Online fair housing

online fair housing
Fair Housing (infographic from nationalfairhousing.org)

Facebook has been under scrutiny for a number of issues, including privacy rights and political ads.  In an effort to enforce online fair housing, HUD has made a complaint alleging that the social media platform has violated the Fair Housing Act. Online fair housing is a serious issue. HUD’s enforcement of fair housing extends to online social media and sharing platforms.

The US Department of Housing and Urban Development complaint (hud.gov) states that:

Facebook unlawfully discriminates by enabling advertisers to restrict which Facebook users receive housing-related ads based on race, color, religion, sex, familial status, national origin and disability.  Facebook mines extensive user data and classifies its users based on protected characteristics.  Facebook’s ad targeting tools then invite advertisers to express unlawful preferences by suggesting discriminatory options, and Facebook effectuates the delivery of housing-related ads to certain users and not others based on those users’ actual or imputed protected traits…The alleged policies and practices of Facebook violate the Fair Housing Act based on race, color, religion, sex, familial status, national origin and disability.

HUD’s August 17th press release that announced the complaint alleges that Facebook

“invites advertisers to express unlawful preferences by offering discriminatory options, allowing them to effectively limit housing options for these protected classes under the guise of ‘targeted advertising.’”

HUD emphasizes that the Fair Housing Act “prohibits discrimination in housing transactions including print and online advertisement on the basis of race, color, national origin, religion, sex, disability, or familial status.”

HUD’s Secretary-initiated complaint follows the Department’s investigation into Facebook’s advertising platform which includes targeting tools that enable advertisers to filter prospective tenants or home buyers based on these protected classes.

Anna Maria Farias, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity who filed the complaint, stated:

The Fair Housing Act prohibits housing discrimination including those who might limit or deny housing options with a click of a mouse…When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it’s the same as slamming the door in someone’s face.”

Past online fair housing allegations

Allegations of online fair housing violations are not new for Facebook.  ProPublica alleged in 2016 that Facebook allowed advertisers to purchase discriminatory ads through a targeted advertising platform (Facebook Lets Advertisers Exclude Users by Race; propublica.org; October 28, 2016).  The targeted advertising platform had a “Ethnic Affinity” section (at that time, it was alleged that Facebook assigned “Ethnic Affinity” to subscribers based on posts and “likes”).  Facebook claimed that “Ethnic Affinity” is different than race, and was part of a “multicultural advertising” effort.

Following ProPublica’s investigative reporting, HUD briefly investigated the matter.  Facebook was said to have changed the targeted advertisement platform by moving “Ethnic Affinity.”  Additionally, an anti-discrimination advertising system was to be implemented.  However, a follow up investigation found that the reporters were able to purchase housing advertising that should have been rejected for discriminatory preferences (Facebook (Still) Letting Housing Advertisers Exclude Users by Race; propublica.com; November 21, 2017).

Facebook is not the first website to be accused of online fair housing violations.  In 2006, a civil rights non-profit sued Craigslist for discriminatory housing ads that were posted by users.  At the center of the matter was if Craigslist was considered a publisher.  The case was dismissed based on a Communications Decency Act provision that states, “…[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  Even though the suit was dismissed, Craigslist worked with HUD and housing advocacy groups to implement technology to prevent discriminatory words and phrases in housing ads (craigslist.org).

Original published at https://dankrell.com/blog/2018/08/26/online-fair-housing/

Copyright© Dan Krell
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Real estate big tech

real estate big tech
Real estate tech (infographic from nar.realtor).

The business of real estate seems to be turning away from actually selling homes and wants to be housing big tech.  Nothing is as it seems.  Real estate companies are now technology companies, and technology companies want more of your information to control your opinion and behavior.

How much control should big tech have over what you think and do?  It’s a compelling controversy that is currently being debated.  It’s not clear when the discussion exactly began, but there have been many who have been wary of big tech for decades.  Even President Eisenhower had something to say about it in his second 1961 farewell speech (the first being famous for his warning of the military-industrial complex) he also warned. “…we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

Once called paranoid, those who feared big tech are being vindicated by the acknowledgments of data collection and leaks to third party users.  Additionally, reports of censorship and behavioral control are slowly making its way to public awareness.  Sounding like a movie plot about a dystopian future, consider the internal Google video that was leaked by The Verge earlier this year (Google’s Selfish Ledger is an unsettling vision of Silicon Valley social engineering; theverge.com; May 17, 2018).  The leaked video (seen here) discusses the use of data to not only change opinions and shape viewpoints that correspond with the company’s values, but to change behavior and shape society to “a directed result.”

