The U.S. Department of Housing and Urban Development, HUD, filed a lawsuit against Facebook on March 28, 2019. HUD claims that Facebook helped advertisers engage in housing discrimination.
What is housing discrimination?
Housing discrimination happens when a provider limits access to housing-related services. A practice doesn't have to be intentionally discriminatory to be illegal. Examples of discrimination include:
- Telling an applicant with a service dog that an available home has been rented
- Discouraging a gay couple from buying in a suburban community ("You'd probably be happier downtown")
- Denying a mortgage to a qualified pregnant woman because "she'll probably quit working after she has the baby"
One way of discouraging people from renting or applying for a mortgage is to make sure they don't know what's on offer. For instance, by advertising a rental only in a small Christian newsletter, the landlord is effectively discriminating against non-Christians who might want to rent the home.
How HUD says Facebook discriminated in housing searches
Marketers have long used "targeting" to maximize advertising results and now use of the concept is being called into question by HUD. The federal department has announced that it's "charging Facebook with violating the Fair Housing Act by encouraging, enabling, and causing housing discrimination through the company's advertising platform."
Targeting has been used for decades by the direct-mail industry, and the idea has been adopted by online marketers. Targeting seeks to reduce advertising costs by sending messages to only the most-likely purchasers of goods and services. For instance targeting by:
- Location. A pizza shop might send ads to every home address within a one-mile radius of the store.
- Group identity. A maker of pipes and valves might send mail to every plumber in their state.
- Interests. A boot manufacturer might send ads to individuals who belong to local hiking clubs in certain locations.
HUD does not say that targeting potential prospects is unacceptable. Instead, it argues that targeting cannot be used to discriminate in violation of the Fair Housing Act.
Facebook, HUD alleged, "enabled advertisers to exclude people whom Facebook classified as parents, non-American-born, non-Christian, interested in accessibility, interested in Hispanic culture or a wide variety of other interests that closely align with the Fair Housing Act's protected classes.
HUD is also charging that Facebook enables advertisers to exclude people based upon their neighborhood by drawing a red line around those neighborhoods on a map. Facebook also allegedly gives advertisers the option of showing ads only to men or only to women.
Housing discrimination made easy?
Federal law bans housing discrimination associated with "the sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, national origin or disability."
HUD claims that because of the way Facebook "designed its advertising platform, ads for housing and housing-related services are shown to large audiences that are severely biased based on characteristics protected by the Act, such as audiences of tens of thousands of users that are nearly all men or nearly all women."
Another allegation is that Facebook "has offered advertisers hundreds of thousands of attributes from which to choose, for example to exclude 'women in the workforce,' 'moms of grade school kids,' 'foreigners,' 'Puerto Rico Islanders,' or people interested in 'parenting,' 'accessibility,' 'service animal,' 'Hijab Fashion,' or 'Hispanic Culture.'
HUD also claims that Facebook "offered advertisers the ability to limit the audience of an ad by selecting to include only those classified as, for example, 'Christian' or 'child free.'"
How can you avoid housing discrimination?
You may suspect that you've been discriminated against if you did not get the rental you applied for. Or if the community you wish to move to never seems to have anything on the market, yet property is clearly changing hands. Or your mortgage lender adds a surcharge for loans in your neighborhood because it's "high risk."
What can you do?
If you believe that your mortgage lender denied your application or is overcharging you, your best bet is asking competing lenders to bid for your business. And shopping for a mortgage online, where no one can see you and where you needn't provide personally-identifying information adds more protection.
If you get denied a loan, the lender must by law furnish an Adverse Action Notice. Landlords must also provide Adverse Action Notices. Adverse action notices can tell you if the lender or landlord's action was legal. The reason provided for denying you must be true (you really do have a 550 FICO score) and legal (denial based on credit score is legal).
if you want to live in a certain community, ask your real estate agent to actively search for homes on the market there. Don't rely on advertising to find homes. And complain if your agent discourages you from looking in certain neighborhoods or tries to steer you to other places.
If you suspect discrimination, call the U.S. Department of Housing and Urban Development at 800-669-9777 or visit the HUD website to file a complaint or get answers to your fair housing questions. The HUD website also lists HUD's regional fair housing offices, fair housing partners, and information and forms for filing a fair housing complaint.
