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New lawsuit accuses 88 landlords, broker firms of bias against renters with vouchers

Close to 90 brokerage firms and landlords are accused of discrimination against NYC renters who rely on Section 8 vouchers to pay their rent.

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Undercover investigators secretly recorded dozens of brokers and landlords in New York City discriminating against renters with housing vouchers. Their findings prompted a new lawsuit filed in federal court today against 88 brokerage firms and landlords that accuses them of turning away renters who rely on Section 8 vouchers to subsidize their rent.

Housing Rights Initiative, a tenant watchdog group, spearheaded the investigation—which took place over the past year and involved hundreds of phone calls to brokers and landlords about apartments found on StreetEasy. The units would have been affordable to renters getting federal assistance, but in nearly half of all cases, when the undercover investigators mentioned the use of housing vouchers, the brokers refused to rent to them. Conversations were abruptly ended—some brokers would just hang up when vouchers were brought up, the lawsuit claims.

Section 8 is a federal program that provides a guaranteed rent check for those who need it. Since 2008, it has been illegal to discriminate against a prospective tenant's source of income in a building with six or more units. As of February 15th, source of income protections were expanded to cover apartments in buildings of any size. It is also illegal for landlords or brokers to express a preference for non-voucher holders or publish anything indicating they'd refuse to accept renters who receive housing assistance.

Among the companies named in the lawsuit are Compass, the Corcoran Group, and a Century 21 franchise office in Manhattan.

Aaron Carr, founder and executive director of the Housing Rights Initiative, says the housing discrimination uncovered was most prevalent in higher-income white neighborhoods. He spoke at a Monday morning press conference announcing the landmark suit.

"The average median income of neighborhoods where we found the discrimination was over $90,000 a year and the average demographic makeup was over 50 percent white," he says. He points out 82 percent of New Yorkers with housing choice vouchers are Black and Hispanic so "when you discriminate against tenants with rental assistance you discriminate against tenants of color."

Another issue is that housing vouchers expire after a certain amount of time, so housing discrimination prolongs economic hardship. "Families that are unable to use their housing vouchers have to spend the majority of their income on rent and the more one spends on rent, the less one spends on food," Carr says.

For 15 years, Nancy Padilla says brokers and landlords turned down her apartment applications even though she was qualified and passed the background and credit checks. She found herself trapped in the shelter system and hopes this lawsuit will prevent others going through what she did. "No one should feel as if someone has you as a puppet and they are holding the strings—justice needs to be heard and seen," she says. 

The findings—as well as the blatant nature of the discrimination—raises questions about how NYC's fair housing laws are enforced. Carr is hoping the lawsuit creates the political will to bring about change. "We need to fully fund our fair housing agencies and they need to systematically and proactively enforce our fair housing laws," he says.  

The New York Attorney General's office investigates housing discrimination allegations and has a form to submit if you think you've been unfairly treated. The New York Times reports a spokeswoman for the office saying a cease-and-desist letter is typically an effective deterrent against continued discriminatory practices.