The governor's action was sparked by a Newsday investigation that...

The governor's action was sparked by a Newsday investigation that found widespread evidence of unequal treatment of minority homebuyers. Credit: Newsday/John Keating

Sparked by a Newsday investigation, Gov. Andrew M. Cuomo on Thursday said the state will launch an initiative to deploy undercover homebuyers to test whether real estate agents are "steering" customers to or away from certain neighborhoods based on race.

The action is triggered by "Long Island Divided," a Newsday investigation that found evidence of widespread unequal treatment of minority homebuyers. The newspaper used undercover "testers" carrying hidden microphones and cameras to record interactions with more than 80 real estate agents.

The governor said the administration will pursue a similar approach. The state will earmark $250,000 and team with nonprofit housing agencies to dispatch trained fair housing testers to act as potential renters or home seekers to uncover unlawful discriminatory treatment by sellers, brokers and landlords.

The testing will occur on Long Island, as well as New York City and Westchester County, and the Buffalo and Syracuse areas, officials said.

Cuomo also announced new regulations that will become effective March 17, requiring real estate appraisers to take more training on fair housing and fair lending practices.

"New York's prohibition of discrimination in home rental and sale transactions isn't just a suggestion — it's the law — and any unscrupulous agents who break that law must be held accountable," Cuomo said in a statement. "These new actions build on our ongoing efforts to stop illegal housing practices by finding those bad actors who are subjecting potential renters and buyers to discrimination and putting them on notice, while also making sure real estate appraisers receive the proper training to make fair and unbiased decisions."

The governor’s administrative initiative is just one track New York lawmakers are pursuing on the issue.

Earlier this month, the State Senate approved a bill that would empower the attorney general’s office to deploy undercover testers regularly to determine if fair housing laws are being followed. It also approved a companion measure that would hike biannual license fees for agents and brokers to pay for the testing.

Both bills now await action in the state Assembly. If approved, legislators said enshrining the testing program in state statutes would be permanent and more effective than a governor’s directive.

The flurry of legislative activity was spurred by Newsday’s investigation, published in 2019. Over three years, the newspaper used testers in areas running from the New York City line to the Hamptons and from Long Island Sound to the South Shore.

The findings included evidence that some agents directed minority potential homebuyers toward neighborhoods based on race and that agents sometimes required preapproved mortgages from Black or Hispanic customers but not white ones.

In 40% of the tests, evidence suggested brokers subjected minorities to disparate treatment compared with whites. Black testers experienced disparate treatment 49% of the time, Hispanics 39% and Asians 19%.

Testing carried out by the Cuomo administration won't begin immediately because it needs to first reach contracts with nonprofit agencies to conduct it.

"Once contracts are finalized, the nonprofit housing agencies will dispatch trained fair housing 'testers' to act as potential renters or home seekers to uncover unlawful discriminatory treatment by sellers, brokers and landlords," Brian Butry, spokesman for Cuomo's Division of Housing and Community Renewal, said in an email.

The housing agency will use its own existing funds for the program, Butry added, meaning it won't depend on new funding approved by the State Legislature.

One of the nonprofits that will help carry out the testing applauded Cuomo’s plan.

"This is great news, and much needed," said Ian S. Wilder, executive director of Long Island Housing Services. "We are grateful for the additional opportunities this programs represents."

Nassau County Executive Laura Curran also applauded the initiative and the Newsday series.

"Nassau County has stepped up our fight against housing discrimination in the past year by beefing up enforcement tools, increasing public engagement, and working with Long Island Board of Realtors directly to educate real estate agents," Curran said in a statement. "Governor Cuomo’s announcement represents a big step forward in Long Island’s fight against discriminatory housing practices, and credit is due to Newsday for pushing government to act with the Long Island Divided Investigation. Good journalism matters."

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