“Totally not redlining!”
See that Madonana-like shape running West from the I-17 Freeway. Looks like a pregnant single-mom, doesn’t it? The poster-child of fair-housing law, right there on the map.
Looks like redlining, doesn’t it?
I’ve been watching Zillow’s iBuying results for years now. It always looks like redlining. I warned them about it when I was working as a pricing algorithm.
Is it really redlining? It’s the further fruits of a buy-box that wisely avoids old, small and irregular housing. For all of me, Zillow’s buy-box is much too loose, but the net consequence is that much of the housing Zillow excludes is in contiguous neighborhoods emerging West from the I-17.
Is it really redlining? The neighborhoods Zillow and the other iBuyers exclude in Metropolitan Phoenix are far browner, blacker and redder than the neighborhoods they include. That’s redlining de facto, by disproportionate impact.
Is it possible for investors to work from a buy-box that does not redline in disproportionate impact terms? I don’t see how. The buy-box my investors work from is much more stringent, to the point that we only work in a few subdivisions, by now.
Is it possible for licensed real estate brokers to work as investors without committing hundreds of de facto materially-damaging fair-housing violations by means of redlining? I don’t see how.
That’s why investors should not be licensed, for one thing, but I think it illuminates how poorly thought-out are all the “black lives matterers” among the iBuyers.
Have fun when the lawsuits start – particularly since you’ve all already declared what racists you are.
Brian Brady says:
“Is it possible for licensed real estate brokers to work as investors without committing hundreds of de facto materially-damaging fair-housing violations by means of redlining? I don’t see how.
That’s why investors should not be licensed, for one thing, but I think it illuminates how poorly thought-out are all the “black lives matterers” among the iBuyers.”
Wouldn’t a solution be for hire a broker (other than the employing broker) to represent him/her? I know it doesn’t completely remove the “greater knowledge” accusation but I would be completely comfortable playing by your rules if I were buying property in Phoenix
September 22, 2020 — 11:23 am
Greg Swann says:
I don’t even know if I have a problem. We advise investors not to buy houses that face East/West, for goodness sakes. The investors are shielded by me, and my recommended buy-box is clearly defended geographically, economically and by the properties themselves: We buy North/South stucco and tile in the Southwest suburbs of Phoenix. Single-story only (the future has bad knees), no pools, no golf-course lots, no lot-externalities generally. We buy-and-hold for resale, and those plus-factors help to recruit better tenants, in any case.
Making distinctions: One-off investors; wholesalers; retailers.
Me and my guys are hard to convict: We can’t buy everything, and we work with every qualified party we meet to optimize everyone’s results.
Wholesalers who are also brokers are at risk, I expect, especially if they promote heavily. “Why is this opportunity denied to so many people in protected categories?”
Retailers – iBuyers – are screwed as soon as an attorney figures out how to read that map. They might be screwed even if they give up the brokers’ licenses, since they have so many asymmetrical advantages.
September 22, 2020 — 11:45 am