Housing Discrimination Via Algorithms: An Alarming Trend

Companies are collecting thousands of data points about consumers. But how that information is then used to target ads has fair housing advocates concerned.

November 2, 2018

Housing discrimination is playing out in the form of hidden online calculations that companies can use to exclude certain populations from viewing residential real estate ads online, said Lisa Rice, president and CEO of the National Fair Housing Alliance, a civil rights agency that works to combat housing discrimination.

Companies like Facebook use proprietary data for their advertising platforms, collecting thousands of pieces of data about users. They can then use that information to allow advertisers to target who sees certain ads online. Organizations like the NFHA are growing concerned that the lack of transparency in these algorithms and how all these demographic variables, such as race, religion, sex, income, and more, are being weighted to possibly discriminate among certain classes in housing. Rice addressed such growing fair housing concerns at the session “Fair Housing, Social Media, and Equality,” during the REALTORS® Conference & Expo in Boston on Thursday.

A diverse group of people standing with each other.

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The NFHA, along with other housing groups, filed a lawsuit earlier this year against Facebook. They accused the social media giant of violating the Fair Housing Act, which prohibits discrimination based on race, color, religion, sex, handicap, familial status, or national origin on home sale and rental advertisements.

In particular, the NFHA criticized the fact that Facebook’s ad tool allowed advertisers to use a customization option called “Ethnic Affinities” to select which racial groups they did not want to view certain housing-related ads that appeared on Facebook. The list included every racial category except for whites, Rice said.

In August, Facebook announced that it had removed more than 5,000 targeting options from its advertising platform, including the ability to designate which racial classes could or could not see housing-related ads. The company denied any wrongdoing but said it will work to address concerns about its advertising platform.

Rice said the NFHA is working with Facebook to ensure that its housing ad tool complies with the law. But she added that the issue reflects the fact that the nation still has a long way to go in addressing equal access to housing. Technology as a potential tool for discrimination adds an extra layer in the fight to guard against fair housing violations.

The real estate industry has been commemorating the 50th anniversary of the Fair Housing Act this year, but “we still have a long way to go,” Rice said. “Our society is still hypersegregated.” She urged real estate professionals to take a bigger role in helping to identify fair housing barriers in local communities so that solutions could be implemented.

Fair housing is a win for agents and brokerages too, Rice said. “If you treat everyone the same, you’ll extend your business opportunities,” she said. “There are emerging market opportunities that you may not have tapped into yet. If we advance fair housing, these market segments can offer greater opportunities.”