The Horror – Discriminatory Advertising on the Internet!

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Nothing has
ever made it so easy for buyers and sellers to get together and
engage in trade as the Internet. It reduces transaction costs immensely
because they can find each other so readily. And if one seller doesn’t
have what a buyer wants, all that has been lost is the few seconds
of time and the energy it takes for another mouse click.

Everyone understands
that if an Internet seller doesn’t have exactly what you want,
or insists on terms you won’t accept, or chooses to sell to
someone else, it’s no big deal. You simply move on. Well, not
quite everyone. It turns out that there are authoritarians who want
to use the law to punish people who have real estate for sale or
rent and advertise on the Internet that they have preferences for
the people with whom they would contract. Cries are going up for
litigation or legislation to end this monstrous attack on the nation’s
commitment to “fair housing.”

The federal
Fair Housing Act of 1968, one of the most offensive pieces of legislation
signed by Lyndon Johnson (with LBJ, there were so many), makes it
illegal for those who sell or rent housing to discriminate against
buyers or renters. The prohibition extends to advertising. It is
a violation of the law to hint even obliquely that you have a preference
for a contracting party who has certain characteristics or doesn’t
have others. If, for example, a landlord were to advertise that
he has an apartment that’s “Great for a stable family,”
that could be interpreted to mean that gays aren’t welcome.
Of if an ad pictured a group of tenants enjoying a pool party, but
the photo didn’t show anyone from different minority groups,
that could be a hidden message that whites are preferred. Anyone
who sells or rents property must be constantly alert to be sure
that he is not in violation of this vague but aggressively enforced
law.

Following the
passage of the Fair Housing Act, a plethora of “Fair Housing
Centers” sprang up around the United States, staffed by eager
crusaders who want to stamp out the supposed problem of housing
discrimination. Those organizations have frequently brought lawsuits
against sellers and lessors of housing and extorted substantial
sums of money in exchange for a settlement. What now has the fair-housing
crusaders in a snit is the emergence of Internet sites such as Craigslist,
where properties are advertised. Sometimes ads run afoul of the
law forbidding seller preferences – for example, one by a woman
with an apartment to rent specifying that she wants a young, single
female tenant. The law says that no discrimination is allowed and
that woman is flagrantly violating it.

“Fair
housing” advocates are up in arms, of course. The executive
director of the Greater New Orleans Fair Housing Action Center said
in congressional testimony recently that discriminatory postings
“are perhaps the most concerning issues we have confronted
since the hurricanes.” A Chicago-based group has filed suit
against Craigslist for running “discriminatory” ads. While
court decisions have thus far held Internet sites immune from liability
for the speech of those who post on them, the housing activists
say that discriminatory housing ads shouldn’t be allowed. (A
New
York Times article
published last year discusses this controversy.)

The judges
and politicians who wrestle with this issue ought to stop and ask
a simple question: Is there any harm here? If someone looking for
housing on the Internet comes across an ad making it clear that
the owner prefers to deal with people who have attributes he doesn’t
have, all the searcher needs to do is click on another ad. That
inconvenience is no different from searching for other goods, services,
or information on the Internet. If one place doesn’t have just
what you want, you just move along. Most housing sellers don’t
turn away prospective customers. Instead of attempting to stamp
out “discrimination” – the pejorative term for having
a preference in contracting – why not use the remarkable facility
of the Internet to bypass it? If one landlord says that he would
prefer a white, Catholic family, what’s so hard about searching
a little longer to find one who cares only about getting paid each
month?

While the judges
and politicians are at it, they might examine the central premise
of “fair housing” legislation, namely that the preferences
of those who sell or rent housing should be disallowed. If, for
whatever reason, a landlord prefers to have tenants with certain
characteristics, why should that be any business of the government?
Buyers are permitted to act in accordance with their preferences.
There is no law against buyer “discrimination” in housing,
or anything else. If a prospective tenant looks at a house or apartment
and decides to walk away, no law permits the disappointed landlord
to sue him if he suspects that the reason he decided not to enter
into a contract is a “bad” one. Not exactly equal protection
under the law.

I am not suggesting
that the law should be made symmetrical by extending anti-discrimination
features to cover both sides of the contract. Instead, it should
be made symmetrical by eliminating it from the seller’s side.
The proper rule to follow is that of the common law of contracts,
requiring mutual assent before the law recognizes any contract.
If one party has obtained the other’s assent through duress,
then there is no true contract; and with its anti-discrimination
laws, the government has introduced duress into every housing contract.
We should return to the time when either side could say “no”
without fear of reprisal.

As for you
folks at the various “fair housing” centers, if you’re
really worried about renters who are turned down or advised not
to apply, then just turn on your computer and help them find landlords
who want to contract with them. It won’t be hard, and it won’t
involve any coercion.

March
6, 2007

George
C. Leef [send him mail]
is the director of the Pope Center for Higher Education Policy in
Raleigh, North Carolina, and book review editor of The
Freeman
.

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