The coronavirus pandemic has changed so much in the housing market around the world. Plenty of column inches have been dedicated to the sea change in the world of office and commercial real estate and the clamour to digitalise both the clunky transactions of our industry and the work of the professionals who depend on them. The events of the last year or so have also thrown into stark relief an issue that blights almost all housing markets around the world - that of fair housing.
While the property marketing industry may be experiencing boom times with record traffic being logged and record lead volumes being touted to portal customers around the world, the rush to buy and sell that our industry is benefitting from is creating a tumult that in some cases is making it even more difficult for the least privileged to find adequate housing.
Redfin boss Glenn Kelman's recent Twitter thread shone a light on several crazy examples of how the pandemic has affected the US housing market his company operates and included several points that property portal companies there might want to pay attention to. A couple of the issues raised in Kelman's tweets, in particular, may well be overlooked despite arguably being the most important:
14 of 15: it’s not just income that’s k-shaped, but mobility. 90% of people earning $100,000+ per year expect to be able to work virtually, compared to 10% of those earning $40,000 or less per year. The folks who need low-cost housing the most have the least flexibility to move.
— Glenn Kelman (@glennkelman) May 25, 2021
Fair housing and the responsibility for it may not be near the top of the list of priorities for property portals around the world but might just be something that will start to edge up those lists in years to come and not just because of the PR window-dressing opportunities.
As the issue becomes more pertinent, governments around the world are going to want to be seen to be doing something about it and property portal companies will start to look like easy targets. There have already been cases of portal companies taking financial hits levied at them by local governments keen for the public to see them taking a stance.
This time last year, idealista was fined by Barcelona city council for the publication of an allegedly discriminatory listing and a few weeks ago US rental portal Zumper was fined in New York over discrimination claims. While the €90,000 and $40,000 fines in these cases are inconvenient for these companies, the negative PR that attaches itself to their brands is far more damaging.
Zumper and idealista may well argue, with some justification, that these are isolated incidents that are not representative of them as companies or of the markets they operate in. However, there are some housing markets where discrimination is undeniably prevalent and where property portals not only have to be careful but have to be active in rooting it out.
With his lease due to expire soon and his wife heavily pregnant with their first child, long term Singapore resident and Business Development Manager Ankit Maheshwari was filling in a lot of enquiry forms on local property portals earlier this year. As Ankit told us though, eight times out of ten he and his wife did not get past the first screening with agents regularly either citing "landlord preferences" or half baked excuses.
Things didn't get any less insulting for the couple once they had found a home they were keen on renting. After weeks of back and forth between the agent and the landlord, several very personal questions put Ankit's way and even an improved offer well above the asking price there was the indignity of the listing agent turning up on the couple's doorstep with a video camera to film the inside of their home at the behest of their new potential landlord.
As Ankit was keen to point out, the couple are far from the only people to have suffered from housing discrimination in Singapore, but the situation seems to be getting worse:
"Before it was brushed under the carpet, but now with the pandemic people think they can get away with it."
While Singapore's leading portal PropertyGuru gave a statement to a Vice journalist recently condemning all forms of discrimination and reiterating its terms of service, regional rival 99.co has gone one step further and introduced a field for listings whereby users can use a filter to find 'diversity friendly' listings on the portal. When asked about the filter, 99.co CEO Darius Cheung told us:
"Creating a filter for 'Diversity Friendly' listings not only gives home seekers a way to spare themselves from the nasty experience of confronting racism, which unfortunately cannot completely be changed overnight; it also creates a strong economical reason for landlords to change their views so as not to lose out on potential renters, as well as agents to actively advise their landlords to be inclusive."
Issues around fair housing are not limited to emerging markets. The issue around landlords not wishing to rent to claimants of 'DSS' government housing benefits in the UK has been an ongoing saga for property portals for many years. Until 2019, both Zoopla and Rightmove allowed rental listings to specify that a landlord would not accept tenants who received DSS payments and several buy-to-let lenders even had clauses in their mortgages that landlords could not accept tenants receiving benefits.
The situation meant that over 4 million renters receiving housing benefits had such a poor experience looking for a place to live on the main portals that aggregators and specialist portals with a 'DSS accepted' filter and landing pages were able to take traffic away from the big portals and carve out a niche in the market. One such platform to benefit was MovingSoon, a specialist affordable housing portal set up by Paul Malone in 2013 with the mission: "Everyone should have a home".
The situation has improved recently thanks in part to landmark court cases and, after initially leaving a loophole, Rightmove followed Zoopla by banning 'No DSS' listings. As Paul points out though, UK portals still "could do better in terms of filtering" and there is still a traffic imbalance where a lot of those users looking for affordable housing and agents with suitable stock are not making full use of platforms such as MovingSoon which actually "explain what these properties are and how affordable they are".
