How to Prevent Housing Discrimination Claims Based on Race or Color

The New York City Commission on Human Rights recently announced the launch of its new “While Black” ad campaign to combat racial discrimination. According to Carmelyn P. Malalis, chairwoman and commissioner of the organization, the ad campaign is an effort to encourage more people to report instances of discrimination against them. “One of the reasons that in this campaign we focus on basic everyday activities—shopping, walking, working, renting, driving—is that it speaks to everyday forms of discrimination that people experience—probably with such regularity that they think, ‘Why should I report it? Who is going to care?'"

The campaign acknowledges and affirms the rights of all black New Yorkers to live their lives free of bias. It also provides information on how to report discrimination to the Commission on Human Rights. The campaign ads, which will run digitally and have 1,000 placements around the city, target anyone who identifies as black, including African American, Afro-Latinx, and African New Yorkers, as well as entities that have responsibilities, and potential liability, under the law, including housing providers, employers, employment agencies, and business owners.

During Fiscal Year 2018, the commission received 584 race-based complaints and 191 based on color, as well as an overall 20 percent increase in complaints since 2016. Of the 584 race-based complaints received, 279 were employment complaints, 144 were housing complaints, and another 144 were public accommodations complaints.

At the federal level, the Fair Housing Act (FHA) prohibits discrimination in housing because of race, color, religion, sex, national origin, familial status, or disability. New Yorkers also have protections at the city level with the NYC Human Rights Law (HRL), which prohibits discrimination in private and public housing, land, and commercial spaces in New York City. This means that any person selling, renting, or leasing—including owners, superintendents, building managers, brokers, and realtors—cannot discriminate because of a person’s actual or perceived protected status under the law.

Both the FHA and the HRL ban discrimination based on both race and color, two separate but closely related characteristics. Race generally refers to a person’s physical appearance, while color refers to a characteristic of a person’s race. The laws list both race and color to cast a broad net to protect people from discrimination, whether they’re black, Hispanic, Asian, South Asian, Middle Eastern, or from other racial or ethnic groups.

The commission’s ad campaign is likely to draw increased attention to the problem of housing discrimination based on race or color in New York City and, as a result, may cause a rise in race-based complaints. Therefore, it’s important for owners to know how to prevent such discrimination claims. Keep the following rules in mind when dealing with tenants and prospects to prevent discrimination claims based on race or color.

Rule #1: Keep Race Out of the Leasing Process

Don’t allow race to play any part in decisions about who may live in your building. The FHA and HRL bans refusing to rent or making housing unavailable to anyone based on his race—or that of his household members or anyone associated with them. It’s also unlawful to provide inaccurate or untrue information about the availability of units for discriminatory reasons, so you may not deny a visit to the rental property by telling a prospect that an available unit has been rented already, or limit information about suitably or comparably priced available units, because of his race or other protected characteristic.

Fair housing organizations send out testers to check for subtle signs of race discrimination—such as any inkling that prospects are being given incorrect information about unit availability—or are being quoted higher rent charges or less favorable rental terms—based on their race.

For example, in June 2017, the owners and operators of a 60-unit building in Brooklyn agreed to pay $107,500 to resolve a fair housing case alleging discrimination against African-American prospects on the basis of race. The complaint, filed by the Fair Housing Justice Center, alleged that its five-month testing investigation revealed that white testers were told about and shown available apartments, but African-American testers were repeatedly given inaccurate information about apartment availabilities, quoted higher rents, and steered to other buildings. The defendants denied the allegations, but agreed to a four-year settlement that includes adoption of a fair housing policy, fair housing training, and recordkeeping requirements.

In another case, in February 2016, the owners and managers of a building on Long Island, N.Y., agreed to pay $230,000 to settle allegations of race discrimination based on the results of fair housing testing, which allegedly showed marked significant discrepancies between the ways that African-American and white testers, posing as prospects, were treated. The complaint alleged that a manager discouraged African Americans from renting at the building by misrepresenting the availability of units, not showing available units, or misrepresenting the dates when units were available to rent. The owners and managers denied the allegations.

