New York state has passed nine new laws to combat rampant housing discrimination revealed in a groundbreaking, three-year investigation by Long Island newspaper Newsday two years ago.
The award-winning investigation, “Long Island Divided,” which included 100 agents at 12 of Long Island’s largest brokerages and 25 trained fair housing pair testers, revealed that, in 86 paired tests, Black buyers were discriminated against 49 percent of the time, while Hispanic and Asian buyers were discriminated against 39 percent and 19 percent of the time, respectively. The interactions were videotaped via hidden cameras legally worn by the testers.
Agents at the center of the Newsday report were accused of steering undercover testers to neighborhoods that matched their own race or ethnicity and often subjected minority investigators to more restrictive conditions prior to viewing properties.
For the investigation, Newsday chose 12 brokerages whose listings made up more than half the listings on the market: Douglas Elliman, Century 21 Real Estate, Charles Rutenberg Realty, Coldwell Banker Residential Brokerage on Long Island, Coach Realtors, Daniel Gale Sotheby’s International Realty, Laffey Fine Homes, Keller Williams Realty, The Corcoran Group, Signature Premier Properties, Realty Connect USA and RE/MAX LLC.
Corcoran and Daniel Gale Sotheby’s International Realty were the only brokerages where no discrimination was found.
Last week, Governor Kathy Hochul signed a package of bills designed to address the explicit and implicit bias and discrimination revealed in the Newsday probe. The bills increase fines and fair housing training for agents and require standardized client intake procedures, among other measures.
“For too long, the dream of owning a home has been out of reach for too many New Yorkers because of discrimination and bigotry,” Hochul said in a statement.
“When intrepid investigative journalists uncovered housing discrimination in New York, we took action to end this unacceptable practice. I’m proud to sign strong new laws expanding access to fair housing and allowing more New Yorkers to achieve the American dream of owning their homes.”
In a statement, the New York State Association of Realtors said it was committed to educating its members about the new laws and regulations.
“NYSAR is proud to have worked with state lawmakers over the last two years to strengthen fair housing laws in New York State,” the trade group said.
Raising fines and creating an anti-discrimination fund
One bill, S.945-B/A.6866, creates an Anti-Discrimination in Housing Fund for the Office of the Attorney General to use for grants to government and non-governmental entities specializing in anti-housing discrimination to conduct fair housing testing.
“Discrimination can often happen in subtle manners that aren’t obvious, making fair housing testing important to identifying issues of discrimination,” the governor’s office said in a press release.
The law raises the maximum fine levied against agents and brokers for housing discrimination from $1,000 to $2,000 and sends half of that revenue to the new fund.
“Long Island’s housing market reveals a long ugly history of racism, discrimination, and redlining,” said Senator Jim Gaughran, who sponsored the bill, in a statement. “This legislation will help fund the critical work of identifying and stopping discrimination in the housing marking — by establishing a fund devoted solely to these efforts.”
In a statement, Assemblymember Kimberly Jean-Pierre, who sponsored the legislation in the New York Assembly, said, “It is unconscionable to think that in 2021, prospective homeowners are still facing housing discrimination because of the color of their skin, but here in New York, we are taking strong action to root out this harmful conduct once and for all.
“By toughening penalties against bad actors, funding paired testing efforts, enhancing cultural competency training requirements and providing more resources to homebuyers, we are ensuring that every New Yorker has the right to choose where they want to live and build a better future for their family.”
Adding a surcharge to licensing fees
While only identified malefactors will have to pay anti-discrimination fines, all real estate brokers and agents in New York will now have to monetarily contribute to statewide fair housing efforts due to legislation, S.2133-A/A.5363, that adds a surcharge to licensing and re-licensing fees. Brokers will be required to pay an additional $30 and salespersons will be required to pay an additional $10 that will be deposited into the new Anti-Discrimination in Housing Fund.
“Following Newsday‘s 2019 exposé on housing discrimination, my colleagues and I opened a year-long investigation into predatory practices in real estate,” said Senator James Skoufis, who sponsored the bill, in a statement.
“We held multiple joint hearings, issued twenty-five subpoenas to compel uncooperative Realtors and their firms to testify, and ultimately produced a wide-ranging investigative report with many legislative recommendations to tighten regulation of this often abusive industry. By signing this package of fair housing bills, Governor Hochul is sending a clear message to housing interests across New York that all homebuyers deserve to be treated with dignity and fairness.”
State and local agencies must proactively further fair housing
Another bill, S.1353-A/A.5428-A, requires all state and local housing agencies that receive state funding to “affirmatively further fair housing” and “actively seek to create more diverse, inclusive communities.”
According to the legislature’s summary of the bill, the new law “requires covered housing agencies take meaningful steps that include but are not limited to: identifying and overcoming patterns of segregation, eradicating racially or ethnically concentrated areas of poverty, reducing disparities in access to opportunity, eliminating disproportionate housing needs, providing the public with reasonable and regular opportunities to comment, and encouraging and maintaining compliance with New York’s fair housing law.”
Senator Brian P. Kavanagh, chair of the Housing, Construction and Community Development Committee, sponsored the legislation.
“Communities across New York are still deeply affected by decades of systemic inequality and racism in housing, through redlining, disinvestment, and overt discrimination by those committed to promoting segregation,” he said in a statement.
“While many of the most pernicious practices have long been illegal, it is clear that discriminatory behavior persists and that we have not done nearly enough to affirmatively promote equality, fairness, and integration in housing.”
“We have a lot more to do, but it is my hope that these new laws will help usher in an era of equity and justice for homebuyers and renters, and transparency and accountability in the housing industry, for the benefit of all of our communities,” he added.
