In February 2016, Gov. Andrew M. Cuomo invoked Martin Luther King Jr. as he announced a “groundbreaking” drive against discrimination in home sales and rentals.
The governor told an enthusiastic audience at the Convent Avenue Baptist Church in Harlem that the state would sponsor paired testing across New York – a technique that uses undercover investigators – to crack down on real estate agents and landlords who fail to treat white and minority customers equally.
“We’re going to investigate it,” Cuomo vowed. “We’re going to find it. We’re going to ferret it out. We’re going to punish it and we are going to prosecute it because it is illegal.”
Added Cuomo, who formerly served as secretary of the U.S. Department of Housing and Urban Development:
“There will be people who will be unhappy because it’s going to be disruptive to a lot of the big players in the housing industry who like it the way they now have it.”
Three years later, Cuomo’s unprecedented drive as governor – now described by his administration as a “pilot program” – entailed the expenditure of $65,000 and conducted 88 paired tests of upstate and Westchester-area landlords for discrimination in apartment rentals.
The results included a $6,000 fine against a landlord charged with refusing to rent to disabled individuals using emotional support animals; a $15,000 settlement by a landlord charged with refusing to rent to black applicants; and a pending court case against a landlord for allegedly refusing to rent to individuals who use service animals.
Cuomo, who as New York attorney general oversaw 200 tests of real estate industry practices, has not allocated funding for additional testing as governor.
The governor’s enforcement foray illustrates the cost of paired testing investigations, as well as the wide gap between their limited use and the documented prevalence of hidden discrimination.
In a summary of Cuomo’s actions to combat bias in housing, the governor’s office noted that he signed legislation this year banning discrimination based on source of income, such as housing subsidies or child support. In July, he directed the Department of Financial Services to investigate whether Facebook allows housing advertisers to discriminate.
A senior adviser to the governor also said the administration has investigated landlords to deter discrimination on the basis of immigration status and other factors.
“This administration takes housing discrimination very seriously and this Governor has enacted more protections against it than any other governor in history,” Rich Azzopardi, senior adviser to the governor, said in a written statement.
“Every complaint received is thoroughly investigated and we urge any New Yorker who believes they have been the victim of housing discrimination to contact us immediately.”
On paper, real estate agents are subject to investigation and discipline by multiple levels of government. But at each rung on the enforcement ladder, the agencies lack the capacity to use the primary tool for uncovering fair housing law violations by real estate agents.
Surveyed by Newsday, the executive directors of large nonprofit fair housing watchdogs that rely on government funding, including in Detroit, Cleveland, St. Louis, Miami, New Orleans, New York and Houston, unanimously said their budgets are too small to support sustained paired testing of discrimination among residential real estate agents.
Said Rodney H. McRae, executive director of the Nassau County Human Rights Commission, an agency that employs only a five-person staff and is located in one of America’s most segregated suburbs:
“We do not do any testing.”
Although expensive and time-consuming, paired testing is effective. When testing is part of fair housing investigations, cases are seven times more likely to result in a finding of discrimination, according to a 2012 U.S. Department of Housing and Urban Development budget report.
Erin Kemple, executive director of the Connecticut Fair Housing Center, which tests for rental discrimination, said the group generally found bias in as many as six of 10 tests.
“Usually, we show pretty high degrees of steering,” Kemple said.
In rental steering, a landlord with multiple complexes will, for instance, direct African American renters to buildings in black neighborhoods and funnel white customers to complexes in chiefly white neighborhoods, she said.
On the most basic level, the testing process entails recruiting and training testers, dispatching testers to engage with selected landlords or real estate agents, documenting the interactions, assessing the results and, if warranted, filing charges.
Building a case can involve multiple tests, particularly when preparing to accuse a real estate agent of racial or ethnic steering.
In the New York metropolitan area, experts estimate the cost of testing a landlord for rental discrimination at $2,400 per test, while testing a real estate agency for discrimination in home sales can range from $3,000 to $6,000 per test.
The cost of extensive testing is far too high for nonprofit Long Island Housing Services, Nassau and Suffolk’s leading anti-discrimination organization.
Executive director Ian Wilder said more than a decade has passed since the group conducted large-scale testing of agents and landlords, adding that the 19-person agency would need to “double our funding to bring on that kind of staff” to do the work.
Nonprofits like Long Island Housing Services and New York City’s Fair Housing Justice Center investigate 70 percent of housing discrimination complaints in the United States. That’s followed by state agencies at 24 percent and HUD at 5 percent. The federal Department of Justice investigate the small remainder.
In the three decades from 1987 through 2017, HUD filed a total of just 28 cases related to racial steering in all of New York State. Asked through a Freedom of Information Act request for a list of home-sales steering cases brought on Long Island, a HUD representative said there had been none.
Typically, victims of housing discrimination never realize that they were victimized.
Turned away by a landlord who says an apartment has already been rented, a would-be tenant has little hope of knowing whether the story was true. House hunters usually have no way to judge whether a real estate agent is racially or ethnically steering them to neighborhoods deemed suitable for their backgrounds.
“It is rare that we actually get a complaint from someone who thinks they’ve been discriminated against in housing,” Kemple said.
Dawn Lott, executive director of Suffolk’s Human Rights Commission, said housing discrimination represents “a fraction” of the agency’s work. Charged with combating all forms of bias, ranging from discrimination based on age to sexual orientation, Lott’s agency has just a four-member staff.
In Cuomo’s housing discrimination crackdown, the state provided $15,000 to Housing Opportunities Made Equal in Buffalo for 20 paired rental tests; $20,310 to Syracuse-based CNY Fair Housing for 33 tests; and $30,000 to Westchester Residential Opportunities for 35 rental tests.
