Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.
LEGAL CORNER: 2020 Vision: A Clear Focus on Fair Housing and Professionalism
In December, this column focused on the extensive multi-year investigation conducted by Newsday (see https://bit.ly/357OA3L) and the widespread fair housing violations and discrimination taking place on Long Island. The Newsday investigation opened the eyes of the real estate industry to the discrimination that is still taking place many decades after the enactment of the original Fair Housing Act. It is important to realize that Long Island is not the only place where this is occurring. Since the publication of the Newsday article, there have been numerous important developments occurring on local, state and national levels as well as extensive media coverage, all worth noting. It is clear that 2020 will be a critical year and an important step in the advancement of fair housing and the elimination of discrimination in the real estate industry.
National Developments: NAR and HUD
On Jan. 8, the Leadership Team of the National Association of Realtors unanimously passed its “Fair Housing Plan” known as “ACT” (see https://bit.ly/2RiZKwB). NAR’s Fair Housing Plan “emphasizes (A)ccountability, (C)ulture Change, and (T)raining in order to ensure America’s 1.4 million Realtors are doing everything possible to protect housing rights in America.” NAR’s plan specifically makes a commitment that it will undertake to do the following:
• “Work closely with State Association Executives to ensure that state licensing laws include effective fair-housing training requirements and hold real estate agents accountable to their fair housing obligations.
• Launch a Public-Service Announcement Campaign that reaffirm[s] NAR’s commitment to fair housing, and [outlines] how consumers can report problems.
• Integrate fair housing into all Realtor conferences and engagements (to include a fair housing theme throughout the May Midyear Meeting).
• Explore the creation of a voluntary self-testing program, in partnership with a fair housing organization, as a resource for brokers and others who want confidential reports on agent practices so they can address problems.
• Create more robust fair housing education, including unconscious-bias training, and education on how the actions of Realtor(s) shape communities.
• Conduct a national study to determine what factors motivate discrimination in sales market[s].
• Profile leaders who exemplify the best fair housing practices and workplace diversity.
• Develop materials to help Realtors provide consumers with information on schools that avoids fair housing pitfalls.”
That same day NAR also met with Department of Housing and Urban Development (“HUD”) Secretary Ben Carson, who agreed to “…join NAR in a joint public service campaign to advance our shared fair housing goals.” NAR, in renewing and reinforcing its commitment to fair housing and elimination of discrimination in the real estate and housing industry, stated that NAR’s “…Code of Ethics and its adherence to fair housing are the cornerstones of our commitment as Realtors. With this new plan, we will see more robust education focusing on core fair housing criteria, unconscious bias, and how the actions of our members impact communities. A partnership with government officials and fair housing advocates will allow us to further promote equality as we continue to work to diversify our industry.” (See https://bit.ly/384GDNG).
Partnerships and collaborative efforts between each and every organization, Realtor association, governmental agency or legislature and the like involved in the real estate industry are critical if discriminatory behavior is going to be eliminated once and for all.
Fair Housing Initiatives and Developments at the State Level
On Dec. 16th, Gov. Andrew Cuomo announced new regulations were approved by the New York State Real Estate Board (see https://on.ny.gov/2tXJIQU). These regulations were directly prompted by the Newsday article and will “…mandate enhanced disclosures by real estate professionals to help ensure prospective home buyers, renters, sellers and landlords receive ample information about their rights and protections under New York State law.” Gov. Cuomo stressed that “Housing discrimination is completely unacceptable and it’s also against the law. New York State is taking immediate action to help ensure renters and homeowners are protected from any and all discriminatory actions when it comes to safe, accessible housing.”
The new regulations impose the following requirements on licensed real estate brokers and salespersons:
• “Notification of Fair Housing laws—Real estate brokers will be responsible for ensuring that each licensed professional working under their supervision provides a disclosure on fair housing and the New York State Human Rights Law to prospective home buyers, renters, sellers, and landlords. The disclosure, to be furnished by the Department of State, must be given to the prospective party via e-mail, text, facsimile, hardcopy, or other electronic messaging service. The disclosure must also be available at every open house or real estate showing conducted by a real estate professional.
• Posting of Fair Housing laws—Real estate brokers must display and maintain at every office and branch a notice highlighting the Human Rights law’s protections regarding housing accommodations and how consumers can file complaints. The notice must be visible from the sidewalk or another conspicuous place. The notice must also be prominently displayed on all websites created and maintained by real estate brokers, real estate salespersons and real estate teams. This notice must also be posted at every open house conducted by a real estate professional.