Rule #2: Apply Uniform Qualification Standards, Regardless of Race

The FHA and HRL bars unequal treatment in the application process, for example, by using different rental procedures or screening criteria—such as income standards, application requirements, application fees, credit analysis, rental approval procedures, or other requirements—because of race or other protected characteristic, according to HUD regulations.

For example, imposing more onerous application requirements on an applicant based on race would violate the law. To ward off discrimination claims, adopt racially neutral policies, procedures, and qualification standards for leasing units in the building. Be sure to keep good records to show that you followed the policies consistently and fairly, without regard to the applicant’s race, color, or any other protected characteristic.

Rule #3: Beware of Unlawful Steering

When showing available units in your building, refrain from any comments or conduct that suggests a prospect should—or shouldn’t—live in a particular area or floor within your building—because of her race or color. It’s considered “steering,” an unlawful practice under the FHA, if you direct, guide, or encourage prospects, based on an illegally discriminatory reason, to rent only certain units at a building or to seek alternate living options.

Fair housing law outlaws even subtle hints that a prospect should go elsewhere or live in a certain section of your building because of her race or color—or any other protected characteristic. HUD’s Office of Fair Housing and Equal Opportunity enforces the FHA and investigates fair housing complaints. As such, under HUD regulations, examples of unlawful steering include:

• Discouraging prospects from renting a unit because of a protected characteristic of the prospect or the people living in the building;
• Exaggerating drawbacks or failing to inform any person about desirable features of a unit or the building because of a protected characteristic;
• Telling the prospect that he wouldn’t be comfortable or compatible with existing residents of the building because of a protected characteristic; or
• Assigning applicants to a particular section or floor of a building because of a protected characteristic.

To avoid fair housing trouble, you must let prospects make their own decisions about where to live after you’ve shown them all available units that meet their needs, regardless of who lives in that part of the building.

Rule #4: Reject Applications for Valid, Nondiscriminatory Reasons

You have the right to reject an application that doesn’t meet your screening criteria, even if the prospect is a member of a protected class. If your screening criteria are reasonable and you apply them consistently, then you may reject prospects—regardless of race or color—who don’t meet those criteria without getting into fair housing trouble.

Failure to apply screening criteria consistently is a sure way to trigger a fair housing complaint. If your resident selection plan requires you to run credit checks on all prospects, don’t overlook those checks for some prospects because you know the applicant or you think you have enough information to make a decision without it.

If you’re accused of race discrimination, you’ll have to demonstrate a legitimate, nondiscriminatory reason for denying the application. Be sure to follow your standard practices and keep good records, so you’ll have the proof you need to counter any accusations that your explanation was merely an excuse to cover up race discrimination.

Rule #5: Update Your Criminal Background Policy

Criminal background checks are the latest battleground for potential race discrimination claims. If it’s been a while since you last reviewed your policy, it’s important to check to make sure your policy doesn’t run afoul of HUD’s guidelines addressing the discriminatory effect that criminal background policies may have on racial and ethnic minorities.

HUD has issued guidance on how federal fair housing law applies to the use of criminal records in both conventional and assisted housing communities. HUD cited statistics showing that African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites with respect to their share of the general population. The HUD guidance doesn’t prevent you from screening applicants based on their criminal history, but you could face liability under fair housing law if their criminal history policy, without justification, has a disparate impact—or discriminatory effect—on minority applicants.

One high-profile case the NYC Commission on Human Rights settled last year involved a prospective tenant stating that she was denied an apartment by the owner because of her criminal history. The tenant stated that the owner relied on a criminal background report containing several mistakes and refused to consider her evidence that she had not been convicted of the charges on the report. The commission’s law enforcement bureau (LEB) conducted an investigation into the owner’s tenant selection procedures and determined that the owner denied up to 10 other individuals in a three-year period based on convictions appearing in background reports that were either minor, nondescript as to the underlying charges, or appeared to belong to different individuals. LEB filed a Commission-initiated complaint alleging that the owner had a policy of denying applicants based on criminal history that wasn’t related to business need, and that the criminal history policy had a discriminatory effect on black and latinx applicants. The owner agreed to: (1) pay $55,000 in emotional distress damages and $25,000 in civil penalties; (2) notify all past applicants with a criminal history that they were eligible to reapply; (3) revise all tenant selection policies; (4) provide antidiscrimination training to all employees in New York City; and (5) submit to monitoring for a period of two years.

