Redfin Settles in ‘Digital Redlining’ Case

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Redfin has agreed to pay $4 million to settle a discrimination lawsuit that accused the real estate company of failing to provide brokerage services for homes that were listed below a certain price. In the lawsuit, the practice was dubbed “digital redlining.”

Redfin has admitted no wrongdoing in the settlement but has agreed to take steps to address any discrepancies between white and nonwhite areas they serve.

The lawsuit was brought in 2020 by the National Fair Housing Alliance, along with nine other fair housing organizations nationwide. NFHA alleged that communities of color received fewer services and discounts from Redfin than home buyers or sellers in predominantly white areas due to a “digital redlining” practice.

The real estate company had in place what it called a “minimum price limit.” The company would not make the full range of its services available to properties below a certain limit—that included its real estate agents, professional photos, and property promotion. The lawsuit alleges that the limit disproportionately affected homes in minority communities.

“Describing a price-based policy as redlining is sensationalistic and wrong because Redfin serves all neighborhoods in the metro areas where we operate,” a company spokesperson told Fast Company. “We do not make service determination based on race or the demographics of the neighborhood. Home price is the only fair and objective way to make that determination because home price determines the fees we earn.”

As part of the $4 million settlement, Redfin has agreed to end its “minimum price limits” policy. It would also present its employees and agents with fair housing training developed by NFHA.

But the real estate company said it will use “price thresholds” to determine whether to connect buyers and sellers with Redfin brokers. That would allow Redfin to manage agent capacity since it tends to field more requests than it can meet, a company spokesperson told The Real Deal.

Redfin also will launch a “monitoring and alert system,” which will identify when minimum price points in communities of color exceed those in majority-white neighborhoods. Redfin said it will take corrective actions based on any discrepancies found.

“Redfin hasn’t broken the law and we continue to stand behind our business practices,” the company said in a statement. “We recognize there is much to be done to make housing fair and to reverse decades of inequality, and we will continue to do our part.”