Is Airbnb Responsible for Property Rental Discrimination?
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UPDATED: Oct 8, 2016
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A number of federal and state laws prohibit housing discrimination. Landlords are not allowed to discriminate against prospective tenants because of their race or on the basis of other characteristics that are protected by law.
The internet-fueled sharing economy, however, has given birth to new ways of renting property. Websites like Airbnb connect renters with property owners, particularly for short-term rentals. A question that courts now face is whether companies like Airbnb are responsible for discriminatory acts committed by hosts who make their property available for rental.
Discrimination in Vacation Rentals
Title II of the Civil Rights Act of 1964 prohibits racial discrimination in public accommodations. The law exempts owner-occupied residences that offer no more than five rooms for rental by guests. That exemption might apply to most of the property owners who make rentals available through Airbnb and similar websites.
The federal Fair Housing Act also prohibits discrimination. It exempts owner-occupied dwellings with no more than four rental units and single-family homes. Again, many property owners using Airbnb will fall within one of those descriptions.
Even if the individual property owners are exempt from anti-discrimination laws, do the exemptions apply to websites like Airbnb? Kristen Clarke, the president and executive director of the Lawyers’ Committee for Civil Rights Under Law, argues that website owners may be required to comply with Title II or the Fair Housing Act.
The argument is particularly strong with regard to the Fair Housing Act, which applies to housing rented by brokers, even if the property owner would otherwise be exempt. Airbnb fills the traditional role of a broker by connecting prospective renters and property owners.
Although indulging in more of an analytical stretch, there may also be merit in Clarke’s suggestion that Title II applies because Airbnb functions as “one giant hotel.” As Clarke puts it, “Airbnb’s business competes directly with services provided by hotels,” making it “appropriate to treat its rentals as public accommodations under the law.”
Clarke decided to rent a private apartment when she took a vacation to Buenos Aires. The first three owners she contacted rejected her application. One claimed that the apartment was already reserved for the days she requested even though it showed as “available” on the website.
Airbnb strongly recommends that customers add a photograph to their profile. Clarke wonders whether her photograph, which identifies her as an African-American woman, enabled apartment owners to discriminate against her application.
Clarke’s concerns appear to be well-founded. A 2016 study by Harvard Business School researchers determined that rental requests made through Airbnb by guests with a name that sounds African-American are 16% less likely to be granted than requests made by guests with a name that is commonly associated with white people.
Is Airbnb Responsible?
Even if she could prove that the hosts discriminated against her because of her race, Clarke would probably be unable to use American fair housing laws to recover damages for acts of discrimination committed in Buenos Aires. But Airbnb is an American business that is subject to American law.
Airbnb already faces criticism from people who argue that the sharing economy hurts workers (such as hotel employees) in the traditional economy and erodes the local tax base. As Airbnb struggles to comply with ordinances that municipal governments have enacted to regulate short-term housing rentals, it may be forced to pay more attention to property owners who discriminate against prospective tenants.
At least one discrimination lawsuit has already been filed against Airbnb. Gregory Selden contends that a property owner refused to rent to him when his profile picture identified him as an African-American, but accepted his booking when he made profiles using pictures of white men. He also accuses Airbnb of disregarding his complaint.
Airbnb takes the position that discrimination is “unacceptable,” but it may enable discrimination by encouraging renters to post photographs on their profiles. While the company has adopted policies against discrimination and offers “unconscious bias training” to hosts, it acknowledges that it has “a lot to learn.” A starting place in that learning curve may be a decision to ban photographs of renters and to keep their real names confidential until the host agrees to rent the property.
Whether Airbnb’s current policies are an effective shield against liability is unclear. Airbnb acts as an agent for its hosts, but it has no control over hosts’ rental decisions. It also has little opportunity to detect discriminatory attitudes or to prevent discrimination before it occurs. Under most circumstances, an agent is not responsible for the misconduct of the person the agent serves.
On the other hand, if companies like Airbnb ignore complaints of discrimination, courts are more likely to hold them accountable on the theory that they are enabling illegal behavior. Investigating discrimination complaints and barring hosts from using the website who have engaged in discriminatory acts might be a more effective shield against liability than the mere adoption of an anti-discrimination policy.
As courts are challenged to adapt settled legal principles to the new sharing economy, lawmakers may be called upon to decide whether and when discrimination statutes should apply to companies that act as a broker between renters and landlords. Congress might also want to make Title II and the Fair Housing Act applicable to all property owners who rent property on a short-term basis, so that they can be held accountable for their discriminatory conduct.