Long Island Housing Services Joins Federal Discrimination Litigation to Stop Real Estate Redlining
Challenges Redfin’s Service Policies By Alleging Race and National Origin Discrimination
Long Island Housing Services (LIHS), the National Fair Housing Alliance (NFHA) and other fair housing organizations filed a federal lawsuit against Redfin, a national real estate firm based in Seattle, Washington. After a two-year investigation, NFHA determined that Redfin’s minimum home price policy discriminates against sellers and buyers of homes in communities of color in many metropolitan areas.
The groups found that Redfin offered “No Service” for homes in non-White areas at a greater rate than for homes in White areas. Also, Redfin offered its “Best Available Service” at a significantly greater rate in extremely White zip codes compared to extremely non-White zip codes. Click HERE for more examples.
Redfin does not offer its services to everyone. Redfin has a minimum home price policy, below which it does not offer to provide any service – it will not list the house, it will not show a buyer the house, and it will not process offers or handle closings for the house. Redfin’s minimum home price varies from area to area, from city to county, and throughout the year. The minimum price varies across Long Island. The Freeport house shown below had “No Service” despite selling for $499,000.
Redfin’s minimum home price policy has restricted access to services and financial incentives for sellers and buyers of homes in predominantly non-White areas. NFHA’s investigation determined that Redfin offers no services in non-White zip codes at a disproportionately higher rate than in White zip codes in the following areas: Baltimore, MD; Chicago, IL; Detroit, MI; Kansas City, MO/KS; Long Island, NY; Louisville KY; Memphis, TN; Milwaukee, WI; Newark, NJ; and Philadelphia, PA.
“It is extremely distressing that it appears that Redfin has subverted the promise of technology to remove the stain of discrimination from housing, and instead they have added yet another hurdle for Long Islanders to surmount to escape our segregationist history,” said Ian Wilder, Executive Director of Long Island Housing Services, Inc. “As detailed in the recent Newsday series, “Long Island Divided,” Long Island has provided the template for how suburbs can segregate. Long Island’s post-war suburban developments had federal government-funded deed with blatantly racist exclusions which denied African-American veterans the G.I. benefits promised to them.”
“In addition, our local governments’ zoning schemes purposefully segregated persons of color into communities where they could be saddled with inferior schools, inferior government services, inferior health services, and the lion share of environmental poisoning, Wilder stated. “As the Newsday series made clear it is not merely the continuing effect of this historical segregation, that segregation is being reinforced by actors in the housing market today including local real estate agents. When national actors like Redfin seem to create electronic redlining maps, Long Islanders have lost yet another avenue to try to escape segregation.”
“Redlining, and the residential segregation it causes, represents America’s oldest racist and discriminatory real estate policy. The fact that these actions are still occurring, let alone by a major corporation, demonstrates why we need strong civil rights protections now more than ever,” said Lisa Rice, president and CEO of the National Fair Housing Alliance (NFHA). “Redfin’s policies redline communities of color and will further exacerbate the racial wealth and homeownership gaps. We must ensure that all neighborhoods are treated fairly and have access to the full range of services provided by real estate companies. We must also ensure that companies do not use their technologies, including digitally-based platforms, to deny people the housing opportunities and services they deserve.”
Redfin is a national real estate firm based in Seattle, WA. Redfin provides many of its real estate services on-line and has only a handful of physical offices. Real estate agents are Redfin employees and work with both sellers and buyers. Redfin offers its brokerage services at lower fees than traditional real estate brokers, including lower sales commissions and a partial refund to buyers at closing, where permitted by state law.
Among other things, the plaintiffs seek a court order ending Redfin’s minimum housing price policy and other practices that violate the Fair Housing Act. “We cannot allow these blatant civil rights violations to continue. NFHA will do everything in our power to fight back,” stated Lisa Rice.
On behalf of the National Fair Housing Alliance and nine of its organizational members, listed below, the lawsuit was filed by the New York-based law firm of Emery Celli Brinckerhoff Abady Ward & Maazel, LLP and Seattle-based firm MacDonald Hoague & Bayless in the federal district court in Seattle, Washington.
Following are examples of Redfin’s differential service in ten metropolitan areas:
Long Island, NY – August 2020
- 52 times more likely to offer No Service in Extremely Non-White zip codes
- 2 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Baltimore, MD – June 2020
- 73 times more likely to offer No Service in Extremely Non-White zip codes
- 70 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Chicago, IL– December 2018
- 37 times more likely to offer No Service in Extremely Non-White zip codes
- 84 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Detroit, MI – November 2018
- 14 times more likely to offer No Service in Extremely Non-White zip codes
- 82 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Kansas City, MO/KS – January 2019
- 18 times more likely to offer No Service in Extremely Non-White zip codes
- 12 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Louisville, KY – June 2020
- 33 times more likely to offer No Service in Extremely Non-White zip codes
- Redfin did not offer its Best Available Service for homes in Extremely Non-White zip codes
Memphis TN – March 2019
- 17 times more likely to offer No Service in Extremely Non-White zip codes
- 74 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Milwaukee, WI – June 2020
- 72 times more likely to offer No Service in Extremely Non-White zip codes
- Redfin did not offer its Best Available Service for homes in Extremely Non-White zip codes
Newark, NJ – December 2018
- 17 times more likely to offer No Service in Extremely Non-White zip codes
- 36 times more to offer Redfin’s Best Available Service in Extremely White zip codes
Philadelphia, PA – November 2018
- 72 times more likely to offer No Service in Extremely Non-White zip codes
- 68 times more to offer Redfin’s Best Available Service in Extremely White zip codes
About The National Fair Housing Alliance
Founded in 1988, NFHA is a consortium of more than 200 private, nonprofit fair housing organizations and state and local civil rights agencies from throughout the United States. Headquartered in Washington, D.C., NFHA works to eliminate housing discrimination and ensure equal housing opportunity for all people through leadership, education, outreach, consulting, membership services, public policy initiatives, community development, advocacy, and enforcement. LIHS is a member of NFHA.
This investigation was made possible in part through a grant from the U.S. Department of Housing and Urban Development.
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