• Video recording and record preservation—Every entity approved to provide instruction pertaining to fair housing and/or discrimination in the sale or rental of real property or an interest in real property, must record video and audio of the instruction for every course in its entirety. The approved entity is required to keep the recording for one year following the date the course was delivered.”
As I pointed out in my December article (see https://bit.ly/2RlfcZl), the above regulations focus on a key principle, which is also contained in NAR’s Fair Housing Declaration (see https://bit.ly/348ye9y), and which is the disclosure by all Realtors and real estate professionals to consumers “…about their rights and responsibilities under the fair housing laws by providing brochures and other information.” Focusing on this one basic principle and providing the consumer with important information relating to fair housing issues and related concerns will certainly help to reduce the likelihood of discriminatory behavior.
Fair Housing Plan Unveiled by NYC
On Jan. 7, New York City Mayor Bill de Blasio released a draft version of a fair housing plan entitled “Where We Live NYC Draft Plan” (see https://bit.ly/30md0EO). The draft plan will be open to the public for additional comment until March 7, 2020. All comments will be published in the final version of the Where We Live NYC plan. The Where We Live NYC plan focuses on six specific goals (see https://bit.ly/387MC4g):
• Combat persistent, complex discrimination with expanded resources and protections.
• Facilitate equitable housing development in New York City.
• Preserve affordable housing and prevent displacement of long-standing residents.
• Enable more effective use of rental assistance benefits, especially in amenity-rich neighborhoods.
• Create more independent and integrated living options for people with disabilities.
• Make equitable investments to address the neighborhood-based legacy of discrimination, segregation, and concentrated poverty.
An article in The Real Deal (see https://bit.ly/2TpNtsU) reveals that “The city spends less than $100,000 on complaint-based testing, according to Jackie Bray, the director of the Mayor’s Office to Protect Tenants. The new project will have an annual budget of $2 million, with $750,000 dedicated to testing.” Prior to the Newsday article it was clear that the focus on fair housing issues and discrimination was not prioritized by New York City based on the funds expended on testing.
In fact, as revealed in the Newsday article, New York State and Governor Cuomo also failed to live up to the promises made in 2016 that significant expenditures and resources would be allocated to testing and fair housing issues. According to Newsday, “Three years later, Cuomo’s unprecedented drive as governor—now described by his administration as a ‘pilot program’—entailed the expenditure of $65,000 and conducted 88 paired tests of upstate and Westchester-area landlords for discrimination in apartment rentals.” The efforts resulted in “…a $6,000 fine against a landlord charged with refusing to rent to disabled individuals using emotional support animals; a $15,000 settlement by a landlord charged with refusing to rent to black applicants; and a pending court case against a landlord for allegedly refusing to rent to individuals who use service animals.”
It is clear that every organization and governmental agency must dramatically ramp up their efforts in combatting discrimination, educating the public on fair housing issues and discrimination and enforcing existing fair housing laws.
HGAR: Leadership at the Local and Micro Level
In his Real Estate In-Depth article entitled “Enough Excuses: It’s Time to Take Bold Action on Fair Housing” (see https://bit.ly/2RlBR7X), Richard Haggerty, CEO of the Hudson Gateway Association of Realtors, stressed that agents need to stop making excuses. He stated, “Enough excuses that these stories are about a few rogue agents and are not representative of the industry as a whole. The Newsday story reflected a pattern of racial steering that was both extensive and pervasive, and I’m sorry to say it could happen anywhere.” Leadership needs to start at the local and micro level—more specifically, at the association, brokerage office level and ultimately, at the individual agent level.
Haggerty stressed, “HGAR needs to do more, and we will do more. HGAR President Ron Garafalo and President-elect Gail Fattizzi have appointed a special Task Force to jump start the association’s efforts to promote and strengthen adherence to Fair Housing Laws. Haggerty stated, “We need new directions and new ideas to bring home the vital importance of fair housing and the irrevocable damage that practices like steering cause in our communities.” On Jan. 7, HGAR conducted a mandatory training session for all instructors of HGAR’s School of Real Estate. These are all important steps in reinforcing knowledge of fair housing laws and issues, but more must be done.
It is also critical that every agent makes sure that fellow agents do not engage in such discriminatory behavior and a certain level of self-policing must also be part of the solution. The level of professionalism must be heightened. Each and every real estate professional must take on a certain responsibility and make it a priority to ensure that the bar is raised for the entire real estate industry.
In 2020 and beyond, the real estate industry must open its eyes and have “2020 vision” with respect to a housing industry without discrimination and it must focus on the advancement of fair housing at all levels.