Homes in majority-white areas of Chicago are more than twice as likely to appear on that market’s Private Listing Network, according to Zillow, a reality that the company says reinforces segregation in the region.
Nearly 8 percent of homes for sale in majority-white neighborhoods in Chicagoland were listed privately on Oct. 21, Zillow said in its report released on Thursday. In majority-nonwhite areas, 3.4 percent of homes were listed privately.
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The report comes as Zillow attempts to begin enforcing its private listing ban in the nation’s third-largest market, and other markets where the ban isn’t yet being enforced.
“The findings highlight how private listing systems can unintentionally reinforce racial segregation and restrict access to housing opportunities,” Zillow wrote in its report. “As some brokerages expand private listings nationwide, similar systems could amplify inequities in other markets.”
Chicago is the fifth most segregated city in the nation along racial and economic lines, according to the Metropolitan Planning Council, citing data from 2010.
Zillow’s report reinforces its stated reasoning for implementing its policy that bans real estate listings from its platform if they are first marketed on a private listing network for more than a day without being put on a local multiple listing service and on Zillow.
“Fifty-seven years after the Fair Housing Act promised an end to housing segregation, we are still waiting for that promise to be fulfilled,” Michael Chavarria, executive director of the anti-discrimination HOPE Fair Housing Center, said in the report. “Zillow’s decision to confront the data and its calls for the real estate community to open listings to all consumers is an example the industry must follow. Homebuyers deserve the right to see all the homes available in an area — not to have those choices quietly made for them.”
The portal has said that the policy ensures the broadest possible access to homes for sale and minimizes the potential for discrimination.
Zillow is participating in a hearing this week with Compass, which sued the portal over its ban on publicly marketed private listings in June. Compass is the largest brokerage in Chicago after acquiring @properties this year.
MRED’s defense of the PLN
MRED rolled out its widely used private listing network nearly 10 years ago.
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A 2021 MRED survey of over 6,000 agents found that 60 percent of agents used the private listing network to begin marketing a property before entering it on the public MLS, according to Chicago Agent magazine. Two-thirds of MRED brokers who use private listings use them again, according to MRED data.
MRED hasn’t responded to requests for comment about the ensuing conflict with Zillow that began percolating earlier this month, including a request on Thursday.
But in messages to managing brokers obtained by Inman, MRED’s leadership has defended the private listing network and suggested that Zillow was at risk of violating MRED’s rules.
“MRED has made it clear to Zillow that selectively excluding certain listings may violate MRED’s rules,” MRED’s email to its brokers said, “as well as the terms of Zillow’s license agreement with MRED, which requires Zillow to access and display all licensed listings without bias or restriction.”
In a second email, MRED CEO Rebecca Jensen said that listings that start in the PLN sell faster and for more money, and she defended the PLN as a tool that is popular among brokers and consumers.
“This allows MRED to be an impartial arbiter, a referee carefully and compassionately watching over the arena in which we’re all playing together,” she wrote. “We fully understand buyers and sellers both have desires throughout the process, and our PLN is a way to accommodate the needs of all.”
Zillow’s research has shown that homes sell for less when marketed privately compared to publicly marketed homes.
