Lawsuit accuses Jacksonville real estate company of racial discrimination in tenant screening process

Defendant JWB “vehemently denies” allegations

JACKSONVILLE, Fla. – A lawsuit filed in Duval County claims a large local landlord’s reliance on tenant-screening algorithms discriminates against rental applicants who are Black.

The lawsuit was filed against JWB Property Management and JWB Real Estate Capital by Jacksonville Area Legal Aid (JALA) in March on behalf of four people who applied to rent homes from the company. The plaintiffs claim JWB violated the Fair Housing Act in rejecting their rental applications because of the existence of an eviction filing against them, even though they were filed in error, or in one case, filed against a different person with a similar name.

The plaintiffs allege it’s a policy that disproportionately affects applicants who are Black. JWB vehemently disagrees.

University of North Florida Professor David Jaffee, who studies housing in Jacksonville, described the allegations brought in the lawsuit as “the tip of the iceberg.”

“There’s not one bad apple, okay? The system is what people have to look at,” he said. “And the system is really rotten.”

He argues the haves are profiting at the expense of the have-nots because big landowners consolidating ownership of rental properties results in higher housing costs and tenants being treated as line items in investment portfolios. He said this dynamic opens the door to the potential for discrimination.

“They’re basically processing more applications, so they’re looking for ways to simplify the process,” he said.

Like many landlords, JWB outsources the screening of rental applicants. It uses the company SafeRent Solutions, which uses “advanced technology models” to compile data on applicants’ credit and rental history to create a score to determine how likely a potential tenant is to cause a loss to a landlord.

It’s a tool that would certainly seem to be helpful to a landlord with more than 5,000 rental properties, like JWB.

According to a 2019 report from the National Consumer Law Center, about 90% of landlords use tenant screening reports, and there have been many lawsuits against screening companies alleging inaccurate results that have resulted in millions of dollars in civil penalties.

The lawsuit filed by Jacksonville Area Legal Aid earlier this year alleges that the screening platform’s algorithm flags rental applicants’ eviction filings, even if they were made in error and ordered sealed by the court. The suit claims JWB denied four plaintiffs’ housing because of the existence of eviction filings against them, even though they had proof they were made in error and dropped.

In court documents, JWB denies that the plaintiffs were denied housing because of the eviction filings, and argued they have “… substantial, legitimate, and non-discriminatory reasons for their leasing policies…”

The plaintiffs allege their experiences show JWB’s screening criteria violate the Fair Housing Act.

Jacksonville attorney Christian Reeves, who is not affiliated with the case, explained.

“[Under] the Fair Housing Act, basically, you cannot discriminate based on race, religion…sex, or familial relationship…or anything of that nature,” Reeves said. “Obviously, this case is specifically about race.”

The suit says JWB’s alleged policy of denying applications based on the existence of an eviction filing disproportionately affects applicants who are Black, because they are more likely to be the targets of eviction filings and because most of JWB’s properties are in areas that are disproportionately Black when compared to the rest of Duval County.

“JWB can basically argue that they use a combination of factors to determine whether someone should be denied or approved,” Reeves said.

The plaintiffs suggest JWB should be reviewing the screening results for mistakes.

“If they’re using some type of algorithm to screen potential renters, and these evictions are coming up that they are incorrect or erroneous, I think they definitely need to go back and see why this is happening, and they’re not going the extra step, because even when these individuals have paperwork to prove that they did not get an eviction, or that it was a mistake, they are still being denied. And I think that is the biggest problem,” Reeves said.

The Consumer Data Industry Association, which is a trade group for companies that collect data on consumer credit and background checks, provided a statement to the I-TEAM, saying, “Tenants expect and demand safe places to live and work. CDIA members help provide safety and security through tenant screening services,” and “Ensuring availability of accurate tenant history data is of paramount importance for the good of housing stability and resident safety.”

Professor Jaffee questions how a computer model alone, without a human being evaluating the background information, can predict if someone will be a good tenant.

“I don’t think it’s accurate at all, and I don’t think that decisions about giving people access to shelter should be determined by an algorithm,” he said. “It’s inhuman.”

Jaffee said the lawsuit filed by JALA is a cautionary tale about artificial intelligence and algorithms and how they can be new vehicles for old types of discrimination.

SafeRent has not responded to the I-TEAM’s requests for comment.

The president of JWB said because of the litigation, they can’t comment other than to say they vehemently deny any allegations of discrimination.

Among the things the plaintiffs are seeking are refunds for their application fees, which range from $75 to $150.

They are also asking for a jury trial, but for now, the court has ordered the two parties to first try to find common ground in mediation.

About the Author:

I-TEAM and general assignment reporter