Imagine being told where to buy a home, and which real estate services to use based on your behavioral data.  Big tech’s “guiding” of real estate consumers to homes and neighborhoods based on behavioral modeling algorithms seems like it could save time and effort for the consumer.  But it could also be considered steering, which is considered to be a fair housing no-no.

But big tech wants more of your data, at best to improve modeling algorithms.  According to a report in the Wall Street Journal (Facebook to Banks: Give Us Your Data, We’ll Give You Our Users; wsj.com; August 6, 2018), Facebook has been in conversations with banks to access users’ accounts and transactions.  The social media platform denied the story the next day.  However, the Wall Street Journal reporting by Emily Glazer, Deepa Seetharaman and AnnaMaria Andriotis is compelling given the report’s sources.  Some experts are also talking about Facebook wanting to become a consumer marketplace.

Zillow is also allegedly expanding its data usage.  Zillow announced this week of their acquisition of Mortgage Lenders of America.  The purchase is said to boost Zillow’s “Offers” program, offering mortgages for home buyers making offers on the site.  However, GeekWire reported (Zillow acquires Mortgage Lenders of America, posts $325M in Q2 revenue, up 22%; geekwire.com; August 6, 2018) Zillow’s CEO Spencer Rascoff as saying in the company’s second-quarter earnings call:

We’re taking our huge advantages, which are our audience and our brand and our resources, and expanding into other business vertically… .”

And it’s not just big tech that wants your data.  Traditional companies are realizing the potential of behavioral modeling and guiding consumer behavior.  Inman reported earlier this year that co-founder Gary Keller proclaimed Keller Williams a tech company (What the hell is Keller Williams doing? Lingering questions from the Vision Speech; inman.com; February 28, 2018).  Keller proclaimed:

“We are a technology company. No. 1 that means we build the technology. No. 2 that means we hire the technologists … We are not a real estate company anymore.”

Big tech is losing touch with the average consumer.  Home buyers and sellers don’t want to be told what to do.  Rather, they want to make organic decisions. While large real estate brokers seem to be moving away from actually selling homes to be real estate big tech, home buyers and sellers are turning to human real estate agents.   Instead of algorithms, buyers and sellers value trusted Realtors to help with the process.

Original located at https://dankrell.com/blog/2018/08/12/real-estate-big-tech/

Copyright© Dan Krell
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Social media and housing

social media
Social media (infographic from dustn.tv)

You should have already realized that all of your internet activity, such as social media, search engines, etc., leaves your digital fingerprints.  In today’s interconnected world, you should assume your online profile, pictures and posts become the intellectual property of the online entities you use .  So, it should not faze you that Facebook founder and CEO Mark Zuckerberg testified before Congress this week because of ongoing privacy concerns.  This week’s congressional dog and pony show will most likely not reveal much.  Nor is it expected to change social media’s influence on the public.

Does social media really affect your opinions and decision making?  Maybe.

Content providers have been criticized for deciding what people view through alleged censorship.  Besides your online social interactions and connections, the ads you see can also influence your opinions and behavior.  Consider Facebook’s targeted advertising system, which has been criticized for violating the Fair Housing Act.  A recent lawsuit alleges that certain groups are being discriminated against because advertisers can target ads based on age, gender, disability, family status, among other criteria (see Facebook Vowed to End Discriminatory Housing Ads. Suit Says It Didn’t; nytimes.com/2018/03/27/nyregion/facebook-housing-ads-discrimination-lawsuit.html).

In the internet age, data collection is big business.  Data collection allows marketing firms to target classes with their clients’ products and opinions.  Content providers have not only been criticized for collecting volumes of personal data, but also for manipulating search results and viewable content.  As it turns out, the FANGs (a collective term used for content providers, such as Facebook, Amazon, Netflix, Google) not only collect your data but can influence your opinions and behavior.  Especially when it comes to buying or renting a home.

You can surmise that real estate content providers (such as Zillow and Realtor.com) shape your opinions too!  They publish opinions and research about the housing market.   They also can influence your choice of real estate professionals.  They promote agents who pay for placements on their sites to get consumer leads.  These real estate professionals touted as “local experts.”

