Oyster Bay spent nearly $3M over a decade defending fair-housing lawsuits

Oyster Bay has spent nearly $2.8 million defending state and federal lawsuits that, over a decade ago, claimed a pair of town housing programs discriminated against minorities, records show.

The cases, settled earlier this year, alleged the programs — one for seniors and another for first-time homebuyers — violated state and federal statutes. The policies, the lawsuits argued, gave housing priority to residents of Oyster Bay, where the population is 70% white.

Earlier this year, the all-Republican town board authorized settlements with the state and federal governments in which it dropped the residency preference for the first-time homebuyer program but maintained it for the senior one.

The state and federal settlements require town officials to attend two hours of fair housing training every year for three years. The federal settlement also bars the town from establishing new residency preferences for any housing programs "unless it first determines that the preference does not discriminate against any group based on race, color, national origin, or sex."

The town paid $1.8 million to Covington & Burling, a Washington, D.C., law firm, between March 2014 through the end of July 2020. From late February 2020 to last February, the town paid $952,000 to Carle Place-based law firm Sokoloff Stern, the records show. The firms billed the towns $525 per hour and $225 per hour, respectively, for the legal work. 

Oyster Bay spending on outside law firms

The town paid two firms as it spent more than a decade fighting a pair of housing bias lawsuits.

The total spending on outside counsel was nearly $2.8 million

Newsday analyzed the spending totals using records obtained through the state's Freedom of Information Law.

Advocates immediately criticized the settlements as lackluster, citing what they described as an initially forceful bid to curb housing discrimination on Long Island.

The town's legal expense "could have certainly been better spent than using it to deny housing," said Elaine Gross, president emerita of the Syosset-based civil rights organization ERASE Racism. "It is a sad commentary, in general, for Long Islanders that this is not unusual."

The settlements come as federal agencies retreat from enforcing civil rights cases that rely on disparate-impact liability, or analysis, a key legal doctrine that has been used to enforce fair housing laws in the past.

In April last year, President Donald Trump issued an executive order to "deprioritize enforcement" of cases that rely on disparate-impact liability. Disparate-impact claims challenge policies that discriminate against or harm an individual class or group, even if the policy wasn't intended to.

The Town of Oyster Bay did not respond to a request for comment about the spending on outside law firms. The cases never went to trial.

The town's outside attorney said the legal fees were justified and that the state and federal claims were meritless.

"It's a case that never should have been filed," said Brian S. Sokoloff, partner of Sokoloff Stern. "The town didn't ask for it. The town had to defend itself."

Covington & Burling representatives did not respond to a request for comment.

Law firm: Covington & Burling 

Time frame: March 2014 through July 2020

Total: $1.8 million

Billing rate: $525 per hour

Feds shift focus

Oyster Bay's Golden Age program was established in 1993 and allows individuals 62 and older to buy co-ops where the town has carved out exceptions for denser development. The program includes 1,476 units in Bethpage, Woodbury and Massapequa, town officials have said. The town maintains a waitlist of 883 individuals for new openings, said Marta Kane, a town spokeswoman. 

The Next Generation program, aimed at attracting first-time homebuyers, opened in 2004. It includes 56 units in two developments: The Seasons at Plainview and The Seasons at Massapequa. Town residents, and their relatives, held priority until the settlement was executed.

The U.S. Justice Department sued the town in 2014, alleging that both programs violated the Fair Housing Act. That landmark 1968 legislation, signed by President Lyndon B. Johnson, prevents municipalities from using discriminatory practices to restrict housing based on race, religion and other criteria.

When the federal government sued in 2014, under the Obama administration, its lawyers said the town's residency preferences "illegally discriminate against African-Americans." 

"The town is predominantly white, and very few African American residents are eligible for these housing programs," the Justice Department's complaint stated.

The New York Division of Human Rights filed its own lawsuit in 2015, alleging the programs violated the state’s Human Rights Law. The residency preferences, the agency's lawyers wrote in their complaint, "perpetuate segregation" in the town "by effectively restricting the sale" of housing "to existing residents of the Town of Oyster Bay and their children."

According to U.S. Census estimates last year, Oyster Bay’s population is about 70% white and 2% Black. 

When asked for comment, the White House press office pointed Newsday toward a web page about the policy shift.

It criticizes the use of disparate impact-claims, noting the "theory violates the Constitution’s guarantee of equal treatment for all by requiring race-oriented policies and practices to rebalance outcomes along racial lines."

The April 2025 executive order "directs the administration to assess all pending investigations, lawsuits, and consent judgments that rely on a theory of disparate-impact liability, and take appropriate action," according to the White House page.

Law firm: Sokoloff Stern

Time frame: February 2020 to February 2026

Total: $952,047

Billing rate: $225 per hour

Why the state settled

Christian Vitek, a spokesman for the state Division of Human Rights, said in an emailed statement the office filed its lawsuit "to address what the agency believed to be harmful discriminatory housing practices" across Oyster Bay.

The settlement, Vitek wrote, "secured important policy changes to eliminate unfair barriers to housing in Oyster Bay while advancing fair housing on Long Island."

The agency did not address why it ended its challenge to the Golden Age program.

The settlement elicited disappointment among housing advocates and civil rights experts.

"Given that the government invested heavily in bringing this case, it really feels like a waste that they would enter into a settlement that leaves one of these policies in place," said Brook Hill, director of the Fair Housing & Community Development Project, at the Lawyers’ Committee for Civil Rights Under Law.

Other agencies, including the U.S. Department of Education, have stopped pursuing cases that rely on whether a policy had an inadvertently adverse impact on a particular group. Earlier this month, the Federal Trade Commission said it too was "ditching" disparate-impact investigations.

A number of lawsuits on Long Island have prompted municipalities, among them Garden City, Farmingdale and Nassau County, to amend their housing policies.

Matinecock Court, a $92 million affordable housing development, opened late last year in East Northport — nearly five decades after it was first proposed. The Huntington chapter of the NAACP had sued, arguing the town's zoning code wrongfully barred multifamily housing. A Supreme Court ruling affirmed a lower-court ruling that claimed the policy "significantly perpetuated segregation in the Town."