Attorney General Letitia James will spend up to $3 million on...

Attorney General Letitia James will spend up to $3 million on the effort. Credit: Newsday / J. Conrad Williams Jr.

The state attorney general is launching a new program that will use undercover testers to determine whether real estate companies and agents treat customers differently depending on their race and related factors.

Attorney General Letitia James will spend up to $3 million on the effort. Grants of up to $250,000 will be awarded to nonprofit groups and local government agencies to provide advice and services to prospective homebuyers as well as to train and pay testers.

The program will include responding to complaints about housing bias, advocating for those who have faced discrimination and enforcement of fair housing laws, according to the public notice last week to nonprofit groups and agencies that may seek the grants.

Ian Wilder of Long Island Housing Services said the attorney general’s effort is much needed, particularly in areas that don’t have nonprofit groups like his dedicated to enforcement of fair housing laws.

WHAT TO KNOW

  • The state attorney general is launching a program that will use undercover testers to determine whether real estate companies and agents treat customers differently depending on their race and related factors.
  • Grants of up to $250,000 will be awarded to nonprofit groups and government agencies to provide services to prospective homebuyers and train and pay testers.
  • The funding will come from new license fees collected from real estate agents under a state law amended in response to Newsday’s 2019 Long Island Divided investigation into housing bias.

“Testing is complicated, as Newsday found out in its three-year investigation,” Wilder said Monday. “That person has to constantly be able to be there to see how the tests are set up. Analyzing afterward requires a great deal of time and resources.”

The funding will come from new license fees collected from real estate agents under a state law amended in response to Newsday’s 2019 Long Island Divided investigation into housing bias on Long Island. Under a state law amended in 2021, the New York Department of State collects a $30 surcharge from real estate brokers and a $10 surcharge from real estate agents when it issues or renews the professionals’ licenses. The surcharges go into the new Anti-Discrimination in Housing Funds.

More than $22,283 of that fund is from penalties assessed to more than 20 real estate professionals who faced disciplinary proceedings for alleged housing discrimination, the state reported. The professionals who paid fines into the fund included two agents named in Newsday’s investigation.

“Discriminating against people because of race is not just shameful — it is illegal,” James said. “Housing is and always will be a human right, and my office will continue to address these pervasive and discriminatory practices statewide.”

The state funding will help create new nonprofit organizations and existing ones like those on Long Island to guide prospective homebuyers, but testing is a key, Wilder said. The funding grants will be for two years, with an optional third year.

“Unless someone has said something explicitly discriminatory, without testing it’s very difficult to bring a complaint,” Wilder said. “That’s why you have to have testing.”

The top priority for the funding is the northeastern part of the state and the Capital Region, which includes Albany. These areas don’t have local nonprofit organizations or government agencies that operate “full service, fair housing programs, " according to the AG's office. Long Island is part of the second priority for the funds along with western and central regions and the Southern Tier. These second-priority areas already have a full-service agency funded by other state and federal funds.

On Long Island, Coldwell Banker, Keller Williams Greater Nassau, Keller Williams Realty, and Laffey Real Estate each settled investigations by the attorney general’s office. Part of that settlement required each company to prominently link to fair housing requirements and a way to report complaints to the state on their websites. Each company’s site carries that link.

Nonprofits or agency that want to participate in the AG's program will soon begin investigating whether real estate companies have complied with fair housing laws. Violations could result in civil action against the companies and agents.

The companies and the Long Island Board of Realtors didn’t respond to requests for comment.

In Newsday’s probe, paired testers used hidden cameras to record their interactions with agents. In 40% of the tests, evidence suggested that brokers 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

Violations of fair housing laws can be reported to the attorney general’s office online at ag.ny.gov/file-complaint/civil-rights.

In February, Gov. Kathy Hochul announced a fair housing testing program that would be operated through the state Division of Homes and Community Renewal. That separate $2.2 million program funds six non-profit organizations statewide to use undercover testers to act as home seekers as well as potential renters. 

The funding is being shared by six organizations who are deploying testers in 48 counties, including Nassau and Suffolk counties, Albany County as well as throughout New York City.

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