Study Finds Racial Discrimination in On-Line Advertising

A working paper released by two Harvard Business School professors found price discrimination in on-line listings on the Airbnb.com website, which advertises itself as “a trusted community marketplace for people to list, discover, and book unique accommodations around the world.”

According to the study, African Americans who listed housing for rent in New York charged (and received) less than whites advertising comparable housing. Because the site enourages people listing property to rent to post a picture of themselves in their listings (in order to build trust between the users), indivduals looking for unit to rent are usually able to determine the host’s race.

The study’s authors did not find that Airbnb.com itself discriminated against users, and the site alerts users to antidiscrimination laws and states that the site  prohibits “content that promotes discrimination, bigotry, racism, hatred, harassment or harm against any individual or group, and we require all users to comply with local laws and regulations.”

According the study’s abstract,

Using a new data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about quality of the rentals, we show that non-black hosts charge approximately 12% more than black hosts for the equivalent rental. These effects are robust when controlling for all information visible in the Airbnb marketplace. These findings highlight the prevalence of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust.

While noting that they do not believe that Airbnb.com is liable for discrimination based on its policies, the study’s authors conclude:

Given Airbnb’s careful consideration of what information is available to guests and hosts, Airbnb might consider eliminating or reducing the prominence of host photos: It is not immediately obvious what beneficial information these photos provide, while they risk facilitating discrimination by guests. Particularly when a guest will be renting an entire property, the guest’s interaction with the host will be quite limited, and we see no real need for Airbnb to highlight the host’s picture.

To read the full working paper, click here.

HUD Finds City of Dallas in Noncompliance with Fair Housing Laws

In a 29-page letter dated November 22, 2013, the U.S. Department of Housing and Urban Development (HUD) found that the City of Dallas, TX, was in noncompliance with a number of fair housing and civil rights laws. The finding came as a result of a complaint filed by Curtis Lockey and Craig MacKenzie, affordable housing developers, who had proposed a low-income housing development in downtown.  The developers contended that the City’s refusal to allow the project to be built was discriminatory based on race, national origin, and disability. The developers are represented by Michael Allen, with the civil rights firm of Relman, Dane & Colfax, based in Washington, D.C.

 A Dallas Observer blog posting about the HUD findings notes:

Lockey and MacKenzie, now supported by HUD, accuse the city of conspiring to kill their 1600 Pacific project in order to stop it from being available to poor renters who receive federal rent subsidies. The HUD letter quotes the city’s director of economic development, Karl Zavitkovsky, as saying the city didn’t want any Section 8 voucher recipients in the building at all.

The HUD finding has been likened to the lawsuit brought by the New York-based Anti-Discrimination Center against Westchester County, NY. In the Westchester case, a federal judge ruled that the County had engaged in repeated false reprsentations that it was in compliance with fair housing laws. The Westchester case was settled in 2009 with the County agreeing to $62 million in relief and damages.

To read HUD’s letter regarding the City of Dallas, click here.

To read a blog posting on the Dallas Observer, about HUD’s findings, click here.

HUD, Deutsche Bank Subsidiary Settle Lending Discrimination Case

On November 5, 2013, the U.S. Department of Housing and Urban Development (HUD) announced that it had reached a settlement with MortgageIT, Inc., Deutsche Bank subsidiary, regarding claims that the lender had discriminated in making mortgage loans. HUD had alleged that the lender discriminated against African American and Hispanic borrowers with practices that led to African Americans and Latinos being charged higher Annual Percentage Rates (APRs) and fees than similarly-situated white borrowers, and denied minority applicants loans more often than similarly-situated white applicants. Under the settlement, MortgageIt will pay $12.1 million to compensate borrowers nationwide who were unfairly been denied a loan or whose loans may have contained terms and conditions that violate the Fair Housing Act. Any funds remaining after all victims have been compensated will be distributed to qualified organizations that provide credit and housing counseling, financial literacy, and other related programs that assist African American and Hispanic potential, current, and former homeowners.

