Protecting LGBTQIA+ Homebuyers From Housing Discrimination Comes at a Cost

There are a number of decisions to weigh when deciding on a next home, but LGBTQIA+ home shoppers and renters also have to weigh whether they'll be protected from discrimination in their next neighborhood. 

A new analysis from Zillow revealed the typical cost of buying a home in states, cities, and counties with laws in place to protect LGBTQIA+ homebuyers from housing discrimination and found that LGBTQIA+ home shoppers typically pay a premium to live in an area offering these protections.

Even though these protections are now recognized at the federal level by the Department of Housing and Urban Development (HUD), Congress has not enacted explicit protections, so they can vary significantly locally.

States and cities that do not offer explicit protections can often make it feel like an "unwelcome" sign has been posted for LGBTQIA+ home shoppers. With fewer than half of U.S. states offering statewide laws and protections, the options for LGBTQIA+ homebuyers are limited.

"The unfair reality is that finding a home where buyers can feel safe, accepted and protected typically comes at a premium for LGBTQIA+ families," said Manny Garcia, Senior Population scientist at Zillow. "Not only are the states with statewide protections often among the most expensive in the country, but in states with an inconsistent patchwork of protections, the areas with those protections also tend to be more expensive."

Typical home values in jurisdictions with legal protections are about 46% higher than in places without those laws. LGBTQIA+ buyers in Hawaii – where the typical home value is about 180% higher than in U.S. areas with no protections–can expect to pay the highest premium, followed closely by California (148%), and Washington, D.C. (112%).

There are few states that offer protections and also have home values less than those without. Iowa boasts the largest discount, with a typical home value 30% less than one in a state or jurisdiction without protections.

Other states in this category include Michigan (-22%), Illinois (-17%), Wisconsin (-7%), and New Mexico (-3%).

The higher housing costs that LGBTQIA+ homebuyers disproportionately face may explain why LGBTQIA+ adults were more likely to agree that they are worried about the cost of housing in their neighborhoods: 74% agreed, versus 64% of cisgender heterosexual respondents.

Even with similar incomes to their cisgender heterosexual counterparts, LGBTQIA+ homebuyers are more likely to purchase multi-family home types such as duplexes, triplexes, or condos, which can offer relatively low-cost options in higher-cost markets.

Affording a home in areas with protections can require making meaningful sacrifices to avoid breaking the bank.

According to a Zillow survey of prospective and successful buyers, almost all LGBTQIA+ homebuyers (89%) reported making at least one sacrifice to save up for their down payment–such as postponing or canceling health services or skipping meals–compared to 78% of cisgender heterosexual homebuyers.

Overall, more work is needed to ensure an equitable housing market for all. For now, every for-sale and rental listing on Zillow displays local legal protections, such as protections for source of income and against LGBTQ discrimination, as well as a single flat-free rental application–a game changer for LGBTQIA+ renters who disproportionately pay more in upfront costs.

To read the full report, including more data, charts, and methodology, click here.