Source of income discrimination constitutes the most common form of illegal housing bias in NYC. Yet the city has only a handful of attorneys and staffers at the two agencies dedicated to tackling the monumental problem.
Tammie Davis set alerts on five real estate apps to find out whenever a Brooklyn apartment in her price range went on the market. She filled a notebook with the hundreds of homes she inquired about or visited over the past couple years, ever since her Canarsie landlord sought to evict her in 2019.
Still, she says, she couldn’t find someone willing to accept her Section 8 subsidy, a federal program that guarantees consistent, market-rate rent for property owners. The landlords and brokers she contacted — even a man she worked with years ago — kept putting her off or outright denying her when they learned she had Section 8.
“I had one guy, I actually knew him, and he told me ‘I don’t deal with those programs.’ He says ‘Landlords don’t want any programs,’” Davis says. “I’d say ‘That’s against the law,’ and they’d stop answering the phone.”
The ubiquitous practice, known as source of income discrimination, constitutes the most common form of illegal housing bias in New York City, according to annual reports. The hundreds of complaints filed with city agencies are “a drop in the bucket” compared to the true extent of the issue, says New York City Commission on Human Rights (CCHR) Assistant Commissioner Katherine Carroll.
Yet the city has only a handful of attorneys and staffers at the two agencies dedicated to tackling the monumental problem: the Human Resources Administration (HRA) and CCHR.
Last year, nine staff members in HRA’s Fair Housing Litigation Unit fielded 482 total complaints, including 213 for source of income discrimination. Three officials in CCHR’s Source of Income and Early Intervention Units — two lawyers and an investigator — received 493 such complaints during the last fiscal year, which ended June 30, 2020. Two years ago, the CCHR unit had twice as many staff members working on cases — still not enough, advocates said at the time.
The “hollowed out” enforcement teams work hard but barely scratch the surface of the problem, says Annie Carforo, a campaign manager with the housing rights organization Neighbors Together. She and other advocates have urged the city to direct more money to bolster source of income discrimination enforcement in the next budget, which needs to be passed by July 1.
“There are tens of thousands of voucher holders in this city and each and every one is guaranteed to be discriminated against every day, probably multiple times a day,” says Carforo, who has made dozens of source of income discrimination referrals to the city and worked with CCHR on Know Your Rights trainings. “Back in 2018, we were fighting to double the size of the unit because we had an effective model. And now they’re down to half the team, maybe.”
Aaron Carr, the founder and executive director of the group Housing Rights Initiative (HRI), called the paltry staffing numbers “patently insane.” His organization has led major investigations into source of income discrimination and filed lawsuits on behalf of New Yorkers denied housing — the same sorts of cases he says the city should take on.
“New York City has the largest rental market in America for crying out loud,” he says. “The city needs to properly fund the NYCCHR and fair housing non-profits to proactively, systematically, and routinely uproot this terrible scourge of housing discrimination. Laws without enforcement are hollow shells.”
The next city budget should enable both agencies to beef up their anti-discrimination legal teams, especially after a recent hiring freeze eroded the workforce. How the larger teams should approach enforcement is still an open question.
Bigger cases, bigger impact
Bronx real estate broker Janette Melvin was quick to respond when she received a text inquiring about a $1,300 a month one-bedroom apartment on Unionport Road. She learned the prospective renter earned $56,000 and promptly offered to set up a viewing.
The same day, Melvin got another inquiry about the same apartment, this time a phone call from a person saying they had a housing voucher to cover the rent. Melvin told the caller the apartment did not qualify for vouchers. Why not, the caller asked.
“It’s um violations,” Melvin responded, according to a lawsuit filed in Manhattan Supreme Court May 6.
The callers were investigators, known as testers, from the HRA’s source of income discrimination unit building a case against Melvin’s employer BruMa Realty. The testers uncovered a pattern of BruMa brokers ignoring or misleading voucher holders even as they showed apartments to people paying rent without vouchers, the complaint states.
It’s the fourth lawsuit filed following an investigation by HRA testers and attorneys, and it’s the kind of litigation advocates have urged the city to pursue more often.
Instead, HRA and CCHR tend to focus on rapid intervention. If a voucher holder calls to complain about a landlord or broker who has illegally discriminated against them, HRA and CCHR staff will alert the offender that they just did something illegal and instruct them to rent out the unit or risk a penalty.
