After a fire devastated her apartment in February 2022, Earnestine Leckeyccia Lawson needed a new home. She paid $75 to apply for a rental from Jacksonville Wealth Builders. But to her shock, she got rejected based on a past eviction filing.

The problem: she hadn’t ever faced an eviction filing. Despite her innocence, JWB stuck to its rejection. It kept her $75, too.

Lawson, like a rising number of renters in the U.S., was trapped at the intersection of technology and housing, where glitchy tenant-credit algorithms and rigid landlord rules lead to people getting wrongfully denied homes.

In a federal lawsuit filed in March, Lawson and three other Jacksonville residents make the novel legal argument that these algorithms have fueled civil rights violations, slanting the market against Black renters.

The plaintiffs, represented by Jacksonville Area Legal Aid, sued JWB Property Management LLC, one of Northeast Florida’s largest landlords, and JWB Real Estate Capital LLC, which sells hundreds of ready-to-rent units in urban neighborhoods per year.

“We vehemently deny any allegations of discrimination,” JWB cofounder and president Alex Sifakis said in a text to The Tributary, declining to comment further due to the class-action lawsuit’s ongoing status. In court, JWB denied everything the plaintiffs claimed.

Technology meets alleged housing discrimination

Court battles keep mounting nationwide over tenant-screening services, a growing industry of background-checking software.

Most center on violations of the Fair Credit Reporting Act, where individuals may be denied housing due to mistaken identity or outdated information. Many of those lawsuits are against SafeRent, a tenant-screening company also used by JWB. The Tributary found at least 34 federal lawsuits filed against SafeRent and its tenant-screening affiliates in the last decade, dwarfing 10 such suits located from the prior decade.

The Jacksonville lawsuit is unique in that it targets a landlord, not a tenant-screening contractor, with a case grounded in the Fair Housing Act – arguing these new technologies are being used to perpetuate age-old discrimination based on eviction histories.

This argument centers on an alleged rental application disqualifier in JWB’s screening process. If SafeRent claims potential renters have had an eviction filing, JWB won’t rent to them, regardless of the filing’s legitimacy.

“Landlords file stuff for a variety of reasons,” Adam Thoresen, one of the JALA attorneys leading the lawsuit, told The Tributary. Just because someone has “a court docket, it doesn’t mean the tenant was actually late with rent. It doesn’t mean the tenant violated any rules. And so, we believe that any blanket policy that disqualifies an applicant just because of the existence of an eviction filing is just inherently discriminatory.”

The reason this creates a specifically racial impact is two-fold, the lawsuit argues: Black renters have faced a disproportionate load of eviction filings from the local to the national level for decades, and JWB’s properties are concentrated “almost exclusively” in slivers of Duval County where the Black population exceeds that of the county as a whole.

SafeRent offers many forms of personal data on prospective tenants to clients like JWB, including “access to our exclusive database of landlord-tenant records” from courthouses across the country, its website advertises. This apparently includes records of eviction filings that have later been invalidated by a judge and ordered sealed from public view.

Lawson’s experience represents a case of outright false data held against a person because a tenant-screening algorithm plucked the wrong person’s court record.

The experiences of her fellow named plaintiffs are a bit different. One is Ericka Byrd, 54, whose former landlord mistakenly filed for eviction against her in early 2021, realized this mistake two days later and voluntarily dismissed the filing. The court then sealed that filing from public view.

When Byrd applied for a rental from JWB last year, she provided a letter from her former landlord’s lawyer that explained the mistaken eviction filing and its dismissal. After an algorithm scan, “SafeRent recommended that JWB accept her as a tenant with conditions,” and JWB denied her anyway based on the dismissed filing, according to the lawsuit.

The other two named plaintiffs – 28-year-old Kemone Brooks and 30-year-old Quantez Moore – beat a former landlord’s attempted eviction in court last year. A judge sealed the case from public view in July 2022. Three weeks later, JWB rejected their application for a new place based on that dismissed filing and didn’t waver when they provided court records of the case’s dismissal.

The racial geography of renting

Then there’s the issue of where JWB serves renters within Jacksonville.

The lawsuit describes an analysis of property records and U.S. Census data, which found that more than 80% of JWB-owned or -managed rental properties sat in pockets of Duval County where the percentage of Black residents exceeds that of the county’s total Black population. About half of those properties are in communities of more than 50% Black residents, far above the countywide split of 31%.

Lawson and her co-plaintiffs are suing on behalf of all Black rental applicants whom JWB rejected in Duval County over a two-year period based on an eviction filing that doesn’t represent an actual eviction on their record. They want repayment of the fees JWB has kept from those applicants, $75 per single-adult and $150 per multi-adult household until earlier this year when JWB bumped those tolls to $80 and $160.

In its legal response, JWB demanded the plaintiffs prove that it has rejected applicants based on past eviction filings, that it enforces a blanket no-eviction-filings policy, that its practices have a racially disparate impact, and that it should be aware an eviction filing alone doesn’t indicate tenant worthiness.

The regional real-estate giant wants the plaintiffs to pay its legal fees.

JWB argued its “leasing policies do not robustly cause racial imbalance, if any such imbalance exists.” It also argued there’s no better alternative to its current tenant-screening practices, and that it hasn’t hurt Black renters.

What comes next?

The plaintiffs and JWB have been in court-ordered settlement talks since May. If they don’t strike a deal by next May, they could proceed to a trial under U.S. District Judge Brian J. Davis.

The Jacksonville lawsuit makes an untested, potentially groundbreaking argument in U.S. law. 

Similar legal actions soon followed elsewhere.

In late July, Chicago-area advocates filed a federal lawsuit and a civil rights complaint that made virtually identical arguments against institutional landlords in Cook County. They’re backed by the American Civil Liberties Union’s Women’s Rights Project, the National Housing Law Project and global law firm Mayer Brown.

Both the Chicago and Jacksonville lawyers say Black women are most harmed by eviction-based denials. A 2020 study by Eviction Lab found that Black renters in the U.S. faced by far the highest eviction-filing rates for both men and women and that Black women faced 36% more evictions per year than Black men.

Legal Aid Chicago housing director Dennericka Brown, part of the ACLU-backed lawsuit, says one of COVID-19’s “long-lasting impacts” is a surge of eviction filings beyond pre-2020 norms after a federal moratorium ended two years ago – a detriment to those already less prepared for economic upheaval before the virus.

“There were people that had families they could move in with, they had a paycheck that they could rely on, they had retirement benefits, and then there were the have-nots,” Brown told The Tributary. “Housing prices have gone up. Rents have gone up. People just cannot afford it, and that’s a result of the market that was created during COVID.”

David Chami, the Arizona-based managing partner of Consumer Attorneys PLLC, has led or supervised nearly 500 credit-reporting lawsuits across the U.S., including ones focused on tenant-screening failures.

His cases haven’t expanded to a focus on racial discrimination, but without being prompted, he brought this up as its own problem in the algorithms themselves.

“It usually unfairly targets, or disparately affects people of color,” Chami told The Tributary, “because they tend to be communities that are policed more vigorously.” He sees the tenant-screening industry as increasingly rife with problems because as mass data and software tools become cheaper every day, the pressure to put profit over quality intensifies.

“Instead of seeking maximum possible accuracy, these consumer reporting agencies are seeking maximum possible information that they can put into these reports,” Chami said. “They rely and hope that most consumers aren’t gonna know to call a lawyer.”

This story was published in partnership with The Tributary.