Redfin settles redlining lawsuit for $4M

Brokerage will eliminate minimum home price for providing services

National /
Apr.April 29, 2022 01:24 PM
Redfin's Glenn Kelman (iStock) Settlement, Lawsuit

Redfin’s Glenn Kelman (iStock)

Redfin will fork over $4 million to settle a discrimination suit that claimed the company failed to provide brokerage services for homes listed below a certain price, a practice that plaintiffs dubbed “digital redlining.”

The suit, brought by the National Fair Housing Alliance in 2020, alleged that under the firm’s minimum home price policy, communities of color received fewer services and discounts than homebuyers or sellers in predominantly white areas.

To address those claims, Redfin agreed to end the policy and said it would no longer decline to refer buyers or sellers viewing homes below a certain threshold to partner agents — those employed by a brokerage affiliated with Redfin.

Although the firm will no longer base referrals on strict price caps, it will continue to use “price thresholds” to determine whether to connect buyers and sellers with Redfin brokers.

A company spokesperson said connecting clients with brokers based on price allows Redfin to manage agent capacity, as the firm often fields more requests than it can handle.

As an added check on potential discrimination under that system, Redfin agreed to implement a “monitoring and alert system” that will flag when minimum price points in communities of color exceed those in majority-white neighborhoods.

Redfin will establish a set of potential corrective actions to address any discrepancies that arise between white and nonwhite areas. Under the agreement, the firm has six months to present that corrective action plan to NFHA, which can then suggest tweaks.

The brokerage, which admitted no wrongdoing, also agreed to ramp up diversity hiring initiatives by building relationships with nonwhite real estate trade groups, holding job fairs at historically black colleges and recruiting from realty firms owned by people of color.

Prior to the lawsuit, Redfin employees criticized the firm for nepotism. Agents said those practices showed the company was not prioritizing diversity in its hiring.

CEO Glenn Kelman told The Real Deal that Redfin was combatting those allegations by advertising jobs to candidates of color for three months before opening them to a wider pool of candidates.





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