Laffey, Keller Williams real estate offices to pay $115G in housing discrimination settlement
Three Long Island real estate brokerages have agreed to settle claims their agents engaged in illegal housing discrimination based on evidence documented in a Newsday investigation, Attorney General Letitia James and Gov. Kathy Hochul announced Tuesday.
Keller Williams Greater Nassau in Garden City, Keller Williams Realty Elite in Massapequa and Laffey Real Estate in Greenvale agreed to pay a combined $115,000, which will support fair housing enforcement and training for real estate agents.
Parallel investigations by the attorney general’s office and the New York Department of State, which licenses real estate agents, began after Newsday published Long Island Divided, a three-year investigation of unequal treatment in the real estate industry, in 2019. The government investigators alleged that agents working with the brokerages violated the federal Fair Housing Act, state Human Rights Law and state real estate law.
In Newsday’s project, paired testers posing as homebuyers — one white and one minority, with the same financial qualifications — used hidden cameras to record their interactions in 86 fair housing tests. In 40% of the tests, evidence suggested that agents subjected minority testers to disparate treatment in comparison with white testers. Black testers experienced disparate treatment 49% of the time, compared with 39% for Hispanic and 19% for Asian testers. Newsday relied on two nationally known experts in fair housing standards to evaluate the agents’ actions.
The state’s investigation, which relied on Newsday’s hidden-camera footage of agents’ interactions with the testers, “found that agents associated at these firms steered prospective homebuyers of color away from white neighborhoods and subjected them to different requirements than white homebuyers, and otherwise engaged in biased behavior,” according to a joint announcement from James, Hochul and the Department of State.
The two Keller Williams offices agreed to pay $25,000 to Suffolk County to promote fair housing enforcement and compliance. They will also spend $25,000 on fair housing courses for their agents. Keller Williams, based in Austin, Texas, operates as a real estate franchise company and separate owners run the two offices named in the settlement. Those owners are required to provide the training at no cost to their agents for three years.
Laffey Real Estate will pay $30,000 to the state and $35,000 to Suffolk County to conduct unannounced fair housing testing of Laffey agents over the next three years. Laffey has approximately 575 agents in 11 offices located in Nassau, Suffolk and Queens.
The two Keller Williams offices "explicitly denied the allegations made by Newsday and the Government Agencies," their settlement states. They did not admit wrongdoing in the settlement. Laffey Real Estate neither admitted nor denied the allegations against the company in its settlement.
Greg Masaitis, owner of Keller Williams Realty Elite, declined to comment. Keller Williams Greater Nassau and Laffey Real Estate did not respond to requests for comment.
James said the investigation showed real estate agents giving preferential treatment to white homebuyers, disparaging Black and Hispanic neighborhoods and directing minority homebuyers to neighborhoods where residents are predominantly nonwhite.
“Efforts to discriminate against any New Yorker's fair access to housing cannot, and will not, be tolerated,” James said in a statement. “These investigations have uncovered a pervasive culture of allowing unlawful discrimination and violations of every New Yorker’s right to fair housing. These settlements should send a clear message: if you discriminate and deny New Yorkers their basic right to housing, we will take action.”
Hochul said in a statement, the settlement sends the message that “New York state has zero tolerance for discrimination.”
“Real estate professionals in New York state have an obligation to provide fair and equitable services to all,” Robert J. Rodriguez, New York’s Secretary of State who oversees the licensing of real estate agents, said in a statement.
Ian Wilder, executive director of Long Island Housing Services in Bohemia, said he appreciated that the settlement was forward-looking in requiring the brokerages spend money to support future fair housing testing and training.
"It was substantial enough that it would make a difference, and whether it's a deterrent, we'll have to see going forward," Wilder said. The state "made a strong point that New York State government is not putting up with anything that looks like discrimination ... and that they will take action to make sure laws aren't broken."
Since Newsday's Long Island Divided project was published, New York state has taken steps to address housing discrimination, including funding fair housing testing and passing a package of new laws, said Elaine Gross, founder and president of ERASE Racism, a civil rights organization based in Syosset. While the settlement is welcome news, it is the "tip of the iceberg," she said.
Gross said real estate companies "need to be monitored for whether they have policies in place and are sticking to those policies that require consistent treatment of their clients."
She said more consistent enforcement of fair housing laws is needed too.
"I don't want anyone to believe that because this has happened, with these three instances here, that it's a new day," she said. "Because it isn't."
The settlement requires the brokerages to designate an employee to receive and investigate complaints alleging discrimination and report them to the state. They agreed to a document-retention policy that will allow the attorney general to request records, such as emails, if it pursues a future investigation.
Agents at the two Keller Williams offices are required to sign a code of engagement that sets consistent protocols for when they require clients to sign exclusivity agreements, obtain mortgage preapproval from lenders or provide financial information.
The attorney general’s office said it is continuing to investigate another real estate brokerage in connection with Newsday's project but declined to disclose the company’s name. It accepts housing discrimination complaints online at ag.ny.gov/bureau/civil-rights.