Advocates say that strategy can be effective for getting individuals housed but fails to address the deeper, systemic problem. Major fines and lawsuits are the best way to punish offenders, especially major landlords, while proving there are real financial consequences to discrimination, says Housing Works Supervising Staff Attorney Armen Merjian.
“A landlord’s impunity is not altered if they are merely compelled to rent an apartment,” Merjian says. “I believe reform happens not merely with passing a law, but with rigorously enforcing it — suing every time there is a case of discrimination and seeking full penalties and full damages in order to dissuade discriminators from discriminating.”
The large lawsuits can also generate headlines and demonstrate to New Yorkers just how pervasive the source of income discrimination really is.
In March, for example, HRI and the Legal Aid Society filed a federal complaint accusing 88 landlords and brokers, including big-name firms like Corcoran Group and Compass Inc., of systematically denying housing to Section 8 voucher holders.
“They do so in violation of local, state, and federal law, even as New York City faces a housing crisis and the ravages of a global pandemic,” the complaint filed in Manhattan federal court states.
The lawsuit was the culmination of a year-long probe in which investigators posed as voucher holders and recorded nearly 500 phone calls with brokers and managers. In about 48 percent of those calls, the housing gatekeepers ended the conversation or failed to follow up when the tester mentioned their voucher.
Carr says the city should invest its time and resources in similar cases — especially since source of income discrimination is used as a proxy for racial and ethnic discrimination. About 82 percent of New Yorkers with Section 8 vouchers are Black or Latino, the lawsuit states.
“Over the course of just one year, our organization has uncovered almost 250 fair housing violations,” Carr says. “We are a small, underfunded, and under-resourced fair housing organization. Whatever we can do, New York City — which has the largest municipal budget in America — can do better, if, of course, it had the political will to do anything at all.”
Big cases, however, demand big teams of lawyers, investigators and other staff members to counter the influence of wealthy real estate players who can pay mighty law firms stocked with plenty of investigators, paralegals and attorneys on call. That’s just what the LeFrak Organization did in 2013 when Merjian and the Fair Housing Justice Center sued them for refusing to rent to people with HIV/AIDS Services Administration (HASA) vouchers. LeFrak hired former Deputy Mayor Randy Mastro from the white-shoe law firm Gibson Dunn to fight the case.
The city won’t match the unlimited funds of billion-dollar real estate firms, but recent budget proposals will boost the number of people investigating and charging source of income discrimination complaints.
CCHR will hire up to three new staffers for its Source of Income Unit, the agency says. In a response to the mayor’s executive budget, the City Council urged the administration to fund five new hires at a cost of $350,000 per year.
“Those units need more staffing, they always need more staffing,” says Councilmember Stephen Levin, chair of the general welfare committee. “Their work is incredibly labor intensive.”
The mayor’s executive budget also includes funding for 10 new staffers in HRA’s Fair Housing Litigation Unit, more than double the current number, says Department of Social Services Commissioner Steven Banks.
“The additional funding gives us the opportunity to bring bigger cases,” says Banks, who oversees HRA. “We’re being given more resources to step up the effort and bring enforcement actions which are clearly needed to stamp out this pernicious practice that has gone on for years and years and years.”
Priority on housing
The prospect of a hefty fine or legal judgement can be a compelling lever, but those kinds of cases take years to fight. In the short-term, New Yorkers who are homeless or on the brink of eviction need apartments immediately, city officials say.
HRA and CCHR have thus prioritized early interventions that can secure an apartment for a tenant who experienced source of income discrimination.
“We can make clear to landlords that we will come after you and sue you and make you stop,” Banks says. “But if we can turn a ‘no’ into a ‘yes’ we should do that.”
A staffer in CCHR’s Source of Income Unit — the only one who isn’t an attorney — handles those “pre-complaint intervention” cases by contacting the offending landlord or broker as soon as a prospective renter lodges a complaint.
During the 2020 fiscal year, CCHR resolved 177 pre-complaint interventions by securing an apartment for a person who was turned away as a result of source of income discrimination, according to agency statistics.
“If there’s reason to believe their apartment may be open, the staff member works to get someone in the apartment as fast as possible,” Carroll says.
CCHR has also worked with landlords accused of turning away voucher holders but who are unable to afford steep fines. In exchange for reducing or eliminating their financial penalty, some landlords have agreed to reserve a portion of their units for people with housing vouchers.
