State Senate to subpoena actual property brokers, corporations in housing probe

The Senate will issue subpoenas to up to 67 real estate agents and business representatives to investigate allegations of housing discrimination that were revealed in a recent Newsday report, lawmakers said Thursday.

Around 68 agents and corporations have been asked to appear at a Senate hearing on Thursday sparked by Newsday’s Long Island Divided series. But only one did it.

“The remaining 67 people either failed to respond or completely refused to testify,” said Senator James Skoufis (D-Hudson Valley), chairman of the Senate Committee on Investigations and Government Operations, midway through the Hofstra University hearing. “There is an easy way and a difficult way. After today, summonses will be served on many of these people to compel their testimony. “

It was one of many hotspots during a five-hour hearing that focused on the Newsday report and found evidence of widespread inequality of minority home buyers on Long Island. The senators took testimony from local government officials, real estate experts, anti-discrimination groups, real estate officials and the undercover testers Newsday had used in their investigation.

M. Ryan Gorman, President and CEO of Realogy Holdings Corp.’s NRT LLC, the nation’s top-selling residential real estate broker, admitted that the Newsday series had a “pervasive” problem of discrimination. When asked if the company owed an apology to African Americans, Gorman personally apologized and vowed that the company would review the training of agents across the country.

“This process has led me to believe that we have our own training and that we need to improve government-mandated training,” Gorman said. “I think what was exposed in the Newsday investigation was extremely disappointing.”

Sign up for the Classroom newsletter.

The pandemic changed education on Long Island. Find out how.

By clicking on Register, you agree to our privacy policy.

The Senators urged Gorman whether real estate agents covertly exchange information or language with one another in order to steer customers without explicitly violating the protection of fair living conditions. Senator John Liu (D-Queens) accused NRT of being fully aware of the discriminatory practices of some agents.

Gorman replied, “Under oath and for the record, I and NRT were definitely unaware of these practices.”

Realogy owns or franchises real estate companies Century 21 Real Estate LLC, Coldwell Banker Residential Brokerage on Long Island, Corcoran Group and Daniel Gale Sotheby’s International Realty. Newsday tested agents associated with all four, and Fairday’s two fair housing experts found evidence of different treatment in 10 cases involving agents from Century 21 and Coldwell Banker.

Senator Kevin Thomas (D-Levittown), chairman of the consumer protection committee, said Thursday’s trial was just the beginning, that the Senate would soon be in touch with the agencies and companies that failed to show up, and that lawmakers would push the legislation in Albany will pursue in 2020.

“We strive to find out the facts, receive recommendations and act accordingly,” said Thomas at the end of the hearing. “You will know that we are deadly serious about discrimination and segregation on Long Island. We have to end this. “

In addition to the Realogy affiliates, lawmakers also requested representatives and agents from the other eight dominant Long Island realtors whose agents were tested by Newsday: Douglas Elliman Real Estate, Charles Rutenberg Realty Inc., Coach Realtors, Laffey Fine Homes, Keller Williams Realty, Signature Premier Properties, Realty Connect USA and RE / MAX LLC.

In its three-year investigation, Newsday sent testers with hidden cameras and microphones to meet with real estate agents and record the meetings. The results contained evidence that potential homebuyers were drawn to neighborhoods because of their race and that agents require pre-approved mortgages from black customers but not white ones.

The Senate investigation is just one of several announced after the Newsday series was published. Governor Andrew M. Cuomo and Attorney General Letitia James have also announced that they will be investigating. Two state lawmakers have proposed a bill to expand the state’s powers to suspend or revoke a real estate agent’s license.

At the beginning of the hearing, the head of the New York State Association of Realtors told senators that his trade group was “appalled” by what Newsday had found.

“If there’s one message we’d like to get you across today, it’s this: We’re appalled at Newsday’s reported activity involving real estate licensees, and NYSAR is committed to working with New York State to be part of the future solution “Said the president of the association, Moses Seuram, the legislature.

Seuram said the group suspended its real estate agent training courses nationwide in an effort to revise them after the Newsday report was released. The report showed that current methods were not effective, he said.

Ineffective was an “understatement,” replied Senator Brian Kavanagh (D-Manhattan), Chair of the Housing Committee.

Lawmakers also heard testimony from Kimberly Kinirons, the attorney responsible for the Suffolk County Attorney General’s regional office.

When asked by the senators, Kinirons replied that she did not know how many fair housing investigations had taken place over the past year and had no details of any testing programs by the Attorney General, including the number of testers sent, if any, in the past year to check for agent bias . When asked if the attorney general’s office sent subpoenas, she said she was unable to comment.

The panel also heard testimony from two of Newsday’s undercover testers used to meet with agents. One, a white man, said an agent trying to keep him out of a minority neighborhood had sent him a message asking him to read about the recent violence against the MS-13 gang in the area. The other, a black woman, told the senators that she was even more shocked than she had expected at the obvious guiding efforts of the agent she encountered.

The Senators opened the hearing on Thursday by demanding evidence of the inequality of treatment by real estate agents against potential minority homebuyers, whom Newsday had identified as “alarming” and “offensive” in a detailed report.

“These alarming allegations contradict our proud 400-year history,” said Skoufis in the opening speeches for the founding of New York. “This is not who we are, or at least not who we should be.”

Senator Todd Kaminsky (D-Long Beach) called the Newsday results of the housing bias a “national embarrassment” and pledged to “use the Senate’s investigative powers” to look further into real estate practices in Long Island.

During the hearing, a real estate expert testified that the discrimination against real estate and the steering of customers in certain parts of the city is no longer obvious, but is now more subtle. A black or Hispanic homebuyer doesn’t literally get a door slammed in the face anymore, said Fred Freiberg, co-founder of the Fair Housing Justice Center and advisor to the Newsday Project.

“Today the image of a slammed door was replaced by a revolving door … (customers) are simply directed away from their desired housing,” said Freiberg. “Violators have simply learned to hide their discriminatory behavior.”

A significant problem, witnesses said, is that the state does not spend money using testers to investigate discrimination, leading consumers to believe that filing complaints is pointless.

“People know nothing is being done,” said Elaine Gross of ERASE Racism. “It almost makes it worse to pretend there is a system to solve this problem and have a system that is so broken that the perpetrators know nothing is being done and the victim knows that nothing is done when they file a complaint file. “

When asked by the senators to rate how seriously the state takes discrimination in housing construction on a scale from 1 to 10, Gross said: “I would put it at minus 1.”

She added: “The state does not do its work with rigor or urgency.”

Earlier, Arthur Browne, Newsday’s project leader, had presented the newspaper’s findings to the Senate panel, including 49 percent of African-American testers classified as unequal by real estate agents and 39 percent of Hispanic testers.

Laura Curran, executive director of Nassau County, told the panel she believed the real rate could be higher and the newspaper was more conservative about counting incidents of inequality.

“I understand very much they were wrong as a precaution and the numbers probably weren’t as low as reported,” said Curran.

Steve Bellone, executive of Suffolk County, called on lawmakers to create a “Bill of Rights” for consumers to regulate the interactions between consumers, realtors and mortgage lenders.

With Maura McDermott and Candice Ferrette