In response to new legislation limiting certain real estate marketing practices in Washington state, NWMLS hosted a panel to discuss the law and its intent.
Key points:
- MLS, association and fair housing leaders discussed SB 2091, a new private listings-related law in Washington state, aiming to clarify its origin and purpose.
- NWMLS CEO Justin Haag — a vocal critic of exclusive marketing — said the debate is really about “whether housing opportunities belong to everyone or just the select few.”
- Fair Housing Center of Washington’s executive director framed PLNs as a “modern-day form of redlining” and suggested ways for brokers to combat inadvertent discrimination.
Last week, a new law went into effect in the state of Washington which prohibits “marketing residential properties to an exclusive group of prospective buyers or real estate brokers, unless the residential property is also concurrently marketed to the general public and other real estate brokers.”
The law’s language, which Washington Realtors President Ryan Beckett described as “purposefully vague,” has raised some questions among real estate professionals in the state. In an effort to clarify the law and its intent, Northwest Multiple Listing Service (NWMLS) hosted a panel on June 11 to discuss the legislation and fair housing concerns as brokers navigate a marketplace with a growing number of listing options.
Selective marketing isn’t ‘competition,’ it’s ‘gatekeeping’
NWMLS CEO Justin Haag introduced the panel, which included participants from the Fair Housing Center of Washington, Washington Realtors and Able Environments, by discussing the enactment of SB 6091 and how some view the private listings issue as a debate about marketing strategies or business models. “I think it’s a debate about whether housing opportunities belong to everyone or just the select few,” the CEO said.
“Exclusive access” through marketing tools like private listing networks is not “competition — that is gatekeeping,” Haag added, reiterating the position he expressed last year shortly before Compass sued NWMLS over pre-marketing restrictions.
Haag characterized the new bill as promoting competition, fairness and equal access to housing by ensuring that when a home is marketed for sale or rent, it is accessible to everyone. He added that NWMLS members who are in compliance with the MLS’s rules are also already compliant with the new law.
When the law took effect last week, a spokesperson for Compass said they support the spirit of the legislation and believe their brokerage’s Private Exclusives and Coming Soon listings are also “fully compliant” with the law.
How the bill came about, and what it means for brokers
Bill Clarke, director of public policy and legal counsel for Washington Realtors, which first drafted the bill for the legislature, said the overwhelming bipartisan support for the bill was in part a response to other recent legislation designed to generate more housing in the state.
“The legislature has passed all these bills to try to make housing more available and then you say, well, what is the real estate industry’s role?” Clarke said. “They’re not going to increase housing supply, so then the real estate industry can go and conceal all the listings, right? That would be exactly opposite of what they’re trying to achieve.”
SB 6091 is not an outright ban on private listings, Clarke noted: “It allows private marketing to occur — once that occurs, at the same time, you have to engage in public marketing. And that’s it.”
He also explained that the bill is “fairly general” because lawmakers recognize they’re not real estate experts.
“The standard of conduct is, if you’re going to privately market it, it’s got to be publicly available too,” Clarke said. “How you choose to do that, that’s still your guys’ expertise and your guys’ business.”
PLNs as a ‘modern-day form of redlining’
Panelist Adria Buchanan, the executive director for the Fair Housing Center of Washington, focused on the potentially disparate impacts of private marketing on different groups. “Classic redlining,” she said, was a government and private industry-sanctioned practice where consumers didn’t have access because of lines being drawn around them.
But with the use of private listings today, “they’re not having access because they don’t know about that opportunity in the first place,” Buchanan argued.
Private listings not only impact a consumer’s access to available inventory, she said, but could also affect appraisals if a lender doesn’t have visibility into all sales and sale prices either.
And even if selective marketing isn’t discriminatory on its face, it can still have unintended negative consequences, Buchanan said.
Agents, she noted, may just be trying to give their sellers more options, but “we’ve observed that [exclusive listings] have a discriminatory impact, especially if that marketing channel — whatever it is — has some demographic restrictions on it.”
When marketing a property, Buchanan suggested that agents ask themselves and their vendors who has access, who is being left out and what language is being used — questions that can help agents avoid inadvertent discrimination, she said.