Finding the right home in the right neighborhood is hard enough. But what if some listings never make it to you at all? A new study suggests that’s happening in Chicago.
Flash back to 1910. Two million people call the Windy City home. But where you live, and where you’re allowed to look, depends on who you are.
“There were explicit policies and practices…that were keeping people out of neighborhoods,” said Maria Krysan, LAS Distinguished Professor of Sociology, at the University of Illinois Chicago.
Also in 1910, Chicago adopted a new tool to sell homes: the Multiple Listings Service or MLS. The private system allowed real estate agents to share listings with one another. Census data from the same year showed just over 44,000 Chicago residents were Black at this time. According to the Encyclopedia of Chicago, most Black people were confined to a narrow chain of South Side neighborhoods.
More than a century later, the MLS still exists. And today, it’s facing renewed scrutiny over private listings, also known as pocket listings. The homes never hit the public market. Instead, listings are shared agent to agent, client to client.
Speaking of private listings, Krysan said, “Even regardless of the intent of the real estate agent who creates a pocket listing, it can have what we call a disparate impact — discrimination against potential buyers, especially Black and Latino homebuyers.”
Zillow analyzed one day’s worth of real estate listings in Chicago, which it said offered a snapshot of broader patterns. It found private listings are nearly twice as likely to appear in majority-white neighborhoods. Zillow senior economist Orphe Divounguy said the stakes go far beyond housing.
“The neighborhood you live in often determines what jobs you have access to, what schools your kids attend, and the opportunities available to them. We don’t want to return to a world where a handful of power brokers control who has access to listings and neighborhoods,” said Divounguy.
The regional MLS operator, Midwest Real Estate Data — or MRED — disputed Zillow’s findings. In a statement on its website, MRED said it “takes Fair Housing very seriously,” and has systems in place to monitor private and active listings for violations.
According to MRED, there are three times as many active listings in majority-white zip codes as in non-white zip codes. MRED said it launched its Private Listings Network in 2016 to keep listings within the MLS and prevent shadow networks that could lead to discrimination.
MRED didn’t respond to NBC Chicago’s interview request. The Illinois Association of Realtors declined to provide a comment for this story.
Illinois state lawmakers are weighing legislation that would require real estate agents to publicly list a home within one day of signing a brokerage agreement. The proposal includes an opt-out, which would allow for private listings but only after disclosures are made to the seller.
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