By Matthew Haag
March 15, 2021Updated 2:43 p.m. ET
The caller was a woman looking to move with her boyfriend into a studio apartment on the Upper East Side of Manhattan, advertised for $1,751 a month. The man who answered, the real estate broker on the listing, said he would be happy to show them the place.
The woman, however, had one last question: Would the landlord accept her federal housing voucher for tenants of lesser means, known as Section 8?
“If she accept what? Oh, no, she would not,” Harris Philip, an independent broker, told the woman, who was actually an undercover investigator for a watchdog group. “She just doesn’t. She wants well-qualified people.”
That exchange, secretly recorded by the group, Housing Rights Initiative, in February 2020 and shared with The Times, is part of a sweeping lawsuit filed on Monday in federal court in Manhattan that accuses 88 brokerage firms and landlords in New York City of discriminating against people with housing vouchers.
The suit recounts dozens of conversations recorded by investigators, who posed as prospective tenants, that detail the extraordinary challenges faced by renters using Section 8, essentially a guaranteed rent check from the federal government that has been a pillar of rental support for many American families.
Enacted in 1978, Section 8 is a $22 billion annual program managed by the federal Department of Housing and Urban Development but administered by local housing authorities. New York City receives the largest share in the country.
In New York, those renters are primarily Black and Latino. More than 125,000 households in the city use Section 8 housing vouchers.
The companies named in the suit include small landlords and brokers, as well as large, national companies, like Compass, the Corcoran Group and a Century 21 franchise office in Manhattan.
For landlords and brokers, participating in the Section 8 program can involve bureaucratic challenges, including having an inspector review and sign off on the health and safety of a unit before it is rented. But those additional steps cannot be used as grounds to deny a Section 8 tenant.
A spokeswoman for the Corcoran Group said that the company was committed to “upholding the principles of the Fair Housing Act,” referring to the 1968 federal law, as well as “offering comprehensive education and training programs for our employees and affiliated sales agents.”
“We take these allegations seriously,” the spokeswoman said.
A spokesman for the Century 21 corporate office declined to discuss the case but said that the company does not tolerate any discrimination. Compass did not respond to a request for comment.
Mr. Philip, the broker for the Upper East Side apartment, said in an interview that he did not recall that conversation last year but knew it was illegal in New York to discriminate against someone because of their source of income.
“I would never say anything straightforward like this because I do consider Section 8 qualified,” Mr. Philip said, adding that he had been a broker for 40 years but had never rented to someone with a voucher. “Maybe she rubbed me the wrong way.”
For years, undercover operations have been frequently used to expose potential discrimination in both the rental and homeowner markets. The method is also used by government investigators, including those who target Section 8 discrimination.
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The lawsuit raises questions not only about widespread bias against voucher recipients but also about the blatant flouting by agents and property owners of both New York City and New York State laws that prohibit discrimination against people because of their source of income.
Because unused vouchers expire in 120 days without an extension, each rejection is a significant setback in trying to find an apartment, which is already difficult in New York’s expensive rental market.
“Our goal here is simple: It’s to get real estate companies to abandon their discriminatory housing practices and follow the damn law,” said Aaron Carr, the founder and executive director of the Housing Rights Initiative, which started in 2016. “They are the gatekeepers of housing and get to decide where families live, where they work and where children go to school. Housing discrimination goes beyond the walls of housing.”
The lawsuit seeks unspecified monetary damages and for the discriminatory practices to be stopped.
The Community Housing Improvement Program, an organization that represents landlords in New York, called the Section 8 program a “bureaucratic nightmare” that needs to be overhauled. The group was not named in the suit.
“Tenants, housing providers and elected officials all see the failings of the current voucher system,” Jay Martin, the group’s executive director, said on Monday. “There must be no tolerance for income discrimination.”