June 2024 Coach's Quiz

QUESTION #1

A landlord committed to fair housing compliance instructs its ad platform provider to ensure that its digital advertising reaches the broadest possible audience. The ad platform uses audience selection tools based on machine learning functions that target ads based on income and past purchasing patterns. Consequently, it excludes Black and Hispanic consumers from the audience. Who would be potentially liable for discriminatory advertising?

a.         The landlord

b.         The ad platform provider

c.          Both

d.         Neither  

QUESTION #2

What’s the best strategy for a landlord who deems it highly beneficial to use an AI-based ad platform to manage the potential liability risks involved?

a.         Avoid digital advertising just to be safe

b.         Use due diligence to select an advertising platform that’s likely to comply

c.          Require the ad platform provider to assume all of the liability risks of the ads it places 

COACH’S ANSWERS & EXPLANATIONS

QUESTION #1

Correct answer: c

Reason: Deliberately targeting ads for housing away from Black and Hispanic audiences is an FHA violation for which both the advertiser/landlord and the ad platform could be liable. This is true even if the exclusion is the natural product of an AI functionality, rather than a deliberate attempt to exclude. So, c is the right answer.

Wrong answers explained:

a. is wrong even though it’s true that a well-meaning landlord with no intent to discriminate could still be liable for the discriminatory effects and outcomes of its digital advertising. The fact that the landlord outsourced the advertising to the ad platform is no defense. As HUD notes in its parallel guidance on landlord use of tenant screening services, “under principles of direct liability, housing providers are responsible for ensuring their rental decisions comply with the FHA even if they have largely outsourced the task” in which the discrimination takes place. The only reason a. is the wrong answer is that the ad platform could also be liable.

b. is also a correct statement but the wrong answer. “Any entity that plays a substantial role in a discriminatory housing outcome can be liable under the [FHA], even if that entity or person is not the provider of housing,” according to the new digital advertising guidance. That clearly includes the provider of a digital ad platform used to disseminate discriminatory housing ads.

d.—neither—is the antithesis of the right answer to the extent that potential liability extends to both the landlord and the ad platform provider.

QUESTION #2

Correct answer: b

Reason: By being aware of the liability risks associated with digital advertising, the landlord has already won half the battle. The next step is to manage those risks. While the law remains unsettled, the clear implication of the new HUD guidance is that the agency won’t hold housing providers liable for discriminatory digital advertising as long as they take reasonable measures to ensure that their advertising content is nondiscriminatory. The best way to do that is to follow the five best practices set forth in this lesson, particularly in selecting an advertising platform that has wired itself to flag and defuse potential FHA issues in housing ads. So, b. is the right answer.

Wrong answers explained:

a. is wrong because nothing in the HUD guidance or related policy pronouncements suggests that landlords shouldn’t use digital media to advertise housing opportunities. Rather, the point is for landlords to beware of the discrimination risks embedded in digital advertising media when applied to housing and take steps to ensure the content and placement of their own digital ads aren’t based on protected characteristics or otherwise discriminatory.

c. is wrong because of the long-established rule that the landlord’s fundamental duty to comply with the FHA and other fair housing laws cannot be contracted out of or delegated. In essence, landlords remain on the hook for discrimination committed by their agents and vendors.