Open Communities, an Evanston-based housing advocacy nonprofit, settled its Fair Housing Act litigation against Chicagoland housing providers for using artificial intelligence to reject rental applicants participating in the housing choice vouchers program, according to a Wednesday news release.
After the organization launched an investigation in February 2023 against 99 properties, the nonprofit filed a complaint in the District Court of Northern Illinois seeking damages against multiple management companies using artificial intelligence by PERQ Software to discriminate against potential tenants based on their source of income.
According to the settlement, the defendants have agreed not to deny rental applicants based solely on source of income and will be monitored by Open Communities for two years. They will provide written reports on their standards and include a short-listing process. Open Communities will also provide fair housing training to the companies’ employees nationwide.
The monetary terms of the settlement currently remain confidential, according to the release.
The investigation started after plaintiff Elizabeth Richardson — who used a housing choice voucher, a Section 8 subsidy for lower-income households — alleged that Harbor Group Management Co. intentionally used the AI system to reject her application and similar online applicants with a voucher.
Open Communities found PERQ AI issued a blanket “no Housing Choice Voucher/No Section 8 Policy” for renters who initially used the Trulia housing portal for HGM — including Richardson, who felt “discouraged” and “devalued,” according to the complaint.
The hardest part of the investigation included convincing others of the disparate racial implication of the complaint due to the long history of segregation in the U.S., according to Dominic Voz, the director of fair housing at Open Communities in an interview with The Daily.
Currently, 85% of HCV recipients in Chicagoland are Black. At Northgate Crossing Apartments in Wheeling, Ill. — where Richardson, who is Black, was trying to rent — Black Americans overwhelmingly represent the renters receiving HCVs, which constitutes racial discrimination in violation of the Fair Housing Act of 1968, according to the complaint.
“Making people understand why certain policies or practices can be considered race discrimination even if on its face it looks neutral — I think that’s an important communication thing,” Voz said. “This is not just the opinion of fair housing centers. It’s been upheld in the law.”
Correction: A previous version of the story misstated source of income as income level. Source of income is protected from discrimination by state law, while income level is not. The Daily regrets the error.
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Twitter: @shreyasrin
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