Social media influences housing decisions

A landmark study found direct evidence of social media’s impact on real estate choices.  The 2017 study by Baily, Cao, Kuchler, and Stroebel (The Economic Effects of Social Networks: Evidence from the Housing Market; July 4, 2017; Available at SSRN: dx.doi.org/10.2139/ssrn.2753881) used Facebook data to explore the multiplicity of individuals’ social networks, and then analyzed the effects of people’s interactions on their housing decisions.

They found that, indeed, social media does influence decisions on housing.  The research suggests that social media influences a person’s housing market expectations. When friends experience home price increases, home buyers will pay more for a home and/or buy a larger home. Additionally, renters are more likely to buy a home.  Likewise, when friends experience “less positive house price changes,” home sellers are more likely to accept a lower sale price.  The data also indicates that people will consider real estate an appealing investment when friends experience large home price increases.

The authors acknowledged that although this study examined social media’s influence on real estate outcomes, they suggest that effect is broader and can be applied to other subject matter.

Content providers wield great power.  They manipulate news feeds via algorithms.  They can also decide who they can ban from their sites.   It’s clear that social media’s influence goes beyond data collection.  It’s not only the social interaction among your connections that affect your opinions and behaviors.  It’s also the paid ads and promoted opinions that appear alongside your friends’ posts that solidify expectations and opinions as gospel.

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Technology is the new real estate

I recently wrote about companies that are going through identity crises. Are they real estate companies or are they technology companies? Regardless, the big name real estate disruptors have changed the industry. They have given home buyers control of their home search. They have also given home sellers choices of real estate services and commissions. But the recent trend of real estate companies touting themselves as technology companies may be a signal that large real estate brokerages want more change. But are they mistaking the map for the territory?

Are real estate brokers still interested in selling homes?

technology and real estate
Technology (infographic from nar.realtor)

Last November, the real estate brokerage Compass made headlines because of its ability to raise massive capital investments. In a Compass press release, the company announced raising $100 million in capital (Compass Raises $100 Million in New Investment Round; prnewswire.com; November 8, 2017). The colossal investment comes one year after raising $75 million in capital. The capital is to be used for expanding brokerage offices in new markets as well as “building new technology.”

Compass’ vision is to be “the world’s largest real estate platform.” The press release quoted an investor saying:

“Compass has proven that its technologically advanced platform is incredibly attractive to the industry’s top agents…Their position at the intersection of technology and real estate gives them the unique opportunity to be the single largest holder of real estate data, ushering in a new realm of possibilities for agents and clients alike.”

In a similar move, RE/MAX announced this week of its purchase of booj, a technology company. In a February 26th RE/MAX press release, the acquisition is touted as means to “…deliver core technology solutions designed for and with RE/MAX affiliates. The objective: technology platforms that create a distinct competitive edge for RE/MAX brokerages and agents…” (RE/MAX Takes Bold Step to Provide Best-in-Class Technology; remax.com).

Is the shift to  being a technology company about revenue?

It would seem that recent industry moves may indicate that real estate brokers would prefer to be technology companies. However, the latest trend may be more about generating revenue, raising capital and investor relations than it is about selling homes.

Lizette Chapman’s report on the matter is revealing (Tech Startup or Real-Estate Broker? Fidelity Values Compass at $2 Billion; bloomberg.com; November 8, 2017). Chapman likens Compass to Redfin saying that the company “is almost certainly unprofitable,” although generating massive revenue. In her reporting, Chapman quoted a seasoned real estate agent who was briefly with Compass, “The technology was mostly marketing tools…It was sleek, but I can’t say it was different from anything else out there.”

Although many home buyers and sellers turn to the internet for housing information, they don’t wholly rely on technology when choosing real estate services. According to the National Association of Realtors 2017 Profile of Home Buyers and Sellers (nar.realtor), a majority of home buyers and sellers hired agents with whom they worked in the past, or were referred by friends and family.

The problem with technology is that humans are the ghosts in the machine. The human element, contrary to technology, is erratic, messy, and highly subjective. The human element remains at the core of home buying and selling.

Many consumers recognize that tech and the internet are tools that are often used as gimmicks to get their business. Technology is not a substitute for an experienced real estate professional who can also empathize along the home buying/selling process. The turn to tech only underscores that residential real estate is still a personal business.

