AuthorGold, Allyson E.

TABLE OF CONTENTS INTRODUCTION 1844 I. THE RACIAL WEALTH GAP 1849 A. Housing and Wealth Accumulation 1851 1. Redlining and Historic Housing Equity Discrimination 1852 2. Housing Discrimination and the Racial Wealth Gap 1856 B. Short-Term Rental Platforms and Wealth Accumulation 1858 II. UNDERSTANDING REDLIKING: CONSUMER DISCRIMINATION ON SHORT-TERM RENTAL PLATFORMS 1861 A. Facilitating Trust Online 1865 B. Economic Consequences of Guest Discrimination 1867 III. ANTIDISCRIMINATION LAW AND REDLIKING 1870 A. Platform Liability for Discrimination Against Short-Term Rental Guests 1873 B. Distinguishing Guests from Hosts 1880 C. Assessing Platform Operator Liability for Discrimination Against Hosts 1883 1. General-Function Test 1883 2. Fragmented-Function Test 1887 3. State-Level Protections 1890 IV. BEYOND THE TRADITIONAL ANTIDISCRIMINATION LAW APPROACH 1893 A. Behavioral Economics Approach 1894 B. Algorithm-Based Approach 1903 CONCLUSION 1909 INTRODUCTION

In 2016, the average White family's wealth was more than ten times that of the average Black family. (1) This racial wealth gap is explained in part by access to capital in the form of real property. As Professor William A. Darity Jr. stated, "[t]he origins of the racial wealth gap start with the failure to provide the formerly enslaved with the land grants of 40 acres." (2) Housing equity comprises nearly "two-thirds of all wealth" for median households. (3) For most families, "the racial wealth gap is primarily a housing wealth gap." (4) American housing policy has created and perpetuated the housing wealth gap. Federal and local policies prevented Black families and other minorities from accessing housing wealth through a host of practices working in concert, such as zoning, restrictive covenants, discriminatory lending practices, and the creation of color-coded maps that classified neighborhoods based on their perceived risk, with green signifying the most desirable and red representing the least desirable areas. (5) "[A]reas with even a small black population were generally given [the] lowest rating." (6) Based on these maps, the term redlining became shorthand for "deeming certain neighborhoods as 'hazardous' and denying mortgages there as a matter of policy, regardless of the applicant's means." (7) Redlining baked racism into the housing market, affecting the actions of individual actors. The private market simultaneously reinforced these systemic barriers, directing wealth to White neighborhoods and withholding it from Black communities. (8)

Today, short-term rental platforms replicate historic redlining practices by allowing discrimination to permeate online transactions. Airbnb, the largest short-term rental provider in the world, allows individual hosts to market available space--a spare room, guest suite, or whole home--to prospective short-term guests. (9) Airbnb uses photos of the space, as well as demographic information about the host and guest, to facilitate the transaction on its platform. (10) Airbnb's algorithm suggests potential accommodations based on a number of factors, such as previous guest engagement with the listing. (11) Based on these recommendations, guests can decide to book immediately or click an icon to "like" the listing and save it for later consideration. (12) Algorithms can uncover latent bias, which results in a "supposedly neutral system" that, in actuality, operationalizes discrimination. (13) Together, the user information included on the platform combined with the algorithms that determine what listings are displayed creates a system wherein more economic opportunities are directed to White hosts.

The use of redlining maps in the early twentieth century prohibited minorities from accumulating wealth and financial security through homeownership by denying loans to Black neighborhoods as well as excluding minority homeowners from purchasing in White neighborhoods. (14) Today, Airbnb's structure, design, and algorithm create a website architecture that allows user discrimination to prevent minorities from realizing the same economic benefits from short-term rental hosting, a phenomenon that this Article refers to as redliking.

