Homes in predominantly white neighbourhoods in Chicago are being routinely listed on private agent networks – a phenomenon that’s being blamed on amplifying inequality and segregation.
Brokerages offer “exclusive access” to some homes on its listings network to entice new buyers.
However, homes sold via the listings service Midwest Real Estate Data (MRED) are 2.2 times more likely to be in majority-white neighbourhoods than non-white, Zillow analysis shows.
Orphe Divounguy, senior economist at Zillow, said: “Chicago shows what can happen when parts of the housing market move into the shadows.
“Private marketing might sound appealing, but it risks deepening segregation and limiting opportunity, moving us further from the fair and open housing market consumers deserve.
“The data show clear disparities, and good intentions are no longer an excuse for expanding digital redlining.”
In majority-white areas, 7.9% of homes for sale within MRED were listed privately, compared to 3.4% in non-white regions.
Michael Chavarria, is executive director of the HOPE Fair Housing Center, which works to eliminate discrimination in housing across much of Illinois.
He said: “57 years after the Fair Housing Act promised an end to housing segregation, we are still waiting for that promise to be fulfilled,”
“Zillow’s decision to confront the data and its calls for the real estate community to open listings to all consumers is an example the industry must follow. Homebuyers deserve the right to see all the homes available in an area — not to have those choices quietly made for them.”
A study by a University of North Carolina professor described how private listings unintentionally reinforce racial segregation, exactly what Zillow’s analysis sees playing out in Chicago.
Elizabeth Korver-Glenn, assistant professor of Sociology, wrote: “I learned that the real estate agents tap their social networks as primary tools for generating business.
“Because those networks are racially structured, white real estate agents end up working primarily with white home buyers and sellers, while Black and Latino agents deal with more diverse sets of clients.
“Because white agents’ networks are overwhelmingly comprised of other whites, this means that Asian, Black and Latino consumers are disproportionately excluded from finding out about informally listed homes for sale handled by white agents.”
Korver-Glenn wrote that private listings are “a prime example of a practice that legislators [who are] committed to interrupting stubbornly persistent racial segregation in housing markets can and should target.”