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The U.S. Department of Housing and Urban Development (HUD) has filed housing discrimination charges against Facebook. According to a statement on Thursday, HUD alleged that Facebook’s advertising platform is “violating the Fair Housing Act by encouraging, enabling and causing housing discrimination.”

“Facebook is discriminating against people based upon who they are and where they live,” said HUD Secretary Ben Carson in the statement. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

“Even as we confront new technologies, the fair housing laws enacted over half a century ago remain clear—discrimination in housing-related advertising is against the law,” HUD General Counsel Paul Compton said. “Just because a process to deliver advertising is opaque and complex doesn’t mean that it exempts Facebook and others from our scrutiny and the law of the land. Fashioning appropriate remedies and the rules of the road for today’s technology as it impacts housing are a priority for HUD.”

HUD’s charge follows a formal complaint made against Facebook this past August asserting that the platform allowed advertisers to single out individuals based on gender, disability, religion, and more, in housing-related marketing.

The Fair Housing Act—federal laws and housing-related protections enacted in 1968—prohibits discrimination based on race, color, religion, national origin, gender, disability and familial status. According to HUD, Facebook’s advertising allows 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.”

Earlier this month, the National Fair Housing Alliance (NFHA)—and other organizations which made up the “Fair Housing Groups” in a recent lawsuit against Facebook, including the Fair Housing Council of Greater San Antonio, Fair Housing Justice Center of New York and Housing Opportunities Project for Excellence—settled the charges, with an agreement that Facebook would make sweeping changes to its advertising systems.

In response, Facebook recently announced an overhaul of its advertising platform that will allegedly remove any targeting options that allow people and companies to discriminate against fair housing-protected classes. The company has partnered with the NFHA to create in-house training for Facebook’s staff and leadership surrounding the fair housing laws; the NFHA will also help ensure that Facebook’s advertisers comply with federal housing and lending laws.

“This settlement positively impacts all of Facebook’s 210 million users in the U.S., since everyone is protected by our nation’s fair housing laws,” said Lisa Rice, president and CEO of NFHA, in a statement at the time. “As the largest digitally-based advertising platform and a leader in tech, Facebook has an obligation to ensure that the data it collects on millions of people is not used against those same users in a harmful manner.”

According to the NFHA, Facebook will be creating a separate advertising portal called “HEC portal” for any persons looking to advertise their housing-, employment- or credit-related products and services. Targeted advertising will be limited to prevent illegal discrimination, and housing advertisers will no longer be able to target consumers based on the protected classes, as well as ZIP codes. Facebook will also be restructuring its “Lookalike Audience” feature and enforcing an anti-discrimination self-certification, which advertisers must agree to in order to place ads.

“We’re surprised by HUD’s decision, as we’ve been working with them to address their concerns and have taken significant steps to prevent ad discrimination,” Facebook said in a statement on Thursday. Facebook reports that negotiations with the housing agency over the issue had allegedly broken down because the agency wanted access to too much user information “without adequate safeguards,” according to the New York Times.

With the charge, HUD looks to address any outstanding fair housing violations regarding Facebook’s advertising practices, and also seeks to attain compensation for “the harm Facebook caused and continues to cause.”

In response to HUD’s decision to pursue the charge following the recent NFHA settlement and Facebook platform changes, Peter Romer-Friedman, Counsel, Outten & Golden, who is not involved in the case, says, “We settled five cases against HUD last week [on behalf of other housing organizations] and they were groundbreaking. At the same time, the HUD complaint identifies a range of issues that our settlements did not reform. Most significant is what we call the delivery algorithm, which determines who gets the advertisements.

“We are going to continue to pursue cases that work toward algorithmic neutrality, or algorithms that take into account protected status. It’s important that everyone has the same opportunity,” he adds. “Everyone needs a job, housing and credit if they want to survive and thrive in our economy.”

“Under our settlement, Facebook has agreed to specifically study the potential for bias with respect to the Lookalike tool and its impact on delivering advertising,” says Morgan Williams, NFHA’s general counsel. “Facebook has expressly agreed to meet with NFHA over the next three years to discuss the findings and other potential modifications. HUD’s charge raises specific concerns about these outstanding elements. We are hopeful that we can work with HUD, Facebook and civil rights partners to ensure that Facebook’s platform operates in a manner that doesn’t serve as a tool for discrimination moving forward.”

The National Association of REALTORS® shared the following statement with RISMedia:

“Just last year, America recognized the 50th anniversary of the Fair Housing Act. As efforts are continuously made to strengthen and support this landmark legislation, NAR is committed to working with both public and private entities to eliminate discrimination from our housing market,” says NAR President John Smaby. “However, as various online tools and platforms continue to transform the real estate industry, our understanding of how this law is enforced and applied must evolve as well. While NAR is reviewing the full scope of today’s charges, REALTORS® will continue to support HUD’s efforts to defend fair housing laws and ensure consumer protections extend wherever real estate is marketed.”

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

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