A national fair housing organization this week announced a series of complaints alleging discrimination by real estate agents affiliated with several NRT Inc. real estate companies and other real estate offices.
In 2003, the National Fair Housing Alliance tested Fair Housing Act compliance at offices in 12 cities that were identified in a U.S. Department of Housing and Urban Development study released in 2000. This investigation allegedly found “egregious discrimination at every NRT company tested during the three-year testing project,” according to a report released this week.
In Chicago, the organization tested Coldwell Banker Residential’s Chicago Gold Coast office and charged that “real estate agents blatantly steered home buyers by race and denied basic services to African Americans,” according to the “Housing Segregation Background Report.”
“NRT Inc. has proven time and time again that it maintains a pattern and practice of discrimination based on race,” the report alleges.
Bruce Zipf, president and CEO for NRT, said in a statement, “NRT does not believe that there is any merit to the allegations being made by the National Fair Housing Alliance, and their organization has been unresponsive to our repeated attempts to engage in constructive dialogue during the past year.”
He added, “I think NRT’s record on diversity education and training speaks volumes for our corporate culture for our employees as well as the ethical standards to which we hold our sales associates accountable. “
NRT, a part of Realogy Corp., formerly the real estate services division of real estate and hospitality giant Cendant Corp., oversees company-owned brokerage offices for real estate brands that include Coldwell Banker, ERA, Century 21 and Sotheby’s International Realty, among others. The largest brokerage company in the nation, NRT has 1,000 offices and 64,000 sales associates and operates in 35 major metro areas.
Shanna Smith, president and CEO for the fair housing group, said the group filed a complaint with HUD in March 2005 about the findings of its testing project in Chicago. In its investigation, the organization sent groups of white and African-American testers, posing as home buyers, to review Fair Housing Act compliance.
“Overall, agents showed white home seekers 36 units versus showing only seven units to African-American home seekers,” the report alleges. “Against her own economic interest, one real estate agent told a potential African-American home buyer that he should rent rather than buy, although his financial profile was stronger than his white counterpart’s. He was shown no units — the white home seeker working with the same agent saw 21 units.”
The fair housing group’s complaint to HUD against the Coldwell Banker Gold Coast office states, “Agents of this real estate company indicate through words and conduct that homes are not available for inspection or sale because of race,” and “provide false or inaccurate information regarding the availability of dwellings for sale based on race,” among other charges.
Organization staff have been in discussions with the U.S. Justice Department about the Fair Housing Act investigation and “we’re going to be talking to our attorneys and board and preparing federal litigation” if the complaint is not resolved, Smith said.
There is still hope that HUD could assist in bringing all of the parties to the table to address the complaints before resorting to a lawsuit, she added. “I would hope (that) would take place before the end of October. At that point it will be a year since we spoke with NRT and we’ll just have to move forward with litigation.”
Doug Ayers, president and COO for Coldwell Banker Residential Brokerage in Chicago, said in a statement, “We take the allegations made by the National Fair Housing Alliance very seriously, but we have no reason to believe at this time that there is any merit to their complaint.”
The company, he said, is “a longstanding advocate of fair housing,” adding, “Our company does not tolerate discrimination, which is well documented in our fair housing compliance training and diversity awareness training that we provide to our new and existing agents. We will of course continue to review the allegations.”
The National Fair Housing Alliance, based in Washington, D.C., is a consortium of about 220 private, nonprofit fair housing organizations, state and local civil rights agencies, and individuals. The group has a primary goal “to promote integration by challenging policies and practices that create and maintain segregated neighborhoods and schools.”
In addition to the complaint against the Coldwell Banker Gold Coast office, the organization has issued complaints against Coldwell Banker’s “The Condo Store” in Atlanta; Coldwell Banker Marietta, in a suburb of Atlanta; and RE/MAX Buckhead in Atlanta. The group also reported that it has prepared other complaints against Century 21 Town & Country in Detroit; RE/MAX East West in Elmhurst, Ill.; Peter J. Riolo Real Estate in Westchester County, N.Y.; and Julia Stevens Realty on Long Island, N.Y.
The bulk of the organization’s testing project was paid for through a contract with HUD, Smith said, and the project focused on housing providers that were found to have violated the Fair Housing Act in HUD’s “Housing Discrimination Study 2000.”
“I did expect that we’d find some racial steering,” she said, adding, “I am shocked at the high level and the egregiousness of the evidence.”
Racial steering is a real estate practice through which real estate professionals encourage people to look for homes in areas where residents generally share the same racial profile — essentially encouraging racial segregation. Smith said that the housing group’s investigations have also uncovered evidence of discrimination by agents related to religion and sexual preference.
In a Tuesday announcement, Smith stated, “We have found egregious discrimination at every NRT company we have tested over the past three years.”
Zipf responded in his statement, “We take great issue with the statements made by Ms. Shanna Smith of the National Fair Housing Alliance about our company’s corporate culture.”
He also stated that NRT employees “follow a comprehensive code of ethics and