M. DeAnna Eason, executive director of Housing Opportunities Made Equal, called the one-shot nature of Cuomo’s funding “a real shocker” and said the lack of ongoing funding for testing is “really a disappointment.”
Around the time Cuomo announced the anti-discrimination campaign, his administration made two changes aimed at improving how the state polices real estate agents.
The governor empowered the Department of State to more easily impose discipline such as fines, license suspension and revocation when an agent has been found by a court or agency to have discriminated.
The second change made by the Cuomo administration increases communication between two agencies that handle bias complaints.
Before 2016, two state agencies with different missions worked independently to regulate the real estate industry.
The state Division of Human Rights, whose mission is to enforce the state human rights law, has jurisdiction over investigating discrimination cases. In its 2017-18 fiscal year, housing cases made up 10 percent of its caseload, while employment made up 84 percent. It is headed by Commissioner Angela Fernandez, who was appointed by Cuomo and approved by the legislature earlier this year.
The Department of State, which licenses real estate agents and brokers, holds the power to impose discipline, up to revoking an agent’s license. It is headed by Secretary of State Rossana Rosado, who was appointed by Cuomo and confirmed in 2016.
Starting in 2016, the Division of Human Rights began notifying the Department of State when it receives or resolves a discrimination complaint, so the Department of State can “flag the issue” on the agent’s record, and discipline the agent if warranted, the spokesman said.
Despite the increased communication, the process remains complex.
- Step one: File complaint.
- Step two: Investigation by DHR staff, and possible resolution through a form of mediation.
- Step three: If warranted, DHR finding of probable cause to believe discrimination had taken place.
- Step four: Hearing before administrative law judge or in court.
- Step five: If appropriate, finding of wrongdoing and possible penalties.
- Step six: Referral to Department of State for possible fines, suspension or revocation of real estate agent’s license.
- Step seven: Department of State deliberations over the evidence and degree of possible punishment.
Civil rights attorney Mariann Wang, of the New York City firm of Cuti Hecker Wang, was skeptical that any change would shorten the time between a probable cause finding and agent discipline.
“Given how long Division of Human Rights complaints go, and how long they sit, I have a hard time believing that it’s going to efficiently be conveyed to another agency,” Wang said. “But I hope I’m wrong about that.”
State records show few examples of the state imposing heavy sanctions on real estate agents or brokers who discriminate.
New York has more than 133,000 licensed real estate brokers and agents, including nearly 27,000 on Long Island.
From 2015 through August 2018, the state Department of State reached a final resolution in 504 complaints against real estate agents and brokers, state records show. The overwhelming majority were not about discrimination but about allegations such as failing to complete required continuing education, operating without a proper license or collecting an unearned commission.
The Department of State said it has handled five discrimination cases referred by the Division of Human Rights under the 2016 process.
In one case, the Division of Human Rights reached a 2016 agreement with broker Arthur Zagelbaum of Ben Art Realty Corp., a New Hyde Park-based real estate management company, requiring 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 that testing had shown that the landlord was illegally refusing to rent to people who receive subsidies for people with disabilities.
In a 2017 consent order with the Department of State, the broker, whose company has more than 300 rental apartments on Long Island and in Queens, agreed to pay $1,000 and abide by the terms of the Division of Human Rights settlement.
Ben Art did not respond to requests for comment.
In May, the Department of State imposed a $1,000 fine – the statutory maximum – on an upstate landlord who refused to waive a pet deposit for a service animal. The landlord had reached a 2017 settlement with the Division of Human Rights, agreeing to change its policies and pay $1,300 to the housing advocacy group that brought a complaint.
The Department of State closed two of the five fair housing cases, one because the broker involved died and the other due to lack of evidence. A fifth bias case is pending.
In addition, the Department of State has referred eight discrimination complaints against real estate agents or brokers to the state Division of Human Rights. Two cases were closed when the people who brought the complaints failed to respond or declined to proceed, officials said.
The other six complaints are pending, officials said.
The Department of State spokesman said Secretary of State Rosado declined to be interviewed for this story since “fair housing enforcement is squarely within the purview of the Division of Human Rights, not the Department of State.”
The state Division of Human Rights received 544 housing discrimination complaints in 2017. Of those, 425 – that is, nearly four out of five – were dismissed or discontinued. Of the remaining cases, 97 – less than one in five – were resolved in settlements or after a form of mediation. Two cases resulted in an order favoring the complainant after a public hearing. Twenty cases – 4% – are still pending at the agency or in state court.
The outcome statistics were similar on Long Island. In 2017, the agency received 82 housing discrimination complaints on the Island, of which 64 were dismissed or discontinued, 15 were settled or resolved through a form of mediation, and three are pending in state court.
Over the past two years, the division has brokered settlements that include three separate cases in which Long Island landlords paid amounts ranging from $5,000 to $19,200, as well as a $6,000 settlement with a local condominium and its board, state officials said.
Diane L. Houk, who is of counsel with the law firm Emery Celli Brinckerhoff & Abady LLP, called the Division of Human Rights “woefully underfunded” with “high dockets and low staff.”
Houk said the division’s investigatory work “was very uneven. It really depended on the investigator you were assigned.”
By contrast, she said, a few decades ago the state had its own testing program. For instance, in 1986, after the state received complaints about a Long Island broker, the agency sent one black couple and one white couple to inquire about homes on the same day. The black couple was denied access to homes for sale in Franklin Square and other largely white areas, while the white couple was shown the homes; the Department of State suspended the broker’s license for two months, court records show.
“There’s no reason the burden of regulating an industry should fall on a private individual who’s been discriminated against,” Houk said. Fair housing enforcement, she said, is “a question of the state taking the power it has and implementing it.”
– With Mark Harrington