South Florida Sun-Sentinel (Sunday)

Redfin accused of systematic racial bias by housing groups

- By Gene Johnson

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.”

 ?? PATRICK SEMANSKY/AP ?? Lisa Rice is president and CEO of the National Fair Housing Alliance, which has filed a lawsuit against Redfin.
PATRICK SEMANSKY/AP Lisa Rice is president and CEO of the National Fair Housing Alliance, which has filed a lawsuit against Redfin.

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