Instant buyers, also , rapidly buy and sell homes using automated models to set prices. These companies, such as Opendoor and Offerpad, can turn around cash offers in a matter of hours, and they’ve captured more than 5% of the real estate market in some U.S. cities.

Since new tech often replicates or exacerbates existing societal biases, 91̽�� researchers wanted to investigate how iBuyers have affected the well-documented — particularly .

The team homed in on Charlotte, North Carolina, where an estimated 35% of the population is Black, and where in 2021 iBuyers held more than 8% market share. Based on an analysis of five years of property transactions in Mecklenburg County (which contains Charlotte), researchers found that on average, compared to individual buyers, iBuyers paid more equal prices to Black and white home sellers. That’s largely because iBuyers paid white sellers significantly less on average than an individual buyer would.

The team also discovered that iBuyers were then significantly less likely to sell homes to individual buyers. Instead, these companies were more likely to sell homes to institutions, such as large rental companies that’ve been tied to high eviction rates and rent gouging.

The team in June at the ACM Conference on Fairness, Accountability, and Transparency, held in Rio de Janeiro.

“It’s easy for bias to seep into automated models if they’re trained on data that is itself biased,” said lead author , a 91̽��doctoral student in the Information School. “The models that iBuyers use are essentially proprietary black boxes. Given the long history of housing discrimination in the United States, we were concerned that historical biases might be influencing these models behind the scenes, without the public being aware.”

The researchers pulled 50,000 publicly available property transfer records from 2018 to 2023 for Mecklenburg County, population 1.1 million in the last census. The team cross-referenced these transfer records with North Carolina voter rolls, which list each person’s race. Controlling for 50 factors, including home size and neighborhood crime rate, the team found that on average white-owned homes sold to private buyers for $36,051 more than Black-owned homes. But when homes sold to iBuyers, that difference shrank to $4,436, because iBuyers paid Black homeowners $4,376 more on average, while paying white homeowners $27,239 less.

“There’s very little reason for us to believe that there’s some purposeful intervention going on here,” said senior author , a 91̽��associate professor in the iSchool. “iBuyers are paying Black homeowners a little bit more, but not significantly more. Rather, iBuyers don’t seem to be willing to pay white homeowners what they might be able to earn if they sold through a traditional broker.”

In going through the data, the team also found aberrations in who purchased homes from iBuyers. When iBuyers sold homes in Mecklenburg, institutions — frequently real estate investment trusts — bought 25% of the homes. Yet when an individual (not an iBuyer) sold the home, institutions bought just 15%.

The team also found racial differences in this shift. When iBuyers bought and resold homes, both originally white-owned and Black-owned homes were bought up at greater rates by institutions. But the increase in institutional ownership for white-owned homes (from 9% for individuals to 17% for iBuyers) was greater than the increase for Black-owned homes (from 33% to 36%).

Conversion to institutionally owned real estate is associated with negative outcomes, including and .

“These real estate investment trusts tend to look for cheap homes that they can buy and convert to rentals so that they can profit over decades,” Weber said. “So this change in conversion rate from people to institutions is troubling because in the U.S. one of the substantial ways that people gain wealth and transfer it between generations is through homeownership.”

The researchers plan to take the method and apply it to other areas — such as Maricopa County, Arizona, and Orange County, Florida — with large amounts of iBuyers, available data on home sales and race, and demographic diversity. They also plan to interview people who’ve sold homes to iBuyers to learn what the experience is like.

“iBuyers are offering a service. They’re making the home sale process faster and simpler,” Slaughter said. “While our analysis in Mecklenburg suggests iBuyers are extending some disadvantages that Black home sellers tend to face to white home sellers as well, we don’t know that people are experiencing these sales as generally harmful or whether they’re aware of the tradeoffs that are involved.”

, a doctoral student in the iSchool, is also a co-author on this paper. This research was partially funded by New America’s program on Public Interest Technology.

For more information, contact Slaughter at is28@uw.edu and Weber at nmweber@uw.edu.

When people need legal advice but can’t afford a lawyer, they often turn to legal clinics where law students can offer representation and advocacy. When community organizations need advice on technology, they soon will be able to turn to a similar type of clinic at the 91̽��.

A pilot project led by the Information School’s will establish a public-interest technology clinic to serve community organizations and local governments in the Puget Sound region. The clinic will conduct policy analysis and do prototype. It can even build alternative technologies alongside groups that typically lack the resources to advocate for their interests in the face of technologies that conduct surveillance, gather biometric data or make decisions on behalf of “smart cities.”

The (PIT-UN) has awarded Weber a $178,808 grant to launch the clinic, which will focus on bringing the expertise of researchers and students to bear in serving the Puget Sound region. Established by the New America foundation, PIT-UN is a consortium of dozens of universities and colleges committed to developing a field of study that accounts for the ethical and societal implications of new technologies.

With technology companies constantly chasing the next innovation, a university can be better-equipped to study the long-term ramifications of those innovations and help people advocate for their interests, Weber said.

“Our region has had a profound impact on the technology sector, but with that impact comes a responsibility,” said Weber, an assistant professor at the iSchool whose research focuses on civic technology. “I see the clinic really as a way for us to reckon with the consequences of our technology development for people who have not always been served by public institutions, and that includes public universities.”

At the clinic, he and colleagues will develop coursework focused on public-interest technology, establish relationships between faculty and community organizations, and fund summer internships for students who will work with those organizations and help them seek policy changes from public-sector institutions.

The clinic’s “sweet spot” will be in scenarios where it has the potential to intervene and prevent potentially harmful effects from technologies that interact with people on a broad scale, Weber said. For example, privacy advocates might work with the clinic to help protect data private companies pick up from license plate readers, or advocates for those experiencing homelessness might work with the clinic to standardize data-gathering methods from city to city.

The PIT-UN funding will get the clinic off the ground and sustain it through its first 18 months. Weber envisions it as a pilot for a permanent clinic that’s part of a network across the country, with each tailored to the needs of its own community.

“There are many research centers and labs in our school and university, and we see the clinic model as complementing that basic reach focus. The clinic, we hope, is a way that we can do this service-oriented work in a sustainable way,” Weber said.

Meanwhile, a second 91̽��project received a $90,000 PIT-UN grant to continue a with the Tacoma Cooperative Network and Tacoma Public Libraries to provide affordable, publicly owned internet access to marginalized communities. The next phase of the project will expand to include two new partners — the Black Brilliance Research Project and API Chaya — and will shift to emphasize community training and digital literacy, said , a senior research scientist at the iSchool. Young is a collaborator on the project, which is led by , an assistant professor in the Paul G. Allen School of Computer Science & Engineering.

“I am excited about this phase because it will allow us to build community capacity to effectively manage and use the innovative internet infrastructure we implemented in Phase 1, thereby ensuring broad public impact for the work,” Young said.

The 91̽��projects are among 31 to win grants at 24 institutions. are led by the iSchool, Allen School, School of Law and Evans School of Public Policy & Governance.

PIT-UN is dedicated to building the field of public-interest technology through curriculum development, faculty research opportunities and experiential learning programs to inspire a new generation of civic-minded technologists and policy leaders. Its grant funders include the Ford Foundation, Hewlett Foundation and Mastercard Impact Fund.