Recently, housing groups in New York and across the country filed a lawsuit accusing the real estate broker Redfin of what critics call digital redlining. The housing groups claim the brokerage has racially discriminated against nonwhite real estate buyers, denying them special services which have, they say, the brokerage has disproportionately extended to white buyers.
What is redlining?
The term redlining refers to an illegal form of discrimination in which financial organizations and others refused to grant mortgages to African American or other minority real estate buyers in certain neighborhoods, steering them instead into areas that were considered less desirable. Once widespread, the practice was prohibited by the Fair Housing Act, which is part of the Civil Rights Act of 1968.
The housing groups claim that Redfin practices what appears to be a race-neutral policy of extending special services and discounted commissions to buyers in certain neighborhoods. However, the groups claim, these neighborhoods are predominantly white, and therefore in practice the brokerage is giving its customers unequal treatment. They say it means white buyers in white neighborhoods are more likely to get these services, and nonwhite buyers in nonwhite neighborhoods are much less likely to get the lower commissions and other perks. In fact, Redfin does not extend any services at all in many neighborhoods.
Redfin has denied racial motives for its actions, arguing that its decisions about when to extend the special services is based entirely upon the price of the properties involved. If the company can show a legitimate business purpose for why it makes its decisions, it may be able to show that it did not practice illegal discrimination.
Business litigation can be extremely complex, and highly emotional when it involves accusation of racial discrimination. It’s important for plaintiffs and defendants to seek out help from lawyers with experience in these difficult areas of the law.