According to HUD a press release announcing the settlement,

This agreement is the result of a complaint that HUD’s Assistant Secretary for Fair Housing and Equal Opportunity filed against MortgageIT, alleging that the company discriminated against African American and Hispanic borrowers by underwriting, approving, purchasing, and securitizing mortgage loans in a manner that allowed pricing and denial disparities on the basis of race and national origin. A HUD review of MortgageIT’s 2007 and 2008 internal loan data alleged that African American and Hispanic borrowers paid APRs that were eight to ten basis points higher, on average than similarly-situated white borrowers. In addition, HUD alleged that African American borrowers were 65 percent and Hispanic borrowers 72 percent more likely to receive higher priced loans than similarly-situated white borrowers, African American and Hispanic borrowers also allegedly paid, on average, $707 and $906 more in fees, respectively. HUD also alleged that African-American applicants were 45 percent more likely to be denied a mortgage loan than similarly-situated white borrowers. Hispanic applicants were allegedly 35 percent more likely to be denied.

To read HUD’s press release regarding this case, click here.

Fair Housing Project Testing Coordinator Position Announcement

The Fair Housing Project of Legal Aid of North Carolina (LANC) is currently looking for a Testing Coordinator to assist us in our systemic and complaint-based testing program. Applications are due by November 11, 2013. For the full position announcement, please visit the LANC website by clicking here.

Asheville-Buncombe CRC Opening for Executive Director

The Asheville-Buncombe Community Relations Commission is conducting a search for a new Executive Director. Applications are due by November 11, 2013. Details and a job description can be found by clicking here.

Report connects NC residential segregation to housing, environmental justice, education disparities

A September 2013 report by the UNC Center for Civil Rights examines the connection between residential segregation in North Carolina and access to essential services and opportunities. “The State of Exclusion: An Empirical Analysis of the Legacy of Segregated Communities in North Carolina” maps the potential impacts of “community exclusion” in five areas: housing, environmental justice, voting rights, municipal services, and education. The report finds dramatic disparate impacts in housing, environmental justice, and education such that Latino and African American communities are significantly more affected by these barriers than the general state population.

Using census data, the report’s holistic analysis focuses on the interrelated and persistent and overlapping challenges faced by North Carolina’s “excluded communities,” comprised mainly of low-income non-white residents.

By mapping data on these measures of inclusion, the report specifically highlights the phenomenon of “municipal underbounding,” wherein “a municipality’s limits exclude a neighborhood that would otherwise be within the municipal limits based upon its location, density, and history.” Such underbounded communities may still be subject to the municipality’s zoning jurisdiction but are barred from voting in city elections and do not receive municipal services.

In examining housing disparities, “The State of Exclusion” report indicates that as home ownership is a crucial indicator of wealth, the percentage of people in a community that rent can show wealth disparity.  While less than a third of the North Carolina general population lives in rental housing, more than half of excluded communities’ residents do.

To analyze environmental justice issues, the report examines how likely an excluded community is to be located near a solid waste facility, which often serves a nearby majority-white town. For example, while only 5% of the general population lives within one mile of a solid waste facility, more than 10% of majority-African American excluded communities do. The report also examines excluded communities’ proximity to quality public education, finding that Latino and African-American excluded communities are overall twice as likely compared to the general population to have a high-poverty or failing school as their closest elementary school.

The report’s accompanying website, http://www.uncinclusionproject.org/, allows North Carolina’s housing and other civil rights advocates to map excluded communities, presenting the opportunity for additional research on barriers to fair housing faced by vulnerable communities.

The full report is available on the Inclusion Project website: “The State of Exclusion: An Empirical Analysis of the Legacy of Segregated Communities in North Carolina.” (Executive Summary)

National Study Finds Housing Discrimination Against Same-Sex Couples

The first-ever national study of housing discrimination against same-sex couples, released by the U.S. Department of Housing and Urban Development (HUD) on June 18, 2013, found that same-sex couples experience unequal treatment in the rental of housing more often than heterosexual couples in every metropolitan area studied. The study further found that gay male couples experience more discrimination than lesbian couples.