Three Long Island real estate brokerages have agreed to settle claims their agents engaged in illegal housing discrimination based on evidence documented in a Newsday investigation, Attorney General Letitia James and Gov. Kathy Hochul announced Tuesday.
Keller Williams Greater Nassau in Garden City, Keller Williams Realty Elite in Massapequa and Laffey Real Estate in Greenvale agreed to pay a combined $115,000, which will support fair housing enforcement and training for real estate agents.
Parallel investigations by the attorney general’s office and the New York Department of State, which licenses real estate agents, began after Newsday published Long Island Divided, a three-year investigation of unequal treatment in the real estate industry, in 2019. The government investigators alleged that agents working with the brokerages violated the federal Fair Housing Act, state Human Rights Law and state real estate law.
In Newsday’s project, paired testers posing as homebuyers — one white and one minority, with the same financial qualifications — used hidden cameras to record their interactions in 86 fair housing tests. In 40% of the tests, evidence suggested that agents subjected minority testers to disparate treatment in comparison with white testers. Black testers experienced disparate treatment 49% of the time, compared with 39% for Hispanic and 19% for Asian testers. Newsday relied on two nationally known experts in fair housing standards to evaluate the agents’ actions.
What to know
- Three Long Island real estate brokerages agreed to pay $115,000 in settlements with state Attorney General Letitia James that followed Newsday’s Long Island Divided investigation into unequal treatment of minorities by the industry.
- James said her office’s investigation showed real estate agents giving preferential treatment to white homebuyers, disparaging Black and Hispanic neighborhoods and directing minority homebuyers to neighborhoods where residents are predominantly nonwhite.
- The money paid in the settlements will support fair housing enforcement and training of real estate agents.
The state’s investigation, which relied on Newsday’s hidden-camera footage of agents’ interactions with the testers, “found that agents associated at these firms steered prospective homebuyers of color away from white neighborhoods and subjected them to different requirements than white homebuyers, and otherwise engaged in biased behavior,” according to a joint announcement from James, Hochul and the Department of State.
The two Keller Williams offices agreed to pay $25,000 to Suffolk County to promote fair housing enforcement and compliance. They will also spend $25,000 on fair housing courses for their agents. Keller Williams, based in Austin, Texas, operates as a real estate franchise company and separate owners run the two offices named in the settlement. Those owners are required to provide the training at no cost to their agents for three years.
The offices of Keller Williams Realty Elite in Massapequa. Credit: Newsday/Alejandra Villa Loarca
Laffey Real Estate will pay $30,000 to the state and $35,000 to Suffolk County to conduct unannounced fair housing testing of Laffey agents over the next three years. Laffey has approximately 575 agents in 11 offices located in Nassau, Suffolk and Queens.
The two Keller Williams offices "explicitly denied the allegations made by Newsday and the Government Agencies," their settlement states. They did not admit wrongdoing in the settlement. Laffey Real Estate neither admitted nor denied the allegations against the company in its settlement.
Laffey Real Estate headquarters in Greenvale. Credit: Dawn McCormick
Greg Masaitis, owner of Keller Williams Realty Elite, declined to comment. Keller Williams Greater Nassau and Laffey Real Estate did not respond to requests for comment.
James said the investigation showed real estate agents giving preferential treatment to white homebuyers, disparaging Black and Hispanic neighborhoods and directing minority homebuyers to neighborhoods where residents are predominantly nonwhite.
“Efforts to discriminate against any New Yorker's fair access to housing cannot, and will not, be tolerated,” James said in a statement. “These investigations have uncovered a pervasive culture of allowing unlawful discrimination and violations of every New Yorker’s right to fair housing. These settlements should send a clear message: if you discriminate and deny New Yorkers their basic right to housing, we will take action.”
Hochul said in a statement, the settlement sends the message that “New York state has zero tolerance for discrimination.”
“Real estate professionals in New York state have an obligation to provide fair and equitable services to all,” Robert J. Rodriguez, New York’s Secretary of State who oversees the licensing of real estate agents, said in a statement.
Sign outside the offices of Keller Williams Realty of Greater Nassau in Garden City. Credit: Howard Schnapp
Ian Wilder, executive director of Long Island Housing Services in Bohemia, said he appreciated that the settlement was forward-looking in requiring the brokerages spend money to support future fair housing testing and training.
"It was substantial enough that it would make a difference, and whether it's a deterrent, we'll have to see going forward," Wilder said. The state "made a strong point that New York State government is not putting up with anything that looks like discrimination ... and that they will take action to make sure laws aren't broken."
Since Newsday's Long Island Divided project was published, New York state has taken steps to address housing discrimination, including funding fair housing testing and passing a package of new laws, said Elaine Gross, founder and president of ERASE Racism, a civil rights organization based in Syosset. While the settlement is welcome news, it is the "tip of the iceberg," she said.
