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PRESS RELEASE: Open Communities Reaches Resolution in Case Alleging AI Discrimination


January 31st, 2024

Contact: Cheryl Lawrence & Dominic Voz

Tel: 847-501-5760

Open Communities Reaches Accord In Case Addressing Artificial Intelligence Communications With Prospective Tenants

EVANSTON, IL – Today, Open Communities announced resolution of its federal Fair Housing Act litigation filed September 25, 2023, alleging rental applicants receiving housing assistance payments, who are predominantly Black, were systematically rejected through the use of preprogrammed conversational artificial intelligence (AI), which issued statements communicating a blanket denial to renters participating in Housing Choice Voucher (HCV) programs.

After receiving a complaint from Liz Richardson, who interacted with the AI leasing agent on the Defendant property management company’s website and was advised by the AI leasing agent that her source of income assistance would not be accepted, Open Communities, a non-profit fair housing organization in the Northern Chicago suburban area, launched a months-long investigation into AI statements rejecting HCV housing assistance at over 100 properties managed by Defendants, and subsequently filed a complaint in the United States District Court for the Northern District of Illinois. The Complaint can be found here.

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 Cheryl Lawrence, Executive Director of Open Communities,

“this case is at the forefront of civil rights groups’ efforts to prevent the employment of artificial intelligence to amplify and accelerate patterns of discriminatory housing practices. 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, disability and familial status.”

Under the settlement, Defendants have agreed they will not deny applicants based solely on their source of income, and will participate in monitoring by Open Communities for a two-year period. Further, Open Communities and Defendants will work cooperatively to undertake a review of Defendants’ policies and procedures. Open Communities will also provide additional Fair Housing Training to Defendants’ employees nationwide, under the agreement.

Open Communities, Harbor Group International, LLC, Harbor Group Management Co., LLC, Perq Software, LLC, and other Defendants submitted a Consent Decree outlining publicly available settlement terms with the United States District Court for the Northern District of Illinois. Monetary settlement terms remain confidential. The Consent Decree can be found here.

Plaintiffs Open Communities and Elizabeth Richardson are represented by the legal team of Soule, Bradtke and Lambert,

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