Real estate brokerage firm Redfin has settled a lawsuit alleging housing discrimination. Under the agreement, Redfin will change its minimum housing price policy and pay $4 million to settle the suit brought against it by the National Fair Housing Alliance and nine other fair housing organizations in 2020.
Under the settlement that was reached April 29, Redfin promises to expand housing opportunities for consumers in communities of color in numerous major cities.
The lawsuit accused Redfin of systematic racial discrimination by offering fewer services to homebuyers and sellers in minority communities. This is considered a type of digital redlining, say fair housing advocates. Redlining is a now-illegal discriminatory practice in which banks withheld services from potential customers who reside in neighborhoods with significant numbers of racial and ethnic minorities, and low-income residents.
The housing organizations conducted a two-year investigation and said they found that Redfin was vastly less likely to offer realtor services, professional photos, virtual tours, online promotion, or commission rebates for homes listed in minority dominated neighborhoods than it was in predominately white ones, ABC News reported.
The complaint alleged that Redfin offered no services in non-white ZIP codes at a disproportionately higher rate than in white ZIP codes in Baltimore; Chicago; Detroit; Kansas City, Missouri; Kansas City, Kansas; Long Island, New York; Louisville, Kentucky; Memphis, Tennessee; Milwaukee; Newark, New Jersey; and Philadelphia.
Redfin operates in 95 markets in the U.S. and Canada and has generated $195 billion in home sales.
In the lawsuit, the fair housing advocates claimed that homes in minority neighborhoods were likely to stay on the market longer and sell for lower prices.
“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 stated.
Under the agreement, Redfin will change its minimum housing price policy, alter other practices, and pay $4 million to settle the suit. The company has also agreed to make changes that will stand for at least three years and will increase racial diversity in its workforce, advertise its services to reach non-white consumers, and require agents and local partner realty firms to attend fair housing training.
“Our goal was to ensure that all neighborhoods are treated fairly and have access to any real estate company’s full range of services,” said Lisa Rice, president, and CEO of the National Fair Housing Alliance. “The steps Redfin has agreed to take are a positive move toward stamping out some of the nation’s most harmful practices, like redlining and appraisal bias.”
Other plaintiffs included the South Suburban Housing Center; HOPE Fair Housing Center; Fair Housing Center of Metropolitan Detroit, Fair Housing Justice Center Inc., Long Island Housing Services Inc., Lexington Fair Housing Council, Metropolitan Milwaukee Fair Housing Council, the Fair Housing Rights Center in Southeastern Pennsylvania and Open Communities.
“Our commitment to broadening the price range of the homes we can sell is why, every year, by design, we lose money selling low-priced homes,” the company said. “As part of the settlement, we will increase our investment in serving buyers interested in low-priced homes in communities that have historically been underserved by the real estate industry.” Despite the settlement, the company still did not admit wrongdoing. Its statement concluded, “Redfin hasn’t broken the law, and we continue to stand behind our business practices.”