Real estate brokerage company will have to pay $4M to settle case with the National Fair Housing Alliance, others.
The National Fair Housing Alliance (NFHA) and nine other fair housing organizations, including 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, brought a lawsuit against Redfin, a Seattle-based real estate brokerage company, in 2020. Now, the parties have agreed to settle, and under the terms of the deal, Redfin is set to make many changes to its sales tactics, including adjusting its minimum housing price policy as well as modifying other unfair sales practices discriminating against people of color.
Redfin will close the gap, in general, by upping racial diversity in its workforce, advertising its services to reach nonwhites, and requiring agents and partner firms to attend training. It will pay out $4 million.
“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 original lawsuit said. The plaintiffs also stated, “The changes will increase access to Redfin’s real estate services across the country and help counter redlining and residential segregation. These changes will remain in effective for at least three years after rollout.
Redlining consists of illegal sales practices in which banks will not allow for home loans requested by an individual who resides in an area considered to be a poor financial risk.
The groups also alleged that Redfin’s current policies “limit or deny services for homes priced under certain values,” which can “perpetuate racial segregation and contribute to the racial wealth gap.” The lawsuit specifically alleged 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.” It was brought against the company in the federal district court in Seattle.
“Our goal was to ensure that all neighborhoods are treated fairly and have access to the full range of services provided by any real estate company,” said Lisa Rice, president and CEO of NFHA. “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.”
Redfin issued a statement saying it would rather “spend money on advancing fair housing…than on litigation.” The company stressed that making this decision does not equate to an admission of any wrongdoing with its sales practices.
“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 statement indicated. “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. Redfin hasn’t broken the law and we continue to stand behind our business practices.”
Redfin currently operates in 95 markets in the U.S. and Canada and has generated $195 billion to date in sales.