Black Homes Are Flooding Due to Racist Policies, Says Company Being Sued for Those Policies

In major U.S. cities, Black and brown neighborhoods are exposed to higher levels of climate change flooding than white neighborhoods due to the racist legacy of redlining, says a company being sued in federal court for allegedly keeping that legacy alive. 

Redlining was a 1930s-era housing policy whereby governments deliberately denied mortgages to people living in undesirable neighborhoods, which were typically non-white areas. These redlined neighborhoods now have $107 billion worth of homes at risk of severe water damage—25 percent higher than the largely white areas that weren’t affected by redlining, according to a new study released by the Seattle-based real estate brokerage Redfin. 

The study, “A Racist Past, A Flooded Future,” didn’t mention that Redfin is being accused in court of perpetuating the same racial inequalities that it’s trying to bring awareness to. In a lawsuit launched last fall, the National Fair Housing Alliance and nine other fair housing organizations allege the real estate company engages in practices that “constitute real estate redlining in a digital age.” 

“Redfin Corporation offers its real estate services in predominately white neighborhoods at a substantially greater rate than it does in communities of color, perpetuating the stark patterns of housing segregation that continue to plague our nation,” reads the litigation. 

Redfin says there’s no contradiction between the lawsuit and its new study. “We always welcome the opportunity to work with fair housing leaders on ways to address tough problems,” a spokesperson told VICE News. “For many years, Redfin has been a leading voice in the industry advocating for policies that make real estate more equitable, and that includes our reporting on race and real estate.” 

But following a two-year investigation, the National Fair Housing Alliance found that 71 percent of homes in predominately white areas of Chicago were offered Redfin’s “Best Available Service,” which includes connecting buyers and sellers to Redfin agents, while only 18 percent of homes in mostly non-white zip codes qualified. 

About 33 percent of homes in the more racially diverse areas didn’t qualify for Redfin’s services at all, while that was the case for only 4.5 percent of mostly white areas. Homes must be listed at a minimum price to qualify for Redfin, but the investigation found the criteria was more flexible and easier to meet in whiter areas. 

“A neighborhood that’s predominantly white, even if it has some lower property values, would get an exception,” said Audrey McFarlane, an associate dean of Faculty Research & Development and law professor at the University of Baltimore, who is closely watching the lawsuit. “There’s a market premium placed on whiteness.”

Redfin has more awareness than most real estate companies of the damage racist investment decisions can cause. But its latest study doesn’t acknowledge Redfin’s own potential role in housing segregation, even as the study calculates in specific detail the severe climate consequences of that segregation. 

Those consequences, Redfin notes, are especially acute in Chicago. “In dollar terms, Chicago has $19.7 billion worth of homes with high flood risk in redlined and yellow-lined areas, compared with $3.6 billion in green-lined and blue-lined areas,” the study says. 

That’s because racist housing policies helped push Black people into areas with denser and older housing, as well as fewer green spaces to absorb heavier rains due to climate change and poorer drainage systems. A long legacy of disinvestment means that disadvantaged neighborhoods all over the U.S. have fewer financial resources to deal with the heavy damage from flooding and other climate-related disasters, the Redfin study says. 

“There’s this need for awareness,”  Redfin’s senior economist Schery Bokhari told VICE News. “Now that we’re thinking so much about climate change and the need to remedy it, there’s this disproportionate impact on minority communities that we need to pay attention to.”

Housing advocates say we also need to pay attention to Redfin’s own practices. 

“Redlining, and the residential segregation it causes, represents America’s oldest racist and discriminatory real estate policy. The fact that these actions are still occurring, let alone by a major corporation, demonstrates why we need strong civil rights protections now more than ever,” Lisa Rice, president and CEO of the National Fair Housing Alliance, has argued. 

This pattern of disproportionately listing white homes also plays out in Baltimore, Detroit, Kansas City, Long Island, Louisville, Memphis, Milwaukee, Newark, and Philadelphia, the group’s claim, resulting in many people of color being unable to sell their home with Redfin. Several of these cities, as Redfin notes, also face the most racially unequal flooding risks.

“The challenge is that we don’t know how to sell the lowest-priced homes while paying our agents and other staff a living wage, with health insurance and other benefits,” Redfin’s CEO Glenn Kelman wrote in a company email last year responding to the lawsuit. “This is why Redfin agents aren’t always in low-priced neighborhoods. It’s why Redfin doesn’t serve many rural towns.”

“We have a long history of expanding into lower-priced communities,” he added. “We want to expand faster.”

The lawsuit is ongoing. The National Fair Housing Alliance said last month, “Leadership from both organizations have since been in contact to further discuss the concerns brought to light.”

Follow Geoff Dembicki on Twitter.