One thing is outright discriminatory language in a listing, another more pervasive and subtle threat to fair housing is listing exclusivity which is, by its very nature, bad for fair housing. Listing exclusivity as a concept is big in the world of real estate agency and especially in markets such as the United States where buyer and seller agents from the same brokerage can effectively 'double-end' deals. Keeping their listings from the portals is seen by some as a path to profitability for brokerages and perhaps their only effective weapon against the hegemony of property portals in the country.
The idea of exclusivity is also big in Australia where 'off-market' property market Listing Loop has made such an impact that the concept behind it was even the subject of a derisive REA Group TV advertising campaign late last year. The concept is starting to creep into the British property market as well with #3 portal OnTheMarket increasingly encouraging agents to list their inventory on the portal before Rightmove and Zoopla.
While these examples, when looked at on an individual basis, are excusable and understandable decisions being taken by businesses trying to carve out a profit under the shadow of leading brand portals, the direction that the industry is heading in where more housing is potentially being seen by fewer, privileged 'in the know' consumers may become worrying for champions of fair housing.
There is a potentially more worrying trend growing in markets with iBuyers though whereby none of the house-hunting public even get to see some available properties before they are snapped up and turned into profitable rental stock. Institutional landlords buying houses on the cheap is nothing new, but using iBuyers as their source of stock is a relatively new phenomenon and one that, according to Bloomberg, accounted for 21% of all the homes sold by Opendoor and 9% of those sold by Zillow in the last quarter.
Obviously having investors taking advantage of their economy-of-scale to snap up affordable housing is not ideal for first-time buyers and is a situation that seems very much opposed to the values that Zillow, in particular, is keen to extol in itself as an organisation - just a few weeks ago the company sent out a press release touting its latest research into racial housing inequality.
Property portal executives reading this may well be thinking ‘well we have a robust set of terms that prevents any of this from happening’, and they may well be right at least to the extent that their firms would not be liable for damages in court.
In the court of public opinion, however, statements from any company that is not both rooting out discriminatory listings and actively promoting fair housing are increasingly going to sound as hollow as those from the portals featured in this BBC piece from December 2020.
If writing some strong Ts & Cs is easy, actively rooting out bad apples from among listings is not much more difficult. Any portal company worth its salt either has AI and NLP experts among its ranks or can pick up the phone to companies such as Utopia Analytics or Co-Libry that specialise in these things.
While AI moderation might be improving all the time and now fairly ubiquitous throughout the industry, as South African market leader Property24 pointed out to us, ideally it goes hand in hand with a dedicated moderation team.
"While we have always used technology on our platform to assist our Moderation Team in working with problematic listings, we have never seen it as a replacement to their efforts"
So taking measures to ensure no discriminatory content makes it onto portal listings and then throwing the 'strong Ts & Cs' at anyone who posts a listing that slips through the net is the bare minimum here. Yet there is another step that property portal companies can and should take. It's the step that goes above and beyond the avoidance of discrimination and actively encourages fair housing. To use Property24 again as an example, a quote they gave us is typical of the prevailing sentiment in the industry around this question which ticks all the right boxes but also highlights an opportunity being missed:
"Because companies like Property24 operate as listing portals – a platform that connects buyer and seller - we have no governance over fair housing policies in South Africa. We do however recognise, through the continued efforts of our Moderation Team, that we can make a difference for everyone who uses our platform."
It shouldn't just be "through the Moderation Team" and the removal and punishment of discriminatory content that property portals can "make a difference for everyone". There is an opportunity to do the right thing both morally, for PR and, potentially, for business as well.
MovingSoon filled a gap in the market left by leading property portals that didn't seem interested in the affordable housing segment. If they have made a business out of engaging with and educating those in need of affordable housing as well as agents and housing associations, surely others can as well.
There has never been a greater demand for affordable housing or a greater opportunity for a big brand housing marketplace to build a hub for affordable and accessible housing with the right stock, the right filters, the right SEO positioning and supported by the right educational material and the right marketing. Given the importance of brand in the property portal market let alone any profit or corporate responsibility considerations, the motivation must be there.
Ultimately, the issue boils down to whether portals are just mirrors, businesses that are just showcases for content given to them by agents who are in the service of potentially prejudiced customers, or if they can be arbiters in the struggle for fair housing that can use their technology and their positions as (in some cases) omnipotent housing marketplaces to make a small change. The answer in 2021 should really be obvious.