MRED fires back at Zillow report alleging bias in private listings

“MRED launched the PLN in 2016 to make all properties available to all agents and brokers in the market. We want to prevent the use of shadow networks outside the MLS that could lead to discrimination and exclusion,” the statement said.

The answer comes after Zillow published an analysis showing that homes in predominantly white neighborhoods in Chicago are more than twice as likely to be on the private market than homes in predominantly non-white neighborhoods. The analysis was based on a survey of more than 40,000 home listings that were active on the MRED platform on October 21 and distributed via MLS GRID.

Zillow’s internal planning and strategy documents

MRED’s response cites some of Zillow’s internal planning and strategy documents, which were made public on Friday by Compass CEO Robert Reffkin. Compass obtained these “highly confidential” documents during discovery in the lawsuit against Zillow, and presented them as evidence at a hearing last week for Compass’s preliminary injunction in the lawsuit.

Zillow’s “Strategy Synthesis” documents, which Reffkin posted on social media on Friday includes statements like “everything about the hardline plan assumes that we can be successful in using a hammer to keep sellers and agents on our site,” and “we want to punish the agent for choosing to post his listing on alternative networks.”

According to the planning documents, the goal of Zillow’s “hardline strategy” was to get sellers to switch agents, or switch from broker to broker, in favor of posting listings on Zillow. One of the tactics Zillow listed to help facilitate this plan was to “mobilize local and national organizations to publicly warn real estate agents and brokers about the fair housing risks of reduced access to real estate information.”

Given this context, MRED wrote in its statement that it is “not surprising” that Zillow conducted a one-day study in the Chicagoland market that attacked MRED’s PLN.”

“Notably, Zillow’s strategy document does not explicitly mention protecting Fair Housing principles, other than using it as a tactic in its ‘Model Market Playbook,’” MRED wrote.

MRED: ‘All members have access to the PLN’

While MRED believes these strategy documents show Zillow wants to punish agents for choosing to post their listings on platforms like MRED’s PLN, the MLS said they are “proud of the steps we have taken to support all business models in our MLS to work together.”

MRED noted that all members have access to the PLN, meaning that no matter what neighborhood or area an agent works in, they can see all private listings in MRED’s service area.

The MLS said it has reached out to Zillow for more information about the methodology, but noted that there are three times as many active listings in predominantly white zip codes as non-white zip codes and that it believed the analysis did not appear to take into account other factors such as rentals and off-MLS transactions (including their own For Sale By Owner properties).

Additionally, MRED noted that iBuyers and institutional investors are heavily targeting non-white majority neighborhoods, ultimately converting these properties into rental properties. MRED cited an MIT study about iBuying, which argued that “seller vulnerability could play a role, as homeowners in these communities are more likely to accept below-market offers due to financial strain, lack of savings for repairs, or the need for immediate liquidity.”

“In our view, Zillow’s approach in Illinois and its recent criticism of MRED’s PLN appears to be driven less by data and more by a cynical strategic objective: securing control over listing distribution to protect its revenues,” the statement said. “Their criticism of MRED’s PLN does not appear to be about protecting consumers or promoting fair housing. It appears to be part of a broader strategy to secure complete control over listing distribution and undermine MRED’s cooperative foundation.”