‘She Wants Well-Qualified People’: 88 Landlords Accused of Housing Bias

The caller was a woman looking to move with her boyfriend into a studio apartment on the Upper East Side of Manhattan, advertised for $1,751 a month. The man who answered, the real estate broker on the listing, said he would be happy to show them the place.

The woman, however, had one last question: Would the landlord accept her federal housing voucher for tenants of lesser means, known as Section 8?

“If she accept what? Oh, no, she would not,” Harris Philip, an independent broker, told the woman, who was actually an undercover investigator for a watchdog group. “She just doesn’t. She wants well-qualified people.”

That exchange, secretly recorded by the group, Housing Rights Initiative, in February 2020 and shared with The Times, is part of a sweeping lawsuit filed on Monday in federal court in Manhattan that accuses 88 brokerage firms and landlords in New York City of discriminating against people with housing vouchers.

The suit recounts dozens of conversations recorded by investigators, who posed as prospective tenants, that detail the extraordinary challenges faced by renters using Section 8, essentially a guaranteed rent check from the federal government that has been a pillar of rental support for many American families.

Enacted in 1978, Section 8 is a $22 billion annual program managed by the federal Department of Housing and Urban Development but administered by local housing authorities. New York City receives the largest share in the country.

In New York, those renters are primarily Black and Latino. More than 125,000 households in the city use Section 8 housing vouchers.

The companies named in the suit include small landlords and brokers, as well as large, national companies, like Compass, the Corcoran Group and a Century 21 franchise office in Manhattan.

For landlords and brokers, participating in the Section 8 program can involve bureaucratic challenges, including having an inspector review and sign off on the health and safety of a unit before it is rented. But those additional steps cannot be used as grounds to deny a Section 8 tenant.

A spokeswoman for the Corcoran Group said that the company was committed to “upholding the principles of the Fair Housing Act,” referring to the 1968 federal law, as well as “offering comprehensive education and training programs for our employees and affiliated sales agents.”

“We take these allegations seriously,” the spokeswoman said.

A spokesman for the Century 21 corporate office declined to discuss the case but said that the company does not tolerate any discrimination. Compass did not respond to a request for comment.

Mr. Philip, the broker for the Upper East Side apartment, said in an interview that he did not recall that conversation last year but new it was illegal in New York to discriminate against someone because of their source of income.

“I would never say anything straightforward like this because I do consider Section 8 qualified,” Mr. Philip said, adding that he had been a broker for 40 years but had never rented to someone with a voucher. “Maybe she rubbed me the wrong way.”

For years, undercover operations have been frequently used to expose potential discrimination in both the rental and homeowner markets. The method is also used by government investigators, including those who target Section 8 discrimination.

The lawsuit raises questions not only about widespread bias against voucher recipients but also about the blatant flouting by agents and property owners of both New York City and New York State laws that prohibit discrimination against people because of their source of income.

Because unused vouchers expire in 120 days without an extension, each rejection is a significant setback in trying to find an apartment, which is already difficult in New York’s expensive rental market.

“Our goal here is simple: It’s to get real estate companies to abandon their discriminatory housing practices and follow the damn law,” said Aaron Carr, the founder and executive director of the Housing Rights Initiative, which started in 2016. “They are the gatekeepers of housing and get to decide where families live, where they work and where children go to school. Housing discrimination goes beyond the walls of housing.”

The lawsuit seeks unspecified monetary damages and for the discriminatory practices to be stopped.

During its yearlong investigation, the Housing Rights Initiative identified apartments across the city that would have been affordable to a renter with a housing voucher. The group built a profile of a prospective tenant, often that of a working-class woman with good credit, and recorded 477 telephone conversations about units found on the listing site StreetEasy.

Many calls lasted several minutes, as the broker or landlord described the unit and asked about the tenant’s background. In 48 percent of those conversations, however, the broker or landlord ended the conversation as soon as the undercover investigator mentioned the voucher — with some even hanging up, according to the suit.

The group heard a range of reasons for a rejection. Some were subtle — “I don’t think this apartment would work for your needs,” a Corcoran broker said about a Manhattan apartment — while many were explicit, stating outright that the vouchers would not be accepted.

Tamaine Hamilton grew up in the foster care system, moved into transitional housing three years ago and has spent that time trying to find an apartment that will accept his Section 8 voucher. He said he has submitted more than 75 apartment applications and has yet to be accepted.

“I’ll never give up because I don’t have the luxury to give up,” Mr. Hamilton, 26, said.

Some of the allegations in the lawsuit mirror findings by the New York City Commission on Human Rights, the agency that investigates claims of income discrimination and that since 2014 has obtained more than $1.2 million in penalties and damages from landlords.

The pandemic has hampered the commission’s work — its income discrimination unit is down to three people after two employees left last year. They cannot be replaced until the city lifts a hiring freeze imposed during the outbreak, a commission spokeswoman said.

“The cases that are filed are a fraction of the discrimination that’s actually experienced,” said Katherine Carroll, an assistant commissioner in its Law Enforcement Bureau.

The New York Attorney General’s office also investigates allegations of income discrimination and has a form for tenants to submit complaints. A spokeswoman said most complaints are resolved with the office sending a cease-and-desist letter to end the discriminatory practices.

The suit accuses brokers and landlords of violating the city’s and state’s income discrimination laws, among the most protective in the country for tenants with housing vouchers.

“Between legal services providers, civil rights law firms and oversight agencies, there aren’t enough people to deal with this widespread issue,” said Robert Desir, an attorney at the Legal Aid Society, which was involved in the lawsuit. “Our hope is that through these lawsuits and publicizing the situation, we can bring people to task, especially owners who have access to a large number of apartments.”

The New York City Housing Authority, the country’s largest Section 8 provider, has a wait list of 36,065 applicants, the agency said. People trying to leave shelters and survivors of domestic violence are given preference.

Section 8 housing recipients typically pay 30 percent of their monthly income toward rent, with the voucher covering the balance of the rent and utilities.

For Nancy Padilla, who spent 20 years living in shelters after leaving an abusive relationship, the excuses and rejections cited in the lawsuit sounded familiar.

After bouncing among shelters, Ms. Padilla finally found an apartment in Queens in 2018 that would accept her Section 8 voucher. But she said she spent hundreds of dollars on nonrefundable apartment application fees, just to be denied when she mentioned the voucher.

“The roller-coaster ride they put me in, I had a mental breakdown,” Ms. Padilla, 58, said. “You are playing with someone’s life.”