Airbnb has well-documented discrimination issues against guests on its platform. Researchers found that "applications from guests with distinctively African American names are 16 percent less likely to be accepted relative to identical guests with distinctively white names." (10) The results were constant even when controlling for other factors, including sex of the host, whether the property was shared or unhosted, experience level of the host, diversity of the neighborhood, and price of the listing. (16) In recognition of this discrimination, Airbnb changed its booking policy in October 2018 to no longer allow hosts the opportunity to access guest photos before accepting a request for accommodation. (17)

While Airbnb made some changes to its booking practices to limit the ability of hosts to discriminate against guests, discrimination by guests against hosts remains an issue. Discrimination against hosts of color affects rates of booking and average asking rents on short-term rental platforms. (18) As documented in a Harvard Business School study, non-Black hosts in New York City are able to charge 12 percent more than Black hosts, even when controlling for location, accommodation characteristics, and quality. (19) On average, Black hosts received $107 per night for every $144 per night received by non-Black hosts. (20) Research on host earning rates in Oakland and Berkeley, California, likewise found discrimination against minority hosts, with Asian hosts earning 20 percent less than White hosts. (21)

Discrimination against hosts has financial consequences. Short-term rental platforms, such as Airbnb, provide hosts with the opportunity to increase their income and wealth. (22) This is accomplished through two channels. First, a host creates a new income stream by listing a property on a short-term rental site. (23) Second, creating a new source of income increases the value of the underlying real estate. (24) Home-sharing on short-term rental platforms can be transformative for individual hosts. By creating an additional revenue source, home-sharing allows an individual to realize immediate financial gains while simultaneously increasing the equity of the core asset. (25) Airbnb's annual sales surpassed those of nearly all hotels in 2018, including legacy companies such as Hilton, IHG, and Hyatt. (26) As Airbnb continues to grow, so too will the financial benefits of hosting on the platform. However, without intervention, redliking will perpetuate historic inequity related to housing, thereby contributing to and exacerbating the racial wealth gap.

This Article examines legal recourse for minority hosts that experience bias on short-term rental platforms. Other scholars have studied the legal implications of discrimination against short-term rental guests. (27) Likewise, others have evaluated tort (28) and consumer law (29) interventions to address the ways in which websites manipulate information about individual users. However, none have analyzed how the design of short-term rental platforms allows for discrimination against minority hosts, perpetuates the racial wealth gap, and parallels historic housing equity discrimination. This Article fills that gap.

In developing these points, this Article proceeds in four parts. Part I defines the racial wealth gap and discusses the role of housing discrimination in creating and exacerbating wealth inequality. It situates contemporary discrimination on short-term rental platforms as a continuation of historic housing inequality, focusing on early twentieth-century redlining practices. Part II defines redliking--the infrastructure that permits discrimination against minority hosts on short-term rental platforms--and how this contemporary discrimination and its relationship to real property parallel historic redlining practices. This Part describes the importance of facilitating trust in online transactions and how this creates opportunities for bias to infiltrate transactions. In doing so, it examines the attendant financial consequences. Part III assesses the ability of antidiscrimination law originally enacted to abolish racist policies like redlining to combat contemporary redliking. This Part begins by analyzing the applicability of the Fair Housing Act and Civil Rights Act to guests who experience discrimination on short-term rental platforms. It then distinguishes the services Airbnb provides to guests from those it provides to hosts. In light of the platform's dual role, this Part proposes two approaches--a general-function test and a fragmented-function test--to determine platform operator liability for discrimination against minority short-term rental hosts under the Civil Rights Act. This Part also discusses remedies under state law. Recognizing the limitations of the existing antidiscrimination legal framework, Part IV proposes incorporating lessons from behavioral economics on choice architecture as well as reform of the algorithms powering short-term rental platforms to prevent face-neutral variables from serving as proxies for discrimination against minority hosts.


    The racial wealth gap refers to the "difference in wealth holdings between the median household among populations grouped by race or ethnicity." (30) According to the Survey of Income and Program Participation (SIPP), Black households have less than seven cents of wealth for every dollar held by White households. (31) White households living near the poverty line typically have $18,000 in wealth; however, similarly situated Black households typically have zero wealth. (32)

    These differences persist at the other end of the financial spectrum. At the 99th percentile, the average Black family has wealth of $1,575,000; the average White family...

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