The study, titled “An Estimate of Housing Discrimination Against Same-Sex Couples,” examined possible discrimination in rental properties that were advertised on-line in 50 metropolitan markets across the country in 2011. For each of the nearly 7,000 tests, two emails were sent to the landlord or housing provider — one from a same-sex couple and one from a heterosexual couple. The study looked at the responses of the housing provider to those email inquiries, examining whether the tester was told the unit was available, was asked to contact the landlord, was invited to the see the apartment, or received any response at all.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, disability, and family status. While some states, cities, and other local communities have passed laws to prohibit discrimination based on sexual orientation, federal law does not provide such protection in the private rental market, and North Carolina does not have a law prohibiting such discrimination. However, on February 3, 2012, HUD published a final rule prohibiting discrimination based on sexual orientation, gender identity, and marital status in HUD-funded programs, such as public housing and FHA lending. In addition, HUD has noted that in some circumstances, discrimination based on gender identity could be a form of sex-based discrimination that is prohibited under federal law.

The primary form of adverse treatment same-sex couples encountered in the study was receiving fewer responses to their email inquiries than heterosexual couples did. Ironically, states with legislative protections prohibiting discrimination based on sexual orientation had slightly more adverse treatment for gays and lesbians than in states without such protections.

In the press release announcing the study, HUD Acting Assistant Secretary for Fair Housing and Equal Opportunity Bryan Greene stated:

A person’s sexual orientation or gender identity should not be a reason to receive unfavorable treatment when searching for housing. HUD is committed to making sure that LGBT individuals have equal access to housing opportunities.

To read HUD’s press release about the study, click here.

To read the full report, click here.

To read HUD’s “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” final rule, click here.

 

Study Finds More Subtle Housing Discrimination Persists in US

A new report released by the U.S. Department of Housing and Urban Development (HUD) on June 11, 2013, finds that while blatant acts of housing discrimination have declined in the U.S., “more subtle forms of housing denial stubbornly persist” in both the rental and sales markets. The study, titled “Housing Discrimination Against Racial and Ethnic Minorities 2012,” was conducted by the Urban Institute and is based on over 8,000 controlled fair housing tests conducted in 28 metropolitan areas across the country in 2011 and 2012. It examined the treatment of African Americans, Hispanics/Latinos, Asian Americans, and whites who approached housing providers offering both rentals and homes for sale.

According to a HUD press release, the report shows that

[r]eal estate agents and rental housing providers recommend and show fewer available homes and apartments to minority families, thereby increasing their costs and restricting their housing options. The study concludes this is a national, not a regional, phenomenon.

Specifically, the report found that African Americans who contact rental agents are told about 11% fewer units and shown 4% fewer units than white renters. Latinos/Hispanics learn about 12% fewer units and are shown 7% fewer units than white, while Asian Americans are told about 10% fewer units and shown 7% fewer units.

Discrimination was more evident in the sales market, where African Americans who contacted real estate agents about recently advertised homes were informed about 17% fewer available homes and shown 18% ewer units than white homebuyers. Asian Americans were informed about 15% fewer homes and shown 19% fewer units than whites. There was no statistically significant difference between Latino/Hispanic homebuyers and whites.

HUD Secretary Shaun Donovan noted, “Fewer minorities today may be getting the door slammed in their faces, but we continue to see evidence of housing discrimination that can limit a family’s housing, economic and educational opportunities.”

The report is the fourth in a series of decennial studies of housing discrimination in the rental and sales markets. The study used matched pair testing, in which two testers of different races or ethnicities were sent to a randomly selected housing provider. The two testesr in each pair were matched in gender, age, and family composition and assigned the same financial characteristics. Each tester independently recorded their treatment, which was then analyzed by researchers to determine if there were any differences based on race or ethnicity.

The federal Fair Housing Act makes it illegal to discriminate in the rental or sale of a dwelling based on race, color, national origin, religion, sex/gender, disability, or familial status. North Carolina law also prohibits such discrimination under the State Fair Housing Act.

To read the HUD press release about the report, click here.

To read the full report, click here.

Wells Fargo Bank Settles Fair Housing Complaint Over REO Property Maintenance

On June 6, 2013, the U.S. Department of Housing and Urban Development (HUD) announced that Wells Fargo Bank, N.A., will invest $39 million in 45 communities across the country to settle a fair housing complaint over how it maintained Real Estate Owned (REO) property in a number of communities across the country. REO property is property that a bank or other lender purchases after foreclosure. The complaint alleged that Wells Fargo maintained and marketed REO properties “in a state of disrepair in predominantly African-American, Latino, and other non-White communities” compared to REO properties in predominantly White communities, which were “in a materially better condition.”