Choosing a real estate agent

Choosing a real estate agent is much like searching for a home.  It is an objective and subjective process.

The real estate agent is supposed to be a fiduciary that is supposed to protect your rights and assets.   A real estate agent is supposed to be honest and act with integrity.  They should act in your best interest.

The quality of an agent is not dependent on the firm. Quality agents are affiliated with almost all brokers. If you haven’t already, ask friends and family for their recommendations.

Prepare questions to interview several agents.  The purpose of the interview is to learn about the agent’s professionalism, training, and knowledge base.  You get to hear about their experience, and get a feel how they interact with you.  Besides asking about their experiences, ask how many years they have been selling homes, and if they full time agents.

If you live in an area where agents are licensed in multiple jurisdictions, ask about their experience in the area you plan to buy/sell. Just because they have a license to sell homes doesn’t mean they have extensive experience in that jurisdiction.

Original published at https://dankrell.com/blog/2018/03/02/technology-new-real-estate/

Copyright© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Net neutrality?

net neutrality
Net neutrality (infographic from historymaniacmegan.com)

The National Association of Realtors has always championed net neutrality as a means of internet fairness for small businesses and consumers.  A recent article for Realtor Magazine (the official magazine of the NAR) by Robert Freedman hits the same talking points of many recent NAR articles and statements (How FCC Plan to End Net Neutrality Hurts You; realtormag.realtor.org; November 21, 2017).  Freedman wrote that a reversal of net neutrality rules would “make it harder for real estate companies, multiple listing services, and property data aggregators to provide their services in a cost-effective way.”

The NAR takes the position, like many net neutrality advocates, that net neutrality is good for business and consumers.  A December 15th NAR press release (nar.realtor) stated:

NAR has actively supported net neutrality for years.  We are concerned that a rollback of net neutrality rules could raise costs on business owners, like real estate professionals, who make heavy use of technology and online platforms. In particular, NAR notes that paid-prioritization models and other anti-competitive practices could put small businesses at a significant disadvantage. For example, NAR said, larger companies could pay for internet fast lanes that deliver content to consumers faster on some websites than from others.

But a recent article for the Foundation of Economic Education by Dr. Kyle Swann (Net Neutrality Isn’t Neutral At All; fee.org; December 14, 2017) lays net neutrality’s real issues.  He argues that the growth and innovation of the internet happened during the twenty years prior to FCC regulation.  Prior to the net neutrality rule, internet service providers (ISP’s) and edge providers’ (internet content providers and platforms we use daily) services were offered “subject to mutual agreement.”  He also points out that the FCC’s “primary function” is to regulate media content, and that the FCC’s Open Internet rules “expressly permit ISPs to block, filter and curate content.”  Rolling back the 2015 net neutrality rule shifts ISP oversight from the FCC back to the FTC.  Swann’s answer to an open internet is to promote ISP competition, giving consumers a choice.

During the net neutrality rule, ISP’s were no longer exclusively accused of censorship, fast tracking content, and promotion for payment.  Some content providers were also accused of similar practices.  Rana Foroohar writing for Financial Times (Why Big Tech wants to keep the net neutral; ft.com; December 17, 2017) calls attention to how the larger content providers (FANG) actually benefited from net neutrality.  Some of these FANGs have seen exponential growth in the last several years.  Foroohar, like Swann and others, expresses her opinion that an application of real internet equality and consistency should be consumer driven.

Contrary to NAR’s point that rolling back the 2015 net neutrality rule will make it more expensive to do business on the internet: the cost of doing business on the internet has already become expensive and cost prohibitive for many Realtors.  Some have argued that the prominent real estate content providers have greatly expanded their market share during net neutrality.  These content providers promote the agents who can afford the service the content providers offer.  Needless to say, this paid arrangement does not guarantee home buyers and sellers a competent, ethical or consumer oriented agent.  And it’s not necessarily cost-effective either, because advertising costs are usually passed on to the buyer or seller in the form of admin fees and higher commissions.

The answer may be, as many argue, is competition.  Not just with ISP’s, but with content providers as well. A truly open internet will allow for innovation and increased competition, allowing the consumer to choose the winners and losers.  Dr. Swann is correct in saying in the article mentioned above, Whatever side of this you’re on, it’s quite probable that the people you’re demonizing want the same things you want.

Original published at https://dankrell.com/blog/2017/12/23/net-neutrality/

Copyright© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.