A popular online real estate brokerage service has agreed to change its policies as part of a $4 million settlement with the National Fair Housing Alliance and nine other fair housing organizations, including one in Milwaukee.
Redfin, a Seattle-based company, was accused in a federal lawsuit of engaging in racially discriminatory practices akin to modern-day redlining. Redfin has strongly denied having such practices.
“They were deciding who got services, whose homes were worthy of being marketed and what areas and what kind of services they would provide,” said William R. Tisdale, president of Metropolitan Milwaukee Fair Housing Council, in an interview.
Their policies can either “perpetuate racial segregation or help create more inclusive, fair housing opportunities,” he said.
The lawsuit, filed in October 2020, highlighted the company’s policy of setting minimum home listing prices in each market for which it will offer services to buyers or sellers.
The fair housing groups had argued the policy served “no legitimate purpose” because the company’s rules already guaranteed a minimum commission regardless of home price.
As part of the settlement, Redfin is getting rid of the minimum home price requirement , as well as making changes to training and recruitment of staff and partner agents. The company did not admit to any wrongdoing in the agreement.
In a statement, Redfin said it will increase its investment “in serving buyers interested in low-priced homes in communities that have historically been underserved by the real estate industry.”
“Since we can’t afford to have our employees sell an unlimited number of homes at money-losing prices, Redfin will continue the general practice of using price to decide whether to serve a customer via a partner or an employee,” according to the statement.
The monetary amount will pay back the fair housing groups for the cost of the lawsuit and underlying investigation into Redfin. It also will be used for monitoring and compliance programs “that expand homeownership opportunities in the cities covered by the lawsuit,” according to a news release announcing the agreement.
In addition to Milwaukee, Baltimore, Chicago, Detroit, Kansas City, Long Island, Louisville, Memphis, Newark and Philadelphia were cited in the lawsuit.
In Milwaukee, Redfin was about eight times more likely to offer no service at all in extremely non-white ZIP codes and did not offer its “best available service” for homes in extremely non-white ZIP codes, an investigation by the local fair housing council found.
The “best available service” meant buyers and sellers were connected to Redfin agents and offered perks. “No service” indicated Redfin did not offer any services for the property.
“Extremely non-white zip codes” were those in which 70% or more of residents did not identify as white, according to census data.
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This article originally appeared on Milwaukee Journal Sentinel: Redfin settles fair housing lawsuit involving Milwaukee council