The money Wells Fargo has committed to invest is intended to help improve housing in minority neighborhoods that have been hard hit by the foreclosure crisis and will support homeownership, neighborhood stabilization, property rehabilitation and housing development. 

The settlement resolves a fair housing complaint filed by the National Fair Housing Alliance and 13 private fair housing organizations. According to a NFHA press release announcing the settlement,

This is the first-ever agreement regarding the equal maintenance and marketing of REO homes. The agreement is the result of a federal housing discrimination complaint filed in April 2012 with the U.S. Department of Housing and Urban Development (HUD). The complaint alleged that Wells Fargo’s REO properties in white areas were much better maintained and marketed by Wells Fargo than REO properties in African-American and Latino neighborhoods. In addition to the $27 million to promote homeownership, Wells Fargo will pay $3 million to NFHA and the 13 fair housing organizations for costs and damages, including diversion of resources incurred in connection with the investigations, and attorney fees. Wells Fargo is also committing $300,000 for the two national conferences and $250,000 to NFHA and local fair housing centers to hold seminars and address delinquencies and foreclosures.

The parties to the agreement with Wells Fargo are: Denver Metro Fair Housing Center, Denver, CO; Fair Housing Center of Central Indiana, Indianapolis, IN; Fair Housing Center of West Michigan, Grand Rapids, MI; Fair Housing Continuum, Inc., Melbourne, FL; Greater New Orleans Fair Housing Action Center, New Orleans, LA; HOPE Fair Housing Center, West Chicago, IL; Housing Opportunities Project for Excellence, Inc., Miami, FL; Metro Fair Housing Services, Inc., Atlanta, GA; Metropolitan Milwaukee Fair Housing Council, Milwaukee, WI; Miami Valley Fair Housing Center, Dayton, OH; North Texas Fair Housing Center, Dallas, TX; South Suburban Housing Center, Homewood, IL; and Toledo Fair Housing Center, Toledo, OH.

To read the full conciliation agreement, click here.

To read NFHA’s fair housing complaint, click here.

To read HUD’s press release about the settlement, click here.

HUD Issues Guidance on Community-Based Housing for People with Disabilities

On June 4, 2013, the U.S. Department of Housing and Urban Development (HUD) issued new guidance to “encourage participation in state efforts” to assist individuals with disabilities who are “moving out of institutions and into [community-based] housing.” The guidance, titled “Statement of the Department of Housing and Urban Development on the Role of Housing in Accomplishing the Goals of Olmstead,” is part of HUD’s efforts to ensure compliance with the U.S. Supreme Court decision Olmstead v. L.C., in 1999, which held that unjustified segregation of individuals with disabilities violdated Title II of the Americans with Disabilities Act (ADA).

The HUD guidance notes that recipients of federal funding not only are prohibited from discriminating against people with disabilites but also have an obligation to Affirmatively Further Fair Housing (AFFHA). This obligation could include activities such as “providing integrated, affordable housing opportunities for individuals with disabilities,” developing or rehabilitating units that contain “universal accessibility and visitability features that go beyond the minimum accessibility requirements established by federal laws and regulations,” and affirmative marketing, and other “innovative ways to further the integration of individuals with disabilities throughout their communities.”

In a press release issued with the guidance, HUD Secretary Shaun Donovan noted: “There is a tremendous need for affordable housing where individuals with disabilities are able to live and be part of the very fabric of their communities.” Donovan continued by stating

“HUD will continue to work with the Department of Justice, the Department of Health and Human Services, Congress, our grantees, and disability rights organizations to ensure that HUD programs provide meaningful access to integrated housing opportunities for the individuals with disabilities we serve.”

In the guidance, HUD encourages Public Housing Agencies and other housing providers that receive federal financial assistance to “partner with state and local governments to provide additioanl community-based, integrated housing opportunities for individuals with disabilities transitioning out of, or at serious risk of entering, institutions or other segregated settings.” HUD notes that that the guidance is limited to HUD funding and programs and its interpretation of the Fair Housing Act and Section 504 of the Rehabilitation Act, while the Department of Justice has been delegated authority to interpret Title II of the ADA.

To read HUD’s full guidance, click here.

To read the Department of Justice’s statement on Title II of the ADA and the Olmstead decision, click here.