SafeRent, a landlord screening tool, will no longer use artificial intelligence-based “scores” to assess whether someone using housing vouchers would be a good tenant. On Wednesday, U.S. District Judge Angel Kelly gave final approval to a settlement worth about $2.3 million to prevent SafeRent from discriminating against tenants based on income and race.
The settlement stems from a class action lawsuit filed in 2022 in Massachusetts. The lawsuit alleged that SafeRent’s scoring system disproportionately harms people who use housing vouchers, particularly black and Hispanic applicants. In addition to violating Massachusetts law, the suit also accused SafeRent of violating the Fair Housing Act, which prohibits housing discrimination.
As stated in the original lawsuit, SafeRent’s scoring algorithm uses factors such as credit history and non-rental debts to assign potential tenants a SafeRent Score. Landlords can use this score to determine whether to accept or reject someone’s rental application. The lawsuit claimed that the process is not transparent because SafeRent does not tell landlords how it scores tenants. And the system allegedly unfairly assigned lower scores to black and Hispanic tenants, as well as people using housing vouchers, forcing landlords to refuse to rent to them.
Under the five-year agreement, SafeRent will no longer issue screening scores for tenants using housing vouchers nationwide, and cannot issue scores when landlords use the “affordable” SafeRent Score model. The SafeRent service is also unable to display recommendations on whether to “accept” or “reject” someone’s application if they are using housing vouchers. This means that landlords will now have to assess tenants using housing vouchers based on their entire dossier, not just their SafeRent score.
“Credit scores and similarly modeled ratings, such as SafeRent Scores, rely on information that has only been tested to predict repayment of credit obligations,” said Shannan Kavanagh, director of the National Consumer Law Center, in a statement. “There is no evidence that such data can predict tenant payment of rent.”
The money collected as part of the settlement will go to Massachusetts rental applicants who used housing vouchers and were unable to obtain housing because of SafeRent’s tenant scores. “While SafeRent continues to believe that SRS [SafeRent Solutions] assessments comply with all applicable laws, litigation is time-consuming and expensive,” SafeRent spokeswoman Yazmin Lopez told The Verge. “It was becoming increasingly clear that defending SRS Score in this case would divert time and resources that SafeRent could better use to fulfill its core mission of providing housing providers with the tools they need to screen applicants.”
SafeRent is the latest algorithmic property management software to face a lawsuit. In August, the Department of Justice sued RealPage over allegations that its algorithmic pricing software increases rents.
