Federal Court Finds Real Estate Brokers Discriminated Against PWA

U.S. District Judge Samuel Conti ruled on December 3 that two New York City realtors, Manhattan Apartments, Inc., and Abba Realty Associates, violated a city law when dealing with a person living with AIDS who was seeking to rent an apartment with financial support from the NYC HIV/AIDS Services Administration (HASA).  The New York Law Journal published the court’s opinion on December 12.

Judge Conti awarded the plaintiff, Keith Short, $20,000 in damages, and also awarded $5,000 to the Fair Housing Justice Center, Inc. (FHJC), the agency to which Short complained about discrimination.  FHJC undertook an investigation of the two realtors, which generated some of the evidence condsidered by the court, and the court granted FHJC’s request for reimbursement for its investigative expenses.  The court also issued expansive injunctive relief against the defendants.

Attorneys Armen Merjian, a senior staff attorney at Housing Works, and Diane Houk of Emery, Celli Brinckerhoff & Abady, represent the plaintiffs.

Short and FHJC contended that the defendants violated the federal Fair Housing Act, which prohibits discrimination by landlords and brokers against persons with disabilities, and the New York City Human Rights Law, which forbids housing discrimination based on disability or on a prospective tenant’s source of income.  Judge Conti ruled for the defendants on the disability discrimination claims, finding that these brokers did not discriminate against clients living with AIDS as such.  Rather, the evidence showed that the discrimination was against people who were seeking apartments that would be financed through housing grants from HASA.  (By definition, all such tenants are people with AIDS, but of course not all people with AIDS seek or obtain HASA funding to pay their rent.)

Short, who was diagnosed HIV-positive in 1989 and soon progressed to symptomatic AIDS, moved to New York from Washington, D.C., in the late summer of 2010.  He applied to HASA for housing support and moved into a single-room-occupancy hotel (SRO) with HASA financial assistance.  He was unsatisfied with the SRO and began looking for an apartment in the fall of 2010. 

He first approached Abba Realty.  Abba has placed many PWA clients receiving HASA funding in apartments, but, as Short discovered, not all the apartments listed by Abba within his price range were available to him.  Abba accepts listings from landlords who will not accept tenants that receive HASA funding.  The court received testimony that HASA funding is reliable, and that delays while HASA inspects and approves apartments are minimal.  Although the court made no finding to this effect, lacking evidence, one might speculate in light of HASA’s dependable payment history that these landlords use HASA funding as a proxy for avoiding taking unemployed PWAs as tenants, but the court doesn’t go there in its opinion.

Abba identified several possible apartments for Short, while telling him that certain apartments (including some in which he was interested) were not available to “program people.”  One apartment became unavailable after Short provisionally accepted it, as the landlord rented to somebody who could pay immediately.  Short accepted a second apartment, but when he showed up to move in he found the condition of the apartment unacceptable due to filth, dead roaches, exposed wires and other problems.  Short claimed that when he summoned the building’s superintendent to complain, the super was hostile to him. So that apartment didn’t work out, either. 

Discouraged by his experience with Abba, Short went to Manhattan Apartments (MA), only to encounter a real stonewall.  He was told that none of the landlords who listed apartments with MA would rent to HASA clients.

After Short took his complaints to FHJC, they employed “testers”, actors trained to pose as prospective tenants, to confirm Short’s story and gather evidence.  Confirmation was easy to get, because the brokers at both companies were very open about not being able to show certain apartments to people who would be paying for them with HASA assistance.  At neither company was there any awareness that the New York City council had passed a law prohibiting housing discrimination against people because of their sources of income, and the individual agents also professed ignorance about housing discrimination laws generally, reflecting the lack of training by these companies.

FHJC argued to the court that the realtors were engaging in disability discrimination because the refusal to show particular apartments due to source of income had a “disparate impact” on people with disabilities.  The court pointed out that plaintiffs making disparate impact arguments are required to provide some statistical proof, and noted that there are a variety of housing support programs, only some of which assist people with disabilities, so it was not a necessary conclusion that people with disabilities are more disadvantaged by such a practice than nondisabled housing assistance recipients.

Since the basis for the federal court having jurisdiction over this case is the federal Fair Housing Act, that could have been the end of the lawsuit.  However, federal courts have “supplementary” jurisdiction over state and local law claims that arise out of the same set of facts, and in this case Judge Conti decided that it made sense to retain jurisdiction and rule on the claim under New York City’s discrimination law.  “Since the parties and the Court have already devoted substantial time, effort, and resources to a four-day bench trial on this matter, declining to exercise jurisdiction and sending the case to state court for additional proceedings would be unfair, inconvenient, and a waste of judicial resources,” he wrote.

While the disability discrimination claim was untenable, the source-of-income discrimination claim was crystal clear.  The testimony by Short and the FHJC testers, as well as testimony by the real estate brokers themselves, provided direct evidence of discrimination against Short because he would be financing his rental with funds from HASA.  The defendants argued that they were merely following the orders of the landlords, and had no intention themselves to discriminate, but the court rejected this argument, pointing out that the realtors engaged in an active function of screening out prospective tenants, thus facilitating the landlords’ discrimination.  Furthermore, there was no direct evidence that the landlords actually discriminated, merely statements by the real estate brokers that they had instructions from the landlords to do so.

Short ultimately did find a satisfactory apartment using another real estate broker, but he sought damages of $50,000 — $25,00 from each defendant — for “lost housing opportunities and for emotional distress caused by Defendants’ discrimination.”  Judge Conti thought that $10,000 per defendant was “a more reasonable award,” noting that throughout the time he was looking for an apartment, HASA was continuing to provide housing at the SRO, so his actual injury was emotional distress due to the substandard living conditions at the SRO and the frustrations of encountering blatant discrimination. 

As to that, Judge Conti pointed out that Abba did make efforts to find an apartment for Short, and that the problems with the last apartment were due to the landlord and the super, not Abba.  However, Abba was found liable for some emotional distress damages because they had declined to show him apartments that he sought due to his funding source.

Perhaps more important than the monetary damages is the injunctive relief against the two realty companies.  The court orders them to stop their practices of facilitating discrimination against people who will fund their rentals through HASA grants or other lawful government housing funds, to adopt written non-discrimination policies, posting and distributing them to their employees and agents, and requiring training of everybody from the realty companies’ owners to the employees to the “independent contractor” agents with whom they do business.  Since MA in particular is a very large rental broker with thousands of listings, this injunctive relief may help to break a logjam for HASA clients conducting apartment searches.

The New York Law Journal reported that the plaintiffs’ attorneys will apply for attorney fees, which are authorized for “prevailing parties” under the NYC Human Rights Law.  Since this case involved lots of investigation and a four day trial, the attorney fee award is likely to dwarf the damages awarded to Mr. Short and FHJC.  Mr. Merjian told the Law Journal that the sum could be “in the hundreds of thousands of dollars.”  A large portion of the fee award would go towards helping to fund Housing Works in its continuing mission of helping people living with HIV secure appropriate housing.  Merjian also stated his belief that this was the first case that had gone to trial since the City adopted the ban on source-of-income discrimination, all previous cases having been resolved through settlements or pretrial dismissals.  The court’s decision sends a warning to the City’s real estate community that discrimination against public housing assistance clients is illegal and will subject them to damages and injunctive relief.

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