PRESS RELEASE Fair Housing Lawsuit Challenges Discriminatory AI Tools Used by Local Housing Provider
Contact: Dominic Voz
September 25th, 2023
Fair Housing Lawsuit Challenges Discriminatory AI Tools Used by Local Housing Provider
Evanston, IL - After a more than six-month fair housing investigation arising from a community member complaint, Open Communities confirmed that a nationwide property management company owning and operating multi-family apartments in North Chicagoland and throughout the U.S. has been intentionally using AI communication technology to systematically reject renters in a manner that has a discriminatory impact on African American applicants. The company and its technology solutions collaborator used preprogrammed conversational artificial intelligence posing as a leasing assistant to detect renters participating in Housing Choice Voucher (HCV) programs and then issue statements communicating their automatic blanket ban.
Plaintiffs Open Communities and Elizabeth Richardson are represented by the legal team of Soule, Bradtke and Lambert, www.SBLLEGAL.com, who filed the lawsuit on September 25th, 2023 in the United States District Court, Northern District of Illinois against Harbor Group Management Co, LLC (HGMC), Harbor Group International, LLC, Azure Partners, LLC, PERQ Software LLC and others (view the case here). Spurred by Ms. Richardson’s complaint, Open Communities investigated Defendants’ practices across several states. The pattern of blanket bans against voucher holders using artificial intelligence was consistent and clear.
Due to our nation's history, the possession of a housing choice voucher is highly tied to race in many regions. Despite being a much lower proportion of the overall population, in Illinois, African Americans make up 78% of voucher holders; in Chicagoland, it's 85%. In fact, voucher holders are overrepresented in all regions where HGMC and PERQ used discriminatory AI to dismiss them before they could even apply for housing – by anywhere from 2x – 10x.
The National Fair Housing Alliance’s 2023 Fair Housing Trends Report confirms “source of income discrimination disproportionately affects renters based on race, disability and gender” and may be used as a camouflage for race discrimination (NFHA 2023 Trends Report). The U.S. Department of Housing and Urban Development (HUD) Office of Fair Housing and Equal Opportunity confirmed in 2021 that policies refusing to rent or lend based on source of income may be “facially neutral,” but may have the
effect of discriminating based on race, because more Black citizens are HCV holders (NFHA 2023 Report, n.9, citing FHEO 8-2-2021).
According to HUD, “The Fair Housing Act bars more than intentionally discriminatory conduct – it also bars policies that have an unjustified discriminatory effect based on race, national origin, disability, or other protected class” (HUD, “Discriminatory Effects Final Rule Fact Sheet,” 2023).
“Property owners, management companies, and companies providing tenant screening services need to ensure they are fully compliant with the Fair Housing Act that protects renters from discrimination on the basis of race, religion, national origin, sex (including gender identity and sexual orientation), disability and familial status,” said Open Communities’ CEO, Cheryl Lawrence.
In addition to working for more than 50 years toward the eradication of housing discrimination and other unjust practices that perpetuate segregation, Open Communities provides HUD-certified housing counseling, conducts community education and outreach, and engages in advocacy to help build thriving and inclusive communities.