- Washington, DC, real-estate firms who discriminated against low-income renters face a record fine.
- DC also banned the discriminatory landlords and brokers from doing business in the city ever again.
- Two housing experts said this could inspire other cities to crack down on renter discrimination.
In October, Washington, DC, banned three real-estate companies accused of discriminating against lower-income renters from operating in the city ever again.
Add in a $10 million penalty, and it's the largest and strictest punishment for any company accused of housing discrimination, according to Karl Racine, the attorney general for Washington, DC.
The historic settlement in DC could trigger harsher penalties for unfair landlords across the country, two housing experts said.
"This is a fairly significant case," Mary Cunningham, the vice president of metropolitan-housing and communities policy at the Urban Institute think tank, said. "Cases like this are really important for making sure that the fair-housing laws are followed."
After a punitive ruling like this one, landlords in other cities may think twice about engaging in illegal discrimination, like turning away tenants with housing vouchers, Robert Silverman, a professor of urban-and-regional planning at the University at Buffalo, told Insider.
"The settlement is evidence that whatever their business practices were, they're not ones that will be supported in any kind of a court proceeding," Silverman said. "It definitely puts other landlords on notice who are doing similar types of things."
DC landlords treated rental applicants with housing vouchers unfairly
Racine accused DARO Management Services, DARO Realty, and Infinity Real Estate — which together own, operate, and manage more than 1,200 apartments in affluent neighborhoods of Washington, DC — of charging extra fees and, in some cases, flat-out refusing rentals to low-income applicants using government assistance.
The three management companies "routinely" waived fees like security deposits for applicants with good credit while requiring those with vouchers to pay these costs, the attorney general's complaint said.
Carissa Barry, the DARO Management president and principal broker — who had to forfeit her real-estate license in the settlement — sent multiple emails attempting to discourage DARO employees from accepting applicants with Section 8 vouchers. The Section 8 program offers qualifying low-income households vouchers to subsidized rents in buildings not designated as affordable housing.
"Off the record I am doing everything I can to reduce if not eliminate the section 8 program from our communities," Barry said in an email to Steven Kassin, the founder and managing partner of Infinity Real Estate. The attorney general uncovered and published the email.
The companies "deliberately and willfully" violated the District of Columbia Human Rights Act, Racine said.
About 11,500 low-income households use DC's voucher program, Racine said in a press conference after the settlement. And of those 11,500, 95% are Black, 79% are women, and 66% make less than $20,000 a year, he told NPR.
Even if race did not motivate the three management companies' actions, Racine said, they take a serious toll on underrepresented communities.
"When landlords break the law and refuse to accept vouchers, it's reminiscent of Jim Crow-era housing-discrimination policies intended to restrain opportunities for Black residents," he said.
Other landlords should expect future crackdowns
Right now, however, many American cities are more lenient than DC with landlords when it comes to enforcing fair-housing laws.
In Los Angeles, 76% percent of landlords illegally refuse to accept vouchers, according to an Urban Institute study. The same study found that only 15% of DC landlords refused to accept vouchers. LA and DC both have laws that prohibit discrimination against those who use federal assistance for rent, yet DC is where the latest crackdown on discriminatory behavior has occurred.
This settlement should make landlords who operate in regions inside and outside of DC more scared to commit inequity violations, Cunningham said.
"That type of differential treatment is easily demonstrable," Silverman added. "That would send a clear message to any landlord that — if they were using practices like that, which would have an adverse impact on a renter with a voucher — that would be the kind of business practice that you probably want to stop doing, knowing that this decision was made in this case."
Cunningham stressed the "small ripple effects" of the settlement.
"We're making sure that we're not only reinforcing the laws that are on the books, but also that we're preventing future discrimination," she said.