SafeRent Solutions, an AI-powered tenant screening tool, has reached a settlement to resolve a class action lawsuit filed in Massachusetts. 

What Happened: On Wednesday, U.S. District Judge Angel Kelley granted final approval for a settlement of about $2.3 million.

The lawsuit accused SafeRent’s algorithm of disproportionately scoring Black and Hispanic tenants, as well as those using housing vouchers, lower than other applicants.

Tenants with housing vouchers, who are more likely to be low-income, were reportedly more likely to be denied housing based on their AI scores. 

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As part of the settlement, SafeRent will stop using AI-generated scores to evaluate applicants who use housing vouchers.

The company will also cease providing any recommendations on whether landlords should accept or deny applicants with vouchers.

SafeRent spokesperson Yazmin Lopez told The Verge, “It became increasingly clear that defending the SRS Score in this case would divert time and resources SafeRent can better use to serve its core mission of giving housing providers the tools they need to screen applicants.”

Why It Matters: SafeRent has joined other property management platforms that are facing legal challenges over algorithmic practices.

This includes RealPage, an American property management software company, which is currently under investigation by the Department of Justice for alleged rent-inflating practices, the report noted.

SafeRent, backed by IA Capital Group, closed its latest funding round on Sept. 1, 2001, securing investment in a Series C round, according to Crunchbase.

The company faces competition from other firms in the tenant screening and property management space, with notable alternatives including Home Buyer Louisiana, PointCentral, and Ivan AI.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: SafeRent