In January 2016, 3 Harvard researchers released a study, “Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment”. They concluded “In a field experiment on Airbnb, we find that requests from guests with distinctively African-American names are roughly 16% less likely to be accepted than identical guests with distinctively White names. The difference persists whether the host is African-American or White, male or female. The difference also persists whether the host shares the property with the guest or not, and whether the property is cheap or expensive.” The study included about 6,400 listing in 5 cities.
It has been decades since regulations for non-discrimination in housing came about. The Federal Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, or disability and was enacted in 1968. Many local laws extend coverage to sexual orientation and age. A landlord must use an objective pre-established evaluation process to select tenants and may consider such things as:
- Credit history
- Rent payment history
- Criminal convictions
The act applies to Real Estate Agents, property owners, landlords and managers. However, there are certain categories that the act does not apply to. It does not apply to senior housing where residents must be 62 or older or where 80% of the units have at least one person who is 55 or older. The act also does not apply to owner occupied housing where there are 4 or fewer units and to owners of single family homes that are rented without the use of a real estate broker and that do not use discriminatory advertising. Private clubs and religious organizations are also exempt when housing is limited to its members.
On the other hand, the Civil Rights Act of 1964, prohibits discrimination in places of public accommodation like hotels, restaurants, sporting events and movie theaters. Since Airbnb serves a similar function as a hotel, it could be argued that the same rules should apply except there is also an exception in this Act for someone renting less than 5 rooms in their own home. Most Airbnb host are smaller.
The researchers in the Harvard study surmised that the amount of information available on the Airbnb platform allowed the discrimination to take place as contrasted to a traditional hotel booking platform where guest details are not known until booking and payment is made. They suggested concealing information on the Airbnb platform could reduce the incidence of discrimination. They also suggest the “instant book” option would also reduce the instance of discrimination.
While Airbnb and smaller hosts may not be held legally liable for the discrimination; it is still appalling and Airbnb and the host will suffer backlash and public pressure to do the “right thing”. After the study was released, the tweet and hashtag #AirbnbWhileBlack gained traction and included tweets showing actual discriminatory experiences. In May, a lawsuit was filed against Airbnb by Gregory Selden, a 25 yr old African American, who is seeking class action status for his discrimination lawsuit.
Vacation Rental by Owner (VRBO) only requires a name and a phone number prior to reserving a rental home. While this does not make VRBO immune from a potential lawsuit, the lack of additional information provides less data for hosts/owners to discriminate. VRBO has also put pressure on owners in recent months to allow the “book now” option.
While the sharing economy was supposed to reduce discrimination it appears too much information may have the opposite effect whether intentionally or unintentionally. How should the law intervene when the line between public accommodations or private accommodation is not clearly defined? As the Washington Post article states “our existing civil-rights laws simply need updating — either quickly, through legislative action, or incrementally, through court decisions”. While it seems we have come a long way from the 60’s; clearly we have not come far enough.
Xpert Home Services provides vacation hosting services to VRBO and Airbnb owners; guest check in, house cleaning, pool / Hot Tub cleaning and maintenance repair services. Provide your guests with the services they expect from the Xperts!