Real Estate News & Commentary

When It Comes to Housing, LGBTQ Legal Protections Come With Bigger Price Tag

Expertise: Landlording & Rental Properties, Business Management, Personal Finance, Real Estate News & Commentary, Real Estate Investing Basics
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Amsterdam, The Netherlands, 3rd August 2013 - A Rainbow Flag flies from a house during Amsterdam Gay Pride

LGBTQ Americans are paying more than other Americans for housing if they want to live in areas that protect them from housing discrimination, according to Zillow, the online real estate database company.

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Currently, fewer than half of U.S. states have laws explicitly prohibiting housing discrimination based on sexual orientation and gender identity.

Housing Unaffordable for Many in Areas With LGBTQ Protections

The average cost of a home in areas with explicit legal protections for the LGBTQ community is $328,575—63% higher than areas with no protections. Buyers in Hawaii, Washington, D.C., and California—all places with legal protections in place—can expect to pay over 200% more than buyers elsewhere, although home values in Iowa, the only state with statutes specifically for protecting LGBTQ homebuyers, are 23% below the national average.

Many times, these buyers are making significant sacrifices to buy a house they can afford, including choosing homes in much worse condition, in less desirable parts of town, or of much less square footage than originally intended.

Typical Home Value in States with Statewide Protections for LBGT

Related: Forget the American Dream—Renting, Not Homeownership, is the Path to Financial Freedom

Because high home values generally correlate with high rents, LGBTQ renters also feel the pain in their pocketbooks. Federal Fair Housing laws protect renters from being denied housing for their age, color, national origin, religion, sex, disability, and familial status. Though sexual orientation and gender identity are not on this list, there are protections for LGBTQ renters that can fall under the sex, disability, and familial status umbrellas.

young female hands with LGBT rainbow ribbon wristbands holding craft wooden house

A 2018 ruling in the U.S. Court of Appeals for the Seventh Circuit (Wetzel v. Glen St. Andrew Living Community) set a precedent for landlord responsibilities for protecting LGBTQ tenants from homophobic harassment by other tenants.

In the ruling, Seventh Circuit Chief Judge Diane P. Wood wrote, "Not only does [the Fair Housing Act]create liability when a landlord intentionally discriminates against a tenant based on a protected characteristic; it also creates liability against a landlord that has actual notice of tenant-on-tenant harassment based on a protected status, yet chooses not to take any reasonable steps within its control to stop that harassment."

Related: The Interesting Influence Same-Sex Couples Have on Home Values (& How It Impacts Investors)

Federal Law Doesn’t Protect Against LGBTQ Discrimination

Still, there is no federal law that consistently protects LGBTQ individuals, so their housing discrimination complaints may go unheard. The list of Fair Housing Act protected classes doesn’t specifically include these tenants. The act could provide explicit non-discrimination protections for LGBTQ people in housing by adding “sexual orientation” and “gender identity” as protected characteristics.

Panoramic rainbow colors collection of doors in Dublin, Ireland

Zillow says it’s not likely that legal protections for LGBTQ people increase home values. Still, because these cities and states trend more expensive, the financial impact on LGBTQ buyers and renters is disproportionate.

“In addition to providing legal protections, there are other steps local and state governments can take to create housing markets that are more inclusive and accessible for LGBT people,” said Skylar Olsen, senior principal economist at Zillow. “We know LGBT buyers—especially LGBT buyers of color—are more likely to purchase affordable home types such as condos and townhomes.

“More local governments should work to allow more of these types of homes, opening up areas and neighborhoods that historically priced out many LGBT buyers. Legal protections for LGBT become more meaningful when people can afford to access them.”

Questions? Comments?

Join the discussion below!

Scott Royal Smith is an asset protection attorney and long-time real estate investor. His law firm, Royal Legal Solutions, helps thousands of real estate investors and entrepreneurs in all 50 states protect more than $1.2 billion in assets. Since 2014, he has published over 1,000 posts and articles on BiggerPockets and has appeared on hundreds of podcasts.
    Barry H. Investor from Scottsdale, AZ
    Replied 7 months ago
    SCOTT - Nice article and I realize it is impossible to go into all of the details of legislation at the state and federal levels, but it is alarming to hear a landlord can be held legally liable for not protecting an LGBTQ tenant from harrassment from another tenant? This creates a public safety duty for a landlord, duties specifically addressed by local, state and federal laws, ordinances, statutes, etc. Requesting an alleged victim of such harassment file their grievances with the proper local authorities would seem logical. If a landlord can be sued for not taking over the role of the police and the court system, I fear there may be fewer people willing to offer rental housing, affordable or otherwise.
    Jason Raymer
    Replied 7 months ago
    I agree with Barry about how/why landlords are to be held liable and be sued. At what extent would it end?? It simply isn’t their job and it will affect everyone in the long term. Fewer landlords, higher prices, more centralized more control. ...Starting to sound more socialist to me, but that’s just me. My first question is are they assuming that a specific group is being discriminated against in non-protected areas? There could no discrimination going on at all. That is a big leap to surmise the reasons of why sellers or landlords are charging more. Obviously there is a higher demand. Why could there be a higher demand in those areas? You’d have to obtain the data and drill down into it to find out the real reason or combination of reasons of why people want to live in those places. Good data can really surprise you of what it reveals. Now, there are many variables besides legal protections that make a location appealing and I’m betting most people are buying or renting in those areas for more than one reason. People may not move there at all for the protections, but may move there because of the quality of homes, how clean the neighborhood is, how safe they are, are they located near schools or parks?, etc. So, the people of the community or group you are speaking of may not even be moving there because of those protections. Honestly, some of them may care less about those protections. I based my decision on purchasing my house on multiple things. Also...There is always something that I’m not protected from by the government. I’ll give an example about the appeal of an area: Part of why I like the area I’m in now is because the association has rules that limit how people keep their homes/yards. I also like that they take care of common areas. I’m willing and can now afford to pay those fees. I wouldn’t have surmised that in the past I couldn’t live here because I was black, white, Hispanic, tall, or short, etc. I wouldn’t assume it had anything to do with discrimination. In fact, I used to be adverse to having to be in an association — Rates, rules, etc. Let’s not make gigantic assumptions about discrimination that may or may not exist. There are many other things the government could protect us from and yet we don’t get protections for those. Just a little tidbit of info: The median home value in Anchorage, Alaska is $328,889, do they have those protections you speak of? I don’t know.