“There are landlords and brokers with credible claims of financial hardship when we’re settling cases. We have to take into consideration that the pandemic did hit that industry particularly hard,” Carroll says. “We try to use a stick and a carrot approach to eradicate it going forward.”
The set-aside policy has resulted in landlords renting out about 75 units to people with housing vouchers, the agency says.
“It’s a form of restorative justice,” says CCHR spokesperson Alicia McCauley. “What’s going to help the community and create more opportunities for voucher holders? Giving the landlord a bigger fine or reducing that fine and giving the community more units for voucher holders?”
CCHR filed 47 claims of source of income discrimination in administrative court last fiscal year and assessed nearly $1 million in civil penalties, with judges ordering about $6.5 million in damages to tenants. Both sums marked an increase from previous years.
Carforo, of Neighbors Together, says those enforcement initiatives can be effective — so long as there are enough people to handle the crush of complaints.
“It really worked when they had funding,” Carforo says. “It was one of the best efforts I’ve seen to get people out of shelter and into housing, but now it’s one person.”
Cracking down on bad actors
Ever since the city enacted a law making source of income discrimination illegal in 2008, the two city agencies tasked with investigating and enforcing it have been constrained in what they can achieve.
The city first failed to allocate a significant amount of money for enforcement, defanging the new law. The state only added source of income discrimination to its Human Rights Law in 2019.
Bureaucratic considerations can also impede enforcement: CCHR must bring cases in administrative court, rather than state supreme court. HRA, meanwhile, lacked the power to take landlords or brokers to court without permission from the Law Department.
Only in 2018 did the city begin suing some discriminatory landlords and brokers for source of income discrimination. HRA and the Law Department have filed four complaints on behalf of the city, rather than individual renters, including the case against Bronx-based BruMa Realty earlier this month.
The city settled the first two cases with real estate firms last year. According to the terms, the companies must adopt an anti-discrimination policy drafted by the city’s Fair Housing Litigation Unit and must allow HRA officials to inspect company records.
In a third case, filed in 2019, the city took on management companies and a broker at the large Parkview Apartments complex in Staten Island. City attorneys accused the firms, Samson Management, 700 Victory Boulevard LLC and Neuhaus Realty Inc., as well as the broker, Lily Liu, of ignoring requests from voucher holders while following up with renters who didn’t have vouchers. HRA investigators built their case by posing as prospective renters with and without vouchers and documenting the broker’s responses.
Liu’s attorney Justin Kelton says Liu “vigorously denies any accusation of wrongdoing and looks forward to her day in court.” The companies charged in the two lawsuits did not respond to requests for comment.
The Staten Island and Bronx cases are pending, but the alleged offenses illustrate the most common form of source of income discrimination, says Steph Rudolph, the former head of CCHR’s Source of Income Unit.
“Ghosting is the new frontier of discrimination,” Rudolph says.
Most landlords and brokers know better now and have stopped explicitly writing notes like “no vouchers” or “no programs” on their Craigslist ads, Rudolph says. Fewer and fewer are saying it during phone calls.
“Ghosting” is harder to prove than an explicit denial written on an apartment listing, which city officials can find by combing online posts. Demonstrating that brokers or landlords ignore voucher holders demands a consistent testing program, something advocates want the city to expand.
“That requires more intensive investigation to root out, and that goes back to the lack of resources,” says Legal Aid staff attorney Robert Desir.
Davis, the Canarsie tenant struggling to find a landlord who will accept her Section 8 voucher, says the broker who told her “no programs” was the rare example of an outright denial. She says most agents simply stop returning her calls, or they put off showing her an apartment before telling her they rented it to someone else.
She says she finally asked a friend to serve as an informal tester after a broker delayed showing her an apartment in Brooklyn. The friend said she didn’t have a voucher and was able to book a viewing immediately.
“There’s a stigma attached with Section 8, that you’re low-life, low-class, the worst people in the world and you’ll tear your place up,” Davis says. “I’ve heard horror stories, but I’ve heard horror stories about people who work and pay cash too.”
Davis says she expected landlords would welcome vouchers, particularly Section 8, because they provide a guaranteed monthly payment as tenants across the city struggle to make rent during COVID crisis.
“I thought, ‘Yeah, this will get easier because a lot of people aren’t working and unemployment is not enough to pay rent,” Davis says. “But that’s not the case.”