An AI landlord screening tool will stop scoring low-income tenants following a discrimination lawsuit

SafeRent, the AI ​​screening tool used by landlords, will no longer exploit AI-powered “scores” to assess whether someone using housing vouchers will make a good tenant. Wednesday, U.S. District Judge Angel Kelley gave final consent for a settlement of approximately $2.3 million to prevent SafeRent from discriminating against tenants based on income and race.

The the settlement stems from a class action lawsuit filed in 2022 in Massachusetts. The lawsuit alleged that SafeRent’s scoring system disproportionately harmed people using housing vouchers – particularly Black and Latino applicants. In addition to violating Massachusetts law, the complaint also accused SafeRent of violating the Fair Housing Act, which prohibits housing discrimination.

As outlined in the original lawsuit, the SafeRent scoring algorithm uses factors such as credit history and non-rental debt to assign a SafeRent score to potential tenants. Landlords can then exploit this result to determine whether to accept or reject someone’s rental application. The lawsuit alleged that the process lacks transparency because SafeRent does not tell landlords how it determined an individual’s score. The system allegedly unfairly assigned lower ratings to black and Latino tenants, as well as to people on housing vouchers, leading to landlords rejecting their applications for housing.

As part of the five-year agreement, SafeRent will no longer display tenant screening scores for housing voucher applicants nationwide, nor can it provide scores when landlords exploit SafeRent Score’s “affordable” model. SafeRent also does not display a recommendation to “accept” or “reject” a housing voucher recipient’s application. This means that landlords will now have to evaluate tenants using housing vouchers based on their entire history, not just their SafeRent score.

“Credit scores and scores that are similarly modeled, such as SafeRent Scores, are based on information that has been[en] tested to predict the repayment of loan obligations,” said Shennan Kavanagh, director of the National Consumer Law Center, in a statement. “There is no evidence that such data can predict whether tenants will pay their rent.”

The money raised in the settlement will go to Massachusetts-based rental applicants who used housing vouchers and were unable to secure housing due to their SafeRent tenant rating. “Although SafeRent still believes in SRS [SafeRent Solutions] While the results are in compliance with all applicable laws, litigation is time-consuming and costly,” SafeRent spokeswoman Yazmin Lopez said in a statement to Edge. “It has become increasingly clear that defending the SRS score in this case would take time and resources that SafeRent could better use to advance its core mission of providing housing providers with the tools they need to screen applicants.”

SafeRent is the latest algorithm-based property management software that is eligible for legal action. In August, the Department of Justice sued RealPage over claims that its algorithmic pricing software drives up rent.