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Long IslandInvestigations

State needs to enforce existing laws to fight housing discrimination, activists say

A view from the air of Levittown.

A view from the air of Levittown.   Credit: Newsday File/Kevin Coughlin

New York has the power to impose severe discipline on real estate agents and brokers who discriminate, but fair housing attorneys and advocates say there’s a wide gap between the state’s powers and its actual enforcement of the law.

And state agencies need to do more to protect homebuyers and renters from bias, advocates say.

At a State Senate hearing on housing discrimination at Hofstra University on Thursday, fair housing experts say they will push officials to enforce the law more vigorously and enact new anti-discrimination measures. They also say they will ask state agencies to review evidence gathered in Newsday’s three-year investigation into housing bias on Long Island and to take disciplinary action if they find indications of illegal discrimination.

In its Long Island Divided investigation, Newsday sent testers to meet with real estate agents and record the meetings with hidden cameras to determine whether minority testers were being treated in discriminatory ways. In 34 of Newsday's 86 paired tests, two nationally known fair housing experts saw evidence of potential violations of fair housing laws. 

“The evidence that Newsday has on those videos, that is good enough evidence for the state to be able to say, ‘Look, that person is not acting in accordance with their license, they’re violating the Fair Housing Act,’” said Elaine Gross, president of Syosset-based ERASE Racism, who is scheduled to testify at the hearings.

In response to Newsday's investigation, three state Senate committees — Housing, Construction and Community Development, led by Sen. Brian Kavanagh (D-Manhattan); Consumer Protection, led by Sen. Kevin Thomas (D-Levittown); and Investigation and Government Operations, led by Sen. James Skoufis (D-Woodbury), which has the power to subpoena witnesses — plan to call government officials, representatives from the real estate industry and members of nonprofit groups. Legislators say they expect the testimony will lead to reforms to be introduced in the next legislative session.

Gross will testify along with Fred Freiberg, executive director of the Fair Housing Justice Center and a consultant for Newsday’s investigation. 

M. Ryan Gorman, president and chief executive of NRT LLC, a subsidiary of Realogy Holding Corp., a New Jersey-based real estate company, also is scheduled to testify, a spokesman said. Realogy is the owner or franchiser of real estate companies Century 21 Real Estate LLC, Coldwell Banker Residential Brokerage on Long Island, the Corcoran Group and Daniel Gale Sotheby's International Realty.  Newsday tested agents associated with all four, finding evidence of disparate treatment in 10 cases involving Century 21 and Coldwell Banker agents in the judgment of Newsday's two fair housing experts. 

In a statement, the Realogy spokesman said: "Realogy takes the recent Fair Housing-related reporting by Newsday very seriously. We are committed to serving all consumers well and equally during a significant milestone moment in their lives, which is why we have been avid and public supporters of Fair Housing legislation … Realogy supports the New York State Senate Committee’s efforts to explore expanding legislation to help correct any deficiencies and to provide consistency across the industry. We appreciate the opportunity for a senior company leader to participate in this important process and to reaffirm publicly our commitment to Fair Housing."   

The New York State Association of Realtor's chief executive, Duncan MacKenzie, and its president, Moses Seuram, also are scheduled to testify.


Gross and  Freiberg said they will push state agencies to:

  • make more use of the state’s powers to suspend or revoke the licenses of agents who discriminate;
  • improve coordination between the agencies that handle bias complaints;
  • increase monitoring of state-mandated fair housing training;
  • require local governments to obey anti-discrimination laws and take action to remedy segregation. 

“The enforcement agencies have to take a more robust and proactive posture in enforcing fair housing laws,” Freiberg said.

In addition to enforcing its existing laws, the state also should provide funding for paired testing of agents, in which white and nonwhite buyers or renters visit agents to see whether they offer equal service, Freiberg said. It’s not enough to rely on consumers to report bias, since discrimination is often hidden and victims have no idea they're being disadvantaged, he said.

Freiberg compared real estate brokerages to the state’s restaurants, which must pass random, unannounced inspections. “When it comes to public safety, public health or protecting public funds, proactive investigations are nothing new,” he said.

State law gives two separate agencies the ability to penalize real estate agents for housing discrimination.

The Department of State, which licenses real estate agents and brokers, can suspend or revoke licenses for fair housing violations or impose fines of up to $1,000 per violation.

The state Division of Human Rights, which enforces civil rights laws, can require agents who discriminate to pay up to $10,000 in damages, as well as civil penalties up to $50,000, or up to $100,000 for bias that is "found to be willful, wanton or malicious."

A spokeswoman for the Department of State said the agency "takes all allegations of discrimination extremely seriously, acts on all complaints received about licensed real estate professionals and works vigorously to enforce the Fair Housing Act. As a result of the troubling findings reported in Newsday, and at [Gov. Andrew M. Cuomo's] direction, we are investigating the allegations of housing discrimination practices specifically by Long Island real estate agents and we will pursue disciplinary or punitive action to the fullest extent of the law."

Both state agencies "will investigate and prosecute any and all fair housing complaints," the spokeswoman said. Both agencies have the power to issue subpoenas and conduct investigations, she said. 

Fair housing advocates, however, said the agencies have not done enough in recent years to impose serious penalties on agents and brokers who break the law.

In one 2016 case, the Division of Human Rights reached an accord with broker Arthur Zagelbaum of Ben Art Realty Corp., a New Hyde Park-based real estate management company, mandating fair housing training and a written anti-discrimination policy. The same year, Ben Art settled with the nonprofit Long Island Housing Services. The group said its testers found the landlord was illegally refusing to rent to those who get subsidies for people with disabilities.

