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LGBT Home Buyers May Be Priced Out of Areas With Legal Protections From Discrimination

LGBT home-buyers and renters must pay a premium to live in states, cities and counties that offer legal protection from discrimination. Photo: Shutterstock

Currently, only 22 states and the District of Columbia offer statewide laws explicitly prohibiting housing discrimination based on sexual orientation and gender identity.

SEATTLE, Washington. June 21, 2020 (Zillow Research) — LGBT home-buyers and renters must pay a premium to live in states, cities and counties that offer legal protection from discrimination. While it is unlikely that legal protections for LGBT people increase home values, the fact these areas are more expensive has a disproportionate impact on LGBT buyers and renters aspiring to live there.

Zillow analyzed the typical cost of buying a home in states, cities and counties with laws in place to protect LGBT buyers from housing discrimination. These protections include safeguards against eviction, from being denied housing and/or from being refused the ability to rent or buy housing based on sexual orientation or gender identity. Typical home values in those jurisdictions with legal protections are about $127,000 higher than home values in places without those laws — about $328,575 compared to $201,462. And because high home values generally correlate with high rents, LGBT renters also feel the effects of the price premiums.

National housing and employment non-discrimination laws protect classes including sex, race, age, color, religion and national origin. The Supreme Court on Monday affirmed job protections for people who identify as LGBT, but explicit protections against housing discrimination do not exist at the federal level, and vary significantly based on local jurisdictions. Currently, only twenty-two U.S. states and the District of Columbia offer statewide laws explicitly prohibiting housing discrimination based on sexual orientation and gender identity.

Many of these jurisdictions also offer the LGBT community legal protections beyond housing, including employment and public accommodation protections. While it’s not the specific legal protections bumping up home values in these states, those who identify as LGBT, among other buyers and renters, should expect to pay more to buy or rent in areas that offer protections through anti-discriminatory policies.

LGBT buyers in Hawaii, Washington, D.C., and California can expect to pay the biggest premium to live in an area with those protections. Home values in Hawaii are about 219% higher than the typical home values in areas with no protections. Washington, D.C., is a close second at 218% higher, followed by California at 187%. Iowa is the only state with explicit protections for LGBT homebuyers where the typical home costs less (by 23%) than in places without protections.

States without anti-discrimination laws for the LGBT community often have cities and counties that do provide legal protections, but those still largely come at a premium. For example, Austin, Texas, has local regulations protecting LGBT homebuyers from housing discrimination. The typical home value in Austin is $401,999 — 90.3% higher than the state overall, and 99.5% higher than the nation in areas without protections.

For many, being able to afford to live in these protected areas means making meaningful sacrifices to avoid breaking the bank. More than 70% of LGBT buyers said they made at least one sacrifice to stay at or below budget, compared to 58% of cisgender heterosexual buyers, according to Zillow’s Consumer Housing Trends Report. Sacrifices include buying a home in worse condition, one without desired finishes, and/or one that is smaller than initially planned.

While LGBT buyers and renters have similar incomes to their cisgender heterosexual counterparts, LGBT people as a whole are slightly more likely to have incomes below $24,000 (25%) compared to cisgender heterosexual people (18%) according to the Williams Institute at UCLA — indicating that LGBT people could also be disproportionately excluded from formal renting and homeownership.

Methodology

To estimate the cost of buying a home in jurisdictions with and without legal protections for LGBT people, Zillow employed the Zillow Home Value Index for states, counties, and cities with varying levels of legal protections for LGBT people. By taking the populated-weighted median of these jurisdictions, estimates for three categories of jurisdictions (all legal protections, some legal protections, and no legal protections) revealed that LGBT buyers aspiring to live in areas that protect them from legal discrimination can expect to pay a premium.

To prevent duplicatively counting municipalities with protections (like Austin, Texas for example) towards the cost of housing in states that lack such protections (like Texas as a whole), the populations of municipalities with protections were subtracted from larger containing jurisdictions when calculating the population-weighted median.