HUD Charges Philadelphia Landlords with Six Violations of Fair Housing Act

Property Manager Steers Prospective Black Renter Away from Predominantly White Neighborhood

Press release

By: Antoinette Banks

Date: February 6, 2006

Source: U.S. Department of Housing and Urban Development. "News Release: HUD Charges Philadelphia Landlords with Six Violations of Fair Housing Act." February 6, 2006 <http://www.hud.gov/news/release. cfm?content=pr06-015.cfm> (accessed May 26, 2006).

About the Author: Antoinette Banks is the media contact for the U.S. Department of Housing and Urban Development (HUD), the primary government agency responsible for ensuring equal access to housing and for improving the quality of affordable housing in the United States.

INTRODUCTION

In spite of the passage of constitutional amendments and civil rights laws after the American Civil War (1861–1865), racial discrimination, including segregated housing practices, was widespread in the South. Beginning in the late 1800s, racial segregation became a legal requirement in that region, a situation that was not undone until new laws were passed during the civil rights movement of the 1950s and 1960s. Racial segregation—in housing, schools, employment, and the like—was common in the North as well, though not supported by legislation.

As the country became progressively more industrialized, poorer and less well educated people began to migrate toward the urban areas, particularly in the northern states, in search of better-paying jobs and an easier way of life. In these areas, public housing projects, urban renewal programs, and geographic area rezoning all served as ways of increasing the racial and socioeconomic divide and subtly promoting segregation, while setting the stage for urban ghettos and deeply impoverished housing projects. Housing ordinances were deliberately worded in ways to ensure that the racial divide was developed. Streets and neighborhoods were zoned specifically by race. As businesses moved away from the cities and into newly created suburban areas, inner-city ghettos and housing projects remained primarily populated by African Americans, while white people migrated toward the suburbs. The racial and cultural divide was both intentionally created and long-lasting. Many areas of the United States remained highly segregated into the twenty-first century.

Title VIII of the Civil Rights Act of 1968, a section also called the Fair Housing Act, was designed to prevent any sort of intentional discrimination—based upon "race, color, religion, sex, familial status, or national origin"—in housing sales or rentals, in the issuance of mortgages or other types of dwelling-related financing, or in any other sort of residential dealings or financial arrangements. Important preceding legislation, in the form of Title VI of the Civil Rights Act of 1964, stated that no programs or entities that receive federal funding could intentionally discriminate against persons based on race, color, or national origin. In addition, there are a series of executive orders that bar discrimination in housing or employment via facilities or agencies that are in any way related to the federal government, and such orders place oversight of housing-related issues under the auspices of HUD and the Fair Housing Council.

PRIMARY SOURCE

Washington, D.C.— The U.S. Department of Housing and Urban Development announced today that it has charged Daniel, Helene and Ava Waisbord, and Rhawn Street Apartments LLC, owners of more than 150 rental units, with violating the Fair Housing Act for refusing to rent a property to a prospective African-American renter, steering the person away from a predominantly white neighborhood, and quoting her a higher rental price to discourage her from renting the home.

"The right to housing without regard to one's race or color isn't an option, it's the law," said Kim Kendrick, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "We're working hard to educate housing providers and the public about their fair housing rights and responsibilities, but when a landlord illegally prevents someone from obtaining the housing of their choice, we will take swift enforcement action."

HUD's investigation revealed that Karla Baker, who is African American, met Daniel Waisbord on Gillespie Street in Philadelphia to view a vacant house for rent. Baker liked the house and Waisbord told her a deposit was required to hold the home. Waisbord told her the rent was $775 and that she would have to pay the water bill. Baker asked Waisbord if the rent could be reduced to $750 monthly. Waisbord said that he could not reduce the rent on the property they were viewing, but that he had other properties he could reduce the rent on.

Baker insisted on renting the Gillespie St. property and gave Waisbord a deposit to hold the property. Waisbord then allegedly stated, "The neighbors don't like me and I am a white man, and they are Germans. I can decrease $25 off the other place, but I can't rent this place to you, the neighbors won't like it."

Waisbord insisted that Baker see other properties he had on Rhawn St. Baker relented and later viewed the Rhawn St. properties. When Waisbord showed up for the viewing, Baker informed him that she did not like the location and the lack of security, and that she still wanted to rent the Gillespie St. property. Waisbord declined and returned Baker's deposit.

Less than one month later, Waisbord rented the house on Gillespie St. to two white renters for $700 a month, plus $42 a month for water.

Among other things, HUD is charging the owners, Daniel, Helene and Ava Waisbord, and Rhawn Street Apartments LLC with violating the Fair Housing Act for:

Requiring a higher rent for the Gillespie Street house from Baker than from the white tenants who eventually rented it, because of Baker's race and color;

Telling Baker that she could not rent the Gillespie Street property because the neighbors would object to Baker's race and color;

Misrepresenting to Baker that the Gillespie Street house was not available for rent to her, because of her race and color; and

Steering the Complainant from renting the property at Gillespie Street on account of her race and color.

A hearing on the charges will be held by a HUD Administrative Law Judge on April 25, 2006 in the Philadelphia, Pennsylvania, area, unless either the complainant or respondent elects to have the case decided by a federal judge in U.S. District Court. An election to go to district court must be made by Feb. 21, 2006.

Housing discrimination charges heard before an Administrative Law Judge carry a maximum civil penalty of $11,000 for a first offense—more if the respondent has committed prior violations of the Act—plus actual damages for the complainant, injunctive or other equitable relief, and attorney fees.

Should either party elect to go to district court, either party may request a jury trial. A district court may award the damages available in an administrative proceeding, and may also award punitive damages.

If neither party elects to proceed in federal district court, the case is brought on behalf of the complainant by a HUD attorney before a HUD Administrative Law Judge. If either party does elect, the case is brought on behalf of the complainant by an Assistant United States Attorney or an attorney from the U.S. Department of Justice in federal district court. In either forum, each party has the right to be represented by his or her own attorney.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws.

SIGNIFICANCE

Persons involved in any aspect of the business of real estate are legally prohibited from acting in a discriminatory fashion with customers or potential clients. One of the most problematic and most frequently cited issues in consumer complaints against real estate agents is a practice called "steering." Steering is when a Realtor urges buyers or renters to look at housing only in specific areas or types of dwellings based upon the racial composition of the locale. The behavior may be very subtle: the client may simply be taken to specific areas, or certain neighborhoods or streets may be promoted while others are avoided. Often, a way of encouraging people to refrain from considering certain locations is to state that the schools in a particular neighborhood or area are inferior to the schools in other regions.

One way in which steering occurs, particularly in the rental markets, is by quoting African American, Hispanic, or other minority applicants (including those who are openly homosexual, for instance) higher rates than are given to white people. Another practice is to say that no units or homes in particular subdivisions or neighborhoods are available, offering to enter the individual's name on a waiting list, and then never contacting them again. In the home-buying or refinancing realms, discrimination is often evidenced by charging minorities higher interest rates than non-minorities, by placing them in higher-risk rate categories (resulting in higher interest rates and higher monthly payments), or by refusing to approve mortgages or loans for minorities with a higher degree of frequency than is the case for white individuals who have equal qualifications and similar credit profiles.

In a 2005 article in theWashington Post, it was suggested that minority home buyers might fall victim to so-called predatory lending practices, in which loans are structured so as to hold higher interest rates, to have built-in pre-payment penalties, or to otherwise put people in risky and oppressive financial situations in order to secure safe housing. According to data published by HUD, African Americans and Hispanics report experiencing some form of racial or ethnic discrimination in roughly 50 percent of all private housing interactions—that is, those based on response to advertisements, driving up to homes for sale, or stopping at model home or apartment sites.

The National Fair Housing Alliance (NFHA) publishes theFair Housing Trends Reportin which unethical, unfair, and illegal housing practices are detailed. The NFHA uses a testing program in which people pose as couples—African American, white, and Hispanic—who are equally matched for demographics and socioeconomics. In some cases the minority applicants show slightly superior profiles, including better credit reports and higher incomes. These "couples" pretend to be potential home buyers and visit a variety of Realtors, rental companies, and lending institutions, in order to ascertain the use of discriminatory practices. The NFHA's 2006 report, which covered a dozen metropolitan housing regions across the nation, revealed a surprisingly high percentage of overt discriminatory acts against African Americans and Hispanics. According to the NFHA's testing rates, nearly 90 percent of the time the minority couples were steered away from primarily white areas. They were also shown fewer homes and were often "stood up" by Realtors after making and confirming appointments.

In contrast, white couples were shown a larger number of homes and Realtors were more likely to show up for scheduled appointments. In addition, the white couples were actively steered away from neighborhoods predominantly populated by minorities and from racially diverse areas. As was reported elsewhere, the NFHA couples were frequently discouraged from considering certain housing areas through language disparaging the quality of the neighborhood public schools. The NFHA report estimated that there are close to three million intentional violations of the Fair Housing Act, based simply on the numbers concerned with racial, ethnic, or cultural discrimination, every year throughout the United States. The NFHA also reported that this is likely to be a vast understatement of true occurrences; the organization estimates that more than 90 percent of the violations are never publicly reported.

FURTHER RESOURCES

Books

Fader, Steven.Density by Design: New Directions in Residential Development. Washington, D.C.: Urban Land Institute, 2000.

Lowenstein, Allard.Submission on Racial Segregation and the Right to Housing. Washington, D.C.: Poverty & Race Research Action Council, 2005.

Rodwin, Lloyd, and Bishwapriya Sanyal, eds.The Profession of City Planning: Changes, Images, and Challenges, 1950–2000. New Brunswick, N.J.: Center for Urban Policy Research, 2000.

Yinger, John.Closed Doors, Opportunities Lost: The Continuing Costs of Housing Discrimination. New York: Russell Sage, 1995.

Periodicals

Downey, Kirsten. "Segregation Persists in Housing, Study Says."Washington Post(April 6, 2005): E02.

Downs, Anthony. "Some Realities about Sprawl and Urban Decline."Housing Policy Debate10 (1999): 955–974.

Eig, Jonathan. "Mixed Results: How Fear of Integration Turned White Enclave into a Melting Pot."Wall Street Journal(August 7, 2000): A1.

Web sites

civilrights.org. "National Fair Housing Alliance Releases Housing Discrimination Data and Denounces Crisis of Segregation." April 5, 2006 <http://www.civilrights. org/issues/housing/details.cfm?id=42073> (accessed May 29, 2006).

U.S. Department of Housing and Urban Development. "Fair Housing Laws and Presidential Executive Orders." March 24, 2006 <http://www.hud.gov/offices/fheo/ FHLaws/> (accessed May 29, 2006).