Last week, Chicago-area fair housing agencies South Suburban Housing Center, Open Communities (in Evanston) and HOPE Fair Housing Center joined the National Fair Housing Alliance (NFHA) and six other fair housing organizations across the country to announce a settlement of a federal court complaint with Redfin, one of the nation’s largest real estate services companies. The settlement will expand opportunities for consumers in communities of color in Metropolitan Chicago’s Cook and DuPage counties, covering plaintiffs’ three Chicago service areas. Redfin employs over 100 senior agents serving this two-county region.
Redfin’s elimination of its nationwide minimum home price policy, expansion of real estate services for low-cost homes in ten metro areas, and payment of $4 million will settle a discrimination lawsuit filed against Redfin by the three Chicago area fair housing agencies, NFHA, and other fair housing organizations.
“Today’s settlement provides much-needed financial relief to communities harmed by Redfin’s policies while changing those policies to prevent future harm. But more than anything, today is a call to action for the industry and all of its innovators to ensure that the new tools they create disrupt the status quo, not perpetuate it,” noted Michael Chavarria, Executive Director of the HOPE Fair Housing Center.
The lawsuit was filed after a lengthy investigation by the NFHA and other fair housing organizations. They alleged that Redfin’s minimum home price policy violated federal fair housing law by discriminating against sellers and buyers of homes in communities of color. Plaintiffs also alleged that policies that limit or deny services for homes priced below certain values perpetuate racial segregation and contribute to the racial wealth gap.
Cheryl Lawrence, CEO of Open Communities, said, “This lawsuit underscores the importance of holding internet-based businesses to the same fair housing standards and laws as other entities. This is one more step in the fight for housing equity.
The regulations should serve as a warning to others in the real estate industry that they must exercise caution to ensure that their policies and practices, including how they use technology, do not cause discriminatory results.
Redfin has agreed to make changes that will last for at least three years after an initial implementation period. The company will also implement an outreach and recruiting plan to increase racial diversity within its workforce, advertise its services to reach non-white consumers, and require its agents and partner real estate companies local communities are trained in fair housing.
“The resolution calls for continued monitoring and interaction by Redfin with the NFHA and local fair housing agencies to ensure that an increased number of buyers and sellers in Chicago-area communities of color can benefit comprehensive services from Redfin,” said John Petruszak, Executive Director. from the residential center of the southern suburbs.
The legal complaint filed by the NFHA and other fair housing organizations alleged that Redfin’s minimum home price policy had a significant negative impact on buyers and sellers of homes in predominantly non-white communities based on race. and national origin. The complaint alleged that Redfin failed to provide service in non-white ZIP codes at a disproportionately higher rate than in white ZIP codes in Chicago and other cities covered by the lawsuit, such as Baltimore, MD; Detroit, Michigan; Kansas City, MO/KS; Long Island, New York; Louisville KY; Memphis, TN; Milwaukee, Wis.; Newark, New Jersey; and Philadelphia, Pennsylvania.
The lawsuit was filed by New York-based law firm Emery Celli Brinckerhoff, Abady Ward & Maazel, LLP, and Seattle-based firm MacDonald Hoague & Bayless in federal district court in Seattle, WA.
Other plaintiffs include the National Fair Housing Alliance, the Fair Housing Center of Metropolitan Detroit; Fair Housing Justice Center, Inc.; Long Island Housing Services, Inc.; Lexington Fair Housing Council; Fair Housing Council of the Milwaukee Metro Area; and the Fair Housing Rights Center in southeastern Pennsylvania.
Proceeds from the $4 million settlement will be used to monitor Redfin’s compliance with the agreement, invest in programs that expand homeownership opportunities in Chicago and other cities involved in the lawsuit, and pay litigation and investigation costs.
Seattle-based Redfin is a leading real estate broker. It operates in 95 markets in the United States and Canada and has generated $195 billion in home sales. Redfin averaged nearly 47 million monthly users on its mobile apps and website in 2021.
The investigation, in this case, was funded in part by Private Law Enforcement Initiative grants received from the Fair Housing Initiatives Program administered by the US Department of Housing and Urban Development.
Submitted by Open Communities: Fair Housing Agency