In a 2017 consent order with the Department of State, the company, which has more than 300 rental apartments on Long Island and in Queens, agreed to pay a $1,000 fine.

Ben Art did not respond to requests for comment.

Gross said New York should raise the Department of State's maximum fines for such violations, calling a $1,000 fine for a large real estate company “a slap on the wrist.”

By contrast, she said, ERASE Racism and the Fair Housing Justice Center reached a $230,000 settlement that resolved a federal lawsuit against a Commack apartment complex owner in 2016 after testing showed the landlord was discriminating against African Americans.

The difference between the amounts that can be obtained in a court settlement and the relatively low fines imposed by the state “is one of the reasons why some people prefer using the courts,” Gross said.

Freiberg said he believes the Department of State should suspend or revoke agents’ licenses if they are found to have discriminated.

Doing that, he said, would send “a more powerful message to the industry … because that's your entire livelihood that's being taken away from you. And it seems to me that the whole point of licensing is to try and regulate the industry and ensure that they’re complying with the law.”

New York’s Department of State used to suspend and revoke licenses in housing discrimination cases. State records show that from 1987 through 1997, several real estate agents or brokers had their licenses suspended or revoked for fair housing law violations.

For instance, in 1993, the New York Department of State sent eight of its own employees — four of them African American, four of them white — to a Franklin Square brokerage, posing as couples seeking homes in the same price range in Franklin Square. The white testers were shown available homes, while the African American testers were told no homes were available in the then-overwhelmingly white community.

A Department of State administrative law judge, Roger Schneier, revoked the license of the agent who was found to have discriminated. Schneier wrote in his decision that the agent’s “claim that she would not discriminate against black persons in the sale of housing because one of her two adopted children is half black is unconvincing. Unfortunately, persons often do not follow in business the moral principles that they apply to their private life.”

In an interview this week, Schneier, who is retired but still hears cases on a per-diem basis, said paired tests can help determine whether an agent is discriminating.

“I don’t know how you make the case if you don't have the testers,” Schneier said. If testers of different races are treated differently, he said, “It's self-evident what's going on. But if you all you have is a minority person who says, ‘They discriminated against me,’ I don't know exactly how you prove it. It becomes a much more circumstantial case.”

Gail Shaffer, who headed the Department of State under then-Gov. Mario Cuomo from 1983 through 1994, said discrimination was “rampant” at the time. She said her agency pushed to get money in the state budget to conduct paired testing, and she said Mario Cuomo’s experience as New York’s secretary of state in the 1970s helped him understand the need for it.

“In terms of advocating within the governor’s office for necessary resources to do the job, he understood the program so that was very helpful,” Shaffer said. “You need to hire and train people to go out and do this.”

Calls for action

Many lawmakers, government leaders and others have called for change since Newsday published Long Island Divided, its three-year investigation of real estate practices on Long Island that found evidence of widespread separate and unequal treatment of minority potential homebuyers and minority communities on Long Island.

  • Gov. Andrew M. Cuomo directed three state agencies to launch a joint investigation into housing bias. He also announced a new social media campaign to raise awareness of housing bias, a new housing discrimination hotline where people can file complaints and new state regulations requiring real estate agents to make more disclosures to prospective homebuyers and renters about fair housing laws.
  • Sixteen Democratic members of Congress, including Rep. Kathleen Rice (D-Garden City), called on the U.S. Department of Justice to investigate reports of evidence of housing discrimination uncovered in Newsday’s investigation.
  • Reps. Rice and Tom Suozzi (D-Glen Cove) wrote to U.S. Department of Housing and Urban Development Secretary Ben Carson to investigate evidence of unequal treatment of minority home-seekers on Long Island.
  • State Attorney General Letitia James announced plans to investigate evidence of unequal treatment of minority prospective homebuyers on Long Island as outlined in Newsday’s investigation.
  • Two Long Island Democrats in Albany, State Sen. James Gaughran (D-Huntington) and Assemb. Kimberly Jean-Pierre (D-Babylon), introduced legislation that would expand the state’s authority to suspend or revoke a real estate agent’s license. The state already has the right to suspend a broker’s license for fraudulent practices or misleading advertising, among other causes. The proposed bill would add another cause: “violation of the human rights law,” a reference to the state’s anti-discrimination statute.
  • County executives of Nassau and Suffolk counties, Laura Curran and Steve Bellone, both Democrats, promised stepped-up enforcement of housing discrimination, as well as education and outreach efforts to combat housing discrimination. Two bills were proposed in Nassau County, introduced by Legis. Arnold Drucker (D-Plainview), for example, that would create a staffed telephone hotline and online application for prospective homebuyers to log complaints if they suspect redlining or steering by the real estate industry. The other bill would set a deadline for housing cooperatives to respond to prospective buyers, rather than allowing their applications to languish and potentially disenfranchise certain buyers. A Suffolk County legislative committee voted to create a housing anti-discrimination task force to examine the causes of fair housing violations and to strengthen protections against discrimination.
  • The Long Island Board of Realtors announced it was suspending its fair housing training programs and seeking out independent groups to offer new anti-bias instruction, citing Newsday’s investigation into housing discrimination as a catalyst. It also suspended all instruction by four teachers named in Newsday’s investigation, while it revamps its program.
    Compiled by Olivia Winslow

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