Gross said real estate companies "need to be monitored for whether they have policies in place and are sticking to those policies that require consistent treatment of their clients."
She said more consistent enforcement of fair housing laws is needed too.
"I don't want anyone to believe that because this has happened, with these three instances here, that it's a new day," she said. "Because it isn't."
The settlement requires the brokerages to designate an employee to receive and investigate complaints alleging discrimination and report them to the state. They agreed to a document-retention policy that will allow the attorney general to request records, such as emails, if it pursues a future investigation.
Agents at the two Keller Williams offices are required to sign a code of engagement that sets consistent protocols for when they require clients to sign exclusivity agreements, obtain mortgage preapproval from lenders or provide financial information.
The attorney general’s office said it is continuing to investigate another real estate brokerage in connection with Newsday's project but declined to disclose the company’s name. It accepts housing discrimination complaints online at ag.ny.gov/bureau/civil-rights.
State revokes real estate license of Keller Williams agent
State Attorney General Letitia James announced settlements with three Long Island real estate brokerages Tuesday. But the individual agents at those brokerages who were named in Newsday's Long Island Divided project were not part of those agreements.
Those agents are part of a separate, parallel investigation. The New York Department of State has filed complaints or taken action against the licenses of 25 real estate agents and four real estate instructors named in Long Island Divided. Outcomes in those cases, which are decided by an administrative law judge, have included the revocation of agents’ licenses, temporary suspensions, fines, or dismissals of the state’s cases. Some of those cases are still ongoing.
The settlements announced Tuesday referenced the conduct of four Keller Williams and Laffey agents whose real estate licenses the Department of State sought to revoke or suspend. In earlier decisions by administrative law judges, one Keller Williams agent had her license revoked and another was fined. The state withdrew its case against one Laffey agent and dismissed its case against the other.
Aminta Abarca, an agent formerly with Keller Williams Realty of Greater Nassau
Abarca required a Black tester working with Newsday to sign a buyer's agreement to be his exclusive agent before showing him any homes, but did not require the same of a white tester looking for homes in the same area. She also engaged in steering encouraging the Black tester to look at homes in Baldwin and Elmont instead of Hempstead, while referencing demographic and school information in Hempstead, according to Administrative Law Judge John Kenny’s decision. Her license expired in June 2020, but Kenny revoked it as well as part of his decision in November.
Judi Ross, an agent formerly with Keller Williams Realty Elite
Administrative Law Judge Aiesha Hudson found substantial evidence that Ross demonstrated incompetency based on conversations she initiated about school districts and her failure to provide required agency disclosure forms. She was fined $750. But Hudson said the state failed to prove Ross treated the testers differently. During a conversation with a white tester, Ross warned the prospective buyer she wouldn’t look in towns with certain school districts, such as Freeport, Baldwin and Amityville. She did not give the same warning to the Black tester, encouraging him to look up school district report cards. In her decision in January, Hudson said the state failed to “show by substantial evidence that the disparity in treatment in this case was racially motivated.” She found Ross’ testimony credible that her advice was based on her knowledge of school ratings, not race.
Diane Leyden, an associate broker with Laffey Real Estate
The Department of State filed a complaint against Leyden but later withdrew it. Leyden had met with two of Newsday's testers — one white, one Hispanic — seeking homes around $1.5 million around the Great Neck and Port Washington peninsulas. She gave the white tester 31 listings in areas where the average census tract was 76% white. The Hispanic tester received 27 listings in areas that averaged 69% white. The white tester received six listings in Roslyn, while the Hispanic tester received none. Leyden asked the Hispanic tester about his finances and advised him not to view homes outside his financial means. She didn’t ask about the white tester’s finances and told him, “You might be more comfortable in a certain demographic area that isn’t heavily one way or another in terms of people.” Leyden declined to comment Tuesday.
Nancy Anderson, an agent formerly with Laffey Real Estate
Administrative Law Judge Aiesha Hudson dismissed the Department of State’s case against Anderson in December because of “insufficient evidence” she discriminated against a Black tester based on his race by requiring he provide a mortgage preapproval letter. Anderson testified that the Black tester was the first homebuyer she met with in her real estate career. After meeting with him for over an hour, she stepped away and deferred to a supervisor on how to close the meeting who advised her to not take clients to see homes without a preapproval letter. In the time before she met with a white tester, three months later, she had undergone training and learned that as an independent contractor, she needed to set up protocols for herself on how to handle clients. During that time, she had decided not to require clients to provide preapproval letters before showing them homes, according to court documents. Hudson found Anderson's explanation credible.
Anderson, who continues to work in real estate, said Tuesday she is dedicated to her clients and stands by the respectful way she treated the fair housing testers in the videos published by Newsday, with the first fair housing test occurring during her first week working as a realtor.
"I put my best foot forward," she said. "I figured, 'Eventually everything will come out, and they will see I was being the best person I could be in the first week of my real estate life.'"
Correction: Diane Leyden's status with Laffey Real Estate was incorrect in an earlier version of this story.
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
