Avoiding Fair Housing Violations in a Hyper-Connected World

DRI: For the Defense

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Imagine for a moment that you are a newly minted real estate agent fresh out of college. Your contacts are all mostly single, childless, and in their early to mid-twenties. You have few clients and even less experience, but you probably have something that many of your competitors don’t: deep experience in the world of social media. You grew up in a hyper-connected world, and services such as Facebook, Instagram, Snapchat, and Twitter—for better or for worse—were ubiquitous during your formative years. You used these services to facilitate your social life in college and to maintain a connection with your high school friends. Social media has been fully integrated into your life from a relatively young age.

As a new agent, you are resourceful and hardworking, and it doesn’t take long for you to get your first listing: a small, single-family cottage in an up-and-coming neighborhood. It’s the perfect home for someone in your age cohort: young, single, and with no kids. You want to impress your first client by quickly selling her home, so you turn to Facebook, which has robust, relatively inexpensive advertising tools that allow you to target your audience. The process is simple: you design your ad, draft some copy describing the many qualities of the home, and add some flattering, well-lit pictures of the cottage. Last, but not least, you design your target audience using Facebook's advertising tools: between the ages of twenty-five and thirty-five, single, college educated, and no kids. Click a button to finalize, and your advertisement is broadcast to thousands of potential buyers. What you might not realize, though, is that by using Facebook’s targeted- advertising functions to focus your advertising on the type of clients who you think are most likely to be interested in your listing, you have potentially violated the Fair Housing Act.

Using social media to advertise is an integral part of business marketing. It is a virtual requirement that companies hoping to make it in the twenty-first century use these social media tools to reach valuable markets. Social media is integral to advertising not only because of its ubiquity, but also because it offers a relatively inexpensive and highly effective way to direct advertising to a target audience. As with any new technology, however, data-driven, targeted marketing has created new and unexpected avenues for liability. This article will review the current legal landscape as it relates to social media and the Fair Housing Act. It will discuss the current and relatively aggressive action that the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice are taking toward Facebook, as well as potential actions against other social media companies. Finally, the article will discuss some ways that practitioners can help their clients avoid the multiple pitfalls, traps-for-the-unwary associated with the use of social media for housing advertisement, and lender liability.

The original article, "Avoiding Fair Housing Violations in a Hyper-Connected World," first appeared in the July 2019 issue of For the Defense.