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Opening Acts: April 29, 2022

Redfin Agrees to Settlement in Lawsuit Brought by FHJC, LIHS and Other Groups

REAL ESTATE GIANT TO MODIFY ITS MINIMUM HOME PRICE POLICY, EXPANDING ACCESS TO SERVICES IN COMMUNITIES OF COLOR

Today, the Fair Housing Justice Center (FHJC) and Long Island Housing Services, Inc. (LIHS) joined the National Fair Housing Alliance (NFHA) and seven other fair housing organizations from throughout the country in announcing a settlement with Redfin Corporation, one of the nation’s largest real estate services companies. This settlement agreement will expand opportunities for consumers in communities of color on Long Island and across the nation.

Redfin’s elimination of its national minimum home price policy, expansion of real estate services for lower-priced homes in ten metropolitan areas, and payment of $4 million will settle a discrimination lawsuit brought against Redfin by the FHJC, LIHS, NFHA, South Suburban Housing Center; HOPE Fair Housing Center; Fair Housing Center of Metropolitan Detroit; Lexington Fair Housing Council; Metropolitan Milwaukee Fair Housing Council; the Fair Housing Rights Center in Southeastern Pennsylvania; and Open Communities. A joint statement from the organizations can be found HERE.

Redfin, based in Seattle, 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.

After conducting a lengthy investigation, the organizations alleged that Redfin’s minimum home price policy violates the federal Fair Housing Act by discriminating against buyers and sellers of homes in communities of color, and has a substantial adverse impact on those buyers and sellers based on race and national origin. The plaintiffs asserted that policies that limit or deny services for homes priced under certain values perpetuate racial segregation and contribute to the racial wealth gap.

The complaint further alleged that in zip codes with a higher proportion of non-white residents, Redfin offered no service at a disproportionately higher rate than in zip codes with lower proportions of non-white residents. This pattern was evident on Long Island and in other cities covered by the lawsuit, such as Baltimore, MD; Chicago, IL; Detroit, MI; Kansas City, MO/KS;  Louisville KY; Memphis, TN; Milwaukee, WI; Newark, NJ; and Philadelphia, PA. A detailed report of the investigation, along with a series of maps detailing the racial disparities in Redfin’s services on Long Island can be found HERE.

The settlement is expected to serve as a caution to others in the real estate industry that they must exercise care to ensure that their policies and practices, including how they use technology, do not create discriminatory outcomes.

“Redfin has promoted itself as bringing racial justice to real estate through its cutting-edge technology,” stated FHJC Executive Director Elizabeth Grossman. “But this lawsuit shows that companies cannot hide behind seemingly unbiased algorithms when their very business models perpetuate the harmful effects of historic redlining going back multiple generations.”

Redfin has agreed to make changes that will stand for at least three years after an initial implementation period. The company also will implement an outreach and recruiting plan to increase racial diversity in its workforce, advertise its services to reach non-white consumers, and require its agents and local partner realty firms to attend fair housing training.

Settlement proceeds of $4 million will be used to monitor Redfin’s compliance with the agreement, invest in programs that expand homeownership opportunities on Long Island and in other cities covered by the lawsuit, and pay for litigation and investigation expenses.

A copy of the settlement agreement can be found HERE.

“We hope that this settlement with Redfin marks the first step in breaking Long Island’s discriminatory patterns of segregation,” said LIHS Executive Director Ian Wilder. “We will hold corporations to the promise of technology to remove the stain of discrimination from housing, rather than add yet another hurdle for Long Islanders to surmount to escape our segregationist history.”

The lawsuit was filed by the New York City-based law firm Emery Celli Brinckerhoff Abady Ward & Maazel, LLP, and Seattle-based firm MacDonald Hoague & Bayless in the federal district court in Seattle, WA.

The mission of the FHJC, a nonprofit civil rights organization, is to eliminate housing discrimination; promote policies and programs that foster open, accessible, and inclusive communities; and strengthen enforcement of fair housing laws in the New York City region.

LIHS is a private, nonprofit HUD-qualified Fair Housing Enforcement Organization and a federally certified, approved Housing Counseling agency. Founded in 1969, LIHS’s mission is the elimination of unlawful discrimination and promotion of decent and affordable housing through advocacy and education.