It may take some time to get your criminal background policy in shape, but there are some things that you should do right away to avoid triggering a complaint—or unwanted attention from anyone on the lookout for the next test case. Start by asking yourself these questions:

• Does your policy still consider arrest records in criminal background screenings? If so, you’ll need to make some changes immediately. HUD’s guidelines flatly say that excluding someone based on arrest records is likely to have a discriminatory effect based on race and national origin.
• Does your policy still have “all felonies” or long-ago felonies as reasons not to rent to someone? If so, you may be headed for trouble because the guidelines call into question the lawfulness of excluding people based on criminal convictions without considering what the conviction was for or how long ago it occurred. For help, consult with your attorney or screening company.
• Does your policy allow applicants to explain the background of a felony conviction? The HUD guidelines say that owners should offer applicants with criminal records an opportunity to explain the circumstances and what’s happened since then—something akin to the “interactive” process for disability-related reasonable accommodation requests.

Rule #6: Prevent Personal Biases from Derailing Fair Housing Efforts

In today’s divisive climate, it’s essential to focus on employee hiring, training, and supervision to keep the current political debate about race, immigration, and other hotly contested topics from affecting how your staff treats African Americans, Hispanics, and other racial and ethnic minorities.

Since problems can often be traced to attitudes toward cultural differences, as opposed to racial differences, it’s essential to hire people who are welcoming, flexible, and embrace change—since diversity is change. When interviewing prospective employees, you should be evaluating not only their acceptance of protected classes, but also their acceptance of things in general. Since it’s unlikely that you’ll hear any overt signs of racism, you should listen closely for any clues, hints, or code words that suggest any bias against anyone based on race, national origin, or any other protected class.

Train and regularly retrain all employees—from your leasing agents to maintenance staff, and everyone in between—to treat everyone in the same professional manner, without regard to race, color, or other protected class. Such basic “people skills” are a key component to preventing fair housing complaints, according to fair housing experts, who say that more people file complaints because of the way they are spoken to or treated than they do as a result of actual discrimination. You should also make sure all new hires receive adequate training in your policies and procedures, and at least the basics of fair housing law, before you allow them to interact with the public.

Proper supervision is essential because even the best training won’t protect your building from fair housing problems if an employee’s political opinions or personal biases are allowed to spill into the leasing office or elsewhere at work. Take it seriously if you hear that employees are making offensive or inappropriate comments in the workplace. Depending on the circumstances, even a single racial remark could trigger a discrimination complaint.

Rule #7: Maintain a Zero-Tolerance Policy on Harassment

Establish a zero-tolerance policy that bars anyone—including your residents—from harassing their neighbors or their neighbor’s guests based on their race, color, or other protected characteristics.

Fair housing law bans intimidating, threatening, or interfering with anyone exercising his fair housing rights. If racial disputes erupt between neighbors, you have an obligation to investigate and to intervene since you may be held accountable if it knew that a neighbor was harassing a resident for discriminatory reasons, but did nothing to stop it.

HUD regulations specifically state that an owner may be liable under the FHA for “[f]ailing to take prompt action to correct and end a discriminatory housing practice by a third-party” tenant where the owner “knew or should have known of the discriminatory conduct and had the power to correct it” [24 C.F.R. §100.7(a)(1)(iii)]. According to HUD, the prohibition of harassment applies to all protected classes under the FHA and a single incident of harassment can violate the FHA [24 CFR §100.600(c)]. In addition, harassment doesn’t require physical contact and includes written, verbal, and other conduct [24 CFR §100.600(b)].