More fair housing training for real estate agents and brokers
Another bill, S.2132-B/A.5359, increases required fair housing training for real estate brokers and salespeople, which must now include courses on:
- The legacy of segregation, unequal treatment and historic lack of access to housing opportunities
- Unequal access to amenities and resources on the basis of race, disability and other protected characteristics
- Federal, state and local fair housing laws
- Anti-bias training
“This bill is designed to prevent the unequal treatment of minority homebuyers by increasing overall instructional training as well as instructional training pertaining to fair housing and discrimination in the real estate industry,” the governor’s office said.
Brokers must complete an additional 30 hours of fair housing training on these topics while agents must complete an additional two hours of such training.
Assemblymember Catalina Cruz, who sponsored the bill, noted that homeownership is the main way that families build wealth.
“Removing barriers and outlawing practices that hinder access to buying a home is essential,” she said in a statement. “It is unthinkable that, in the present day, New Yorkers are denied housing opportunities because of these biased and damaging practices.”
Implicit bias training
Because the Newsday investigation and subsequent legislative hearings revealed that many agents and brokers were unaware of their own implicit bias, another bill, S.538-B/S.4638-A, requires an additional two hours of training related to implicit bias for real estate brokers and salespersons as part of their license renewal process.
“Newsday’s ‘Long Island Divided’ investigation series made it very clear that we have a problem on Long Island when it comes to the unequal treatment of minority homebuyers, and better training for real estate professionals must be part of the solution,” said Senator Anna M. Kaplan, who sponsored the legislation, in a statement.
“By training real estate salespeople to understand their own implicit biases, and helping them to rise above them, we can ensure that the American Dream of homeownership is protected for all Long Island families.”
In a statement, Assemblymember Gina L. Sillitti, who sponsored the bill in the Assembly, noted that the two hours of implicit bias training will complement the minimum of three hours of instruction that real estate agents are already required to receive on fair housing and discrimination.
Last month, National Association of Realtors President Charlie Oppler noted that, out of 1.5 million total Realtors, only 30,000 have completed the trade group’s Fairhaven fair housing training and only 28,000 have watched NAR’s implicit bias video, both of which are voluntary.
Training on cultural competency
Another bill, S.979-A/A.844-A, requires real estate broker license qualification curriculum to include coursework on cultural competency and requires an additional two hours of training in comprehensive cultural competency before brokers can renew their licenses.
“Long Island has long been segregated with pockets of wealth and pockets of poverty, and Newsday’s investigation makes clear that certain brokers and salespersons have been engaging in bad faith, discriminatory practices,” the bill’s sponsor memo reads. “This bill will attempt to begin addressing this issue by mandating comprehensive cultural competency training for anyone seeking to obtain a broker license, as well as for those seeking to renew those very same licenses.”
On its website, NYSAR noted that Hochul had approved the bill but had “concerns there is no definition of cultural competency” in the legislation. “The approval memo states that the governor has agreed with the legislature to pass a bill in the next session defining ‘cultural competency’ as well as amending the effective date,” the trade group said.
Standardized client intake procedures for agents and brokers
Some of the discrimination revealed in the Newsday probe included treating prospective homebuyers of color differently by not agreeing to provide show them listings unless they met conditions that the agents did not impose on white testers, such as being preapproved for a mortgage.
One of the new laws, S.2131-A/A.6186, requires real estate brokerages to institute standardized client intake procedures and submit them to the state. It also allows the state to impose a penalty on any real estate broker or salesperson who fails to comply.
Brokers and agents must post the procedures at their offices for inspection by the New York Department of State and the public. Brokers will also be required to post the procedures on their websites and mobile apps, according to NYSAR.
Associate brokers who are office managers must supervise agents
Another bill, S.2157-A/A.6355, is designed to hold brokerages accountable for their agents regardless of whether the agent belongs to an office headed by a principal broker or an office manager. The new law requires associate real estate brokers who serve as office mangers to supervise other associate brokers and agents in their office.
To ensure that office managers are experienced, it also requires that they must have been active in the real estate industry two of the four years before beginning their duties as office manager.
Senator Kevin Thomas, who sponsored the bill, said the legislation “will provide much-needed oversight and accountability measures for real estate brokers, as well as increased penalties for violations of fair housing and human rights laws.”
In a statement, Assemblymember Michaelle C. Solages, who sponsored the legislation in the Assembly, said, “Discrimination in housing has evolved into a more subtle and covert practice that is becoming more difficult enforce. This is partly because of the need for more transparency and accountability in the industry as a whole. To that end, Assembly Bill A.6355 helps to ensure proper oversight over real estate agents irrespective of whether they are working out of a broker’s principal place of business or in a branch office under an office manager.”
A new hotline for housing discrimination complaints
One of the new laws, S.3437-C/A.2300-C, will create a dedicated telephone line for housing discrimination complaints run by New York’s Division of Human Rights in order to make the reporting of incidents more efficient. Real estate licensees will be required to post the hotline number at their offices for the public.
The law also authorizes the Division to conduct housing discrimination hearings and revoke or suspend a real estate license upon the finding of unlawful discrimination.
The Fair Housing Justice Center, which was a consultant for the Newsday story and pushed for the passage of these nine bills, praised the legislators’ work.
“The outrageous behavior exposed by Newsday and by FHJC’s continuing investigations demonstrates how ineffective fair housing laws and enforcement have been,” said FHJC Executive Director Elizabeth Grossman in a statement. “These new laws are the beginning of much-needed change in legislative approaches to the ongoing blight of housing discrimination.”