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Brokerages Mistreated Prospective Homebuyers of Color and Violated Fair Housing Laws
Settlement Requires Brokerages to Dedicate More Than $115,000
to Fix Discriminatory Practices and Undertake Fair Housing Trainings
NEW YORK – New York Attorney General Letitia James and Governor Kathy Hochul today took action to stop illegal and discriminatory housing practices at three Long Island real estate brokerages that were discriminating against Black, Hispanic, and other homebuyers of color.
Following an investigative report conducted by Newsday, the Office of the Attorney General (OAG) and the Department of State (DOS) opened parallel investigations into Keller Williams Greater Nassau (KWGN), Keller Williams Realty Elite (KWRE), and Laffey Real Estate (LRE). These investigations found that agents associated at these firms steered prospective homebuyers of color away from white neighborhoods and subjected them to different requirements than white homebuyers, and otherwise engaged in biased behavior.
In some documented cases, agents were recorded showing preferential treatment to white homebuyers, disparaging neighborhoods of color, and directing homebuyers of color to homes in neighborhoods where residents predominantly belonged to communities of color. As part of these agreements, the brokerage firms are required to spend more than $115,000 to remedy their discriminatory practices and undergo regular fair housing trainings.
“Efforts to discriminate against any New Yorker’s fair access to housing cannot, and will not, be tolerated,” said Attorney General James. “These investigations have uncovered a pervasive culture of allowing unlawful discrimination and violations of every New Yorker’s right to fair housing. These settlements should send a clear message: if you discriminate and deny New Yorkers their basic right to housing, we will take action. I thank Governor Kathy Hochul and her administration for helping address these unacceptable housing discrimination practices on Long Island and throughout our great state.”
“With these actions, we’re delivering a forceful message: New York state has zero tolerance for discrimination,” said Governor Hochul. “Here in New York, we firmly believe that housing is a human right and I thank Attorney General James and Secretary of State Rodriguez for their work to enforce our laws and protect that right for all New Yorkers.”
“Real estate professionals in New York state have an obligation to provide fair and equitable services to all,” said Secretary of State Robert J. Rodriguez. “Housing discrimination is illegal, and the Department will not tolerate New Yorker’s rights being violated. This comprehensive fair housing settlement demonstrates that New York’s leadership is making sure every New Yorker has equal access to housing. The penalties and agreements with these real estate companies educate their agents about housing laws to ensure New Yorkers are protected.”
The OAG opened an investigation into several real estate brokerage firms in 2019 after Newsday exposed their discriminatory practices. The OAG concluded that LRE, KWRE, and KWGN engaged in discriminatory practices that violated state and federal fair housing laws.
The investigation involved review of two paired tests conducted on LRE agents — one in the firm’s Huntington office and another in Great Neck. In Huntington, LRE was found to have required a potential Black homebuyer to obtain a preapproval letter from a mortgage lender before he was shown a home, while the same standard was not applied to a white homebuyer. In Great Neck, an LRE agent lectured a Hispanic potential homebuyer about his finances, suggesting that he limit his search to an area he could afford without any insight into his financial situation. The same agent did not give the affordability lecture to a white homebuyer looking for homes in the same neighborhood and instead steered him towards neighborhoods that were less diverse, stating, “Do you want your kids to be in school with kids that they relate to?” Based on thorough review of evidence collected throughout the investigation, OAG determined that LRE’s agents unlawfully discriminated against homebuyers based on race, color, and national origin, in violation of the Fair Housing Act.
KWRE and KWGN also engaged in illegal and discriminatory housing practices. For example, one agent warned a white potential homebuyer against a particular neighborhood, citing recent gang violence, but then proceeded to tell a Black potential homebuyer that the same area has “the nicest people.” The Black potential homebuyer was also directed toward predominantly non-white areas more than the white potential homebuyer, in a practice known as racial steering. A KWGN agent required a Black potential homebuyer sign an exclusivity agreement before touring homes, but showed properties to a white potential homebuyer immediately, without any mention of such an agreement. In another instance, the agent told a white potential homebuyer to avoid school districts where a majority of the students were of color, saying they were not good schools, and even admitting to the potential homebuyer, “legally, I get in big trouble if I [tell you this].”
The paired tests conducted controlled for race as the only variable: the prospective homebuyers otherwise submitted similar financial profiles and identical terms for their future homes.
The OAG concluded that LRE, KWRE, and KWGN violated the Fair Housing Act and the New York State Human Rights Law. An investigation into another real estate brokerage is ongoing. The DOS has taken action against individual licensed agents, which included the revocation of a license belonging to a former KWGN agent and imposed a fine against an individual former KWRE agent. Several DOS investigations into LRE and its agents also remain pending.
As part of the settlement announced today, LRE is required to pay $30,000 to the state and $35,000 to Suffolk County to conduct unannounced fair housing testing of any LRE agent at any LRE branch. In addition, LRE must create an online complaint form for potential buyers and sellers to report any potential instances of discrimination, and LRE is required to provide quarterly fair housing trainings to all its agents.
KWGN and KWRE, under a global settlement with OAG and DOS, are required to pay $25,000 to Suffolk County to promote enforcement of and compliance with fair housing laws. KWGN and KWRE must also spend up to $25,000 on fair housing courses and trainings for its agents.
The OAG and DOS are pleased at the success of this multi-agency partnership and will continue to work to protect all New Yorkers from unlawful discrimination. New Yorkers who have been subjected to discriminatory housing practices are encouraged to report such conduct to OAG at email@example.com.
These matters were led by Senior Counsel Sandra Pullman and Assistant Attorney General Lillian Marquez of the OAG Civil Rights Bureau and DOS Litigation Counsel David Mossberg, under the supervision of OAG Civil Rights Bureau Deputy Bureau Chief Travis England and DOS General Counsel Linda Baldwin. The OAG Civil Rights Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy. The DOS Division of Licensing Services is a part of the Office of Business Development, which is led by Director Jodi DeLollo and overseen by Deputy Secretary of State Whitney Clark.
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