said. “The challenge is that we don’t know how to sell the lowestpriced homes while paying our agents and other staff a living wage, with health insurance and other benefits. This is why Redfin agents aren’t always in low-priced neighborhoods.”
Redfin has previously said it is devoted to eradicating systematic discrimination in the industry and that enabling people of color to find listings online — rather than relying on an agent to show them what homesare available— could help end segregation.
The company once experimented with awarding agents commissions based on customer satisfaction rather than sale price, as a way to promote the sale of less expensive homes, but found it difficult to recruit agents who expected to make more money for selling more expensive homes.
But Redfin’s minimum price and other policies have had the opposite effect, according to the National Fair Housing Alliance, a Washington, D.C.based nonprofit dedicated to eliminating housing discrimination, and nine of its member organizations.
Lisa Rice, president and CEOof the alliance, said the groups did not share their findings with Redfin before filing the lawsuit because past experience with the industry sometimes resulted in long, unsuccessful negotiations that only protracted the issues.
“We have had decades and decades and decades of discriminatory practices in the real estate field,” she said. “Real estate agents are some of the most welltrained professionals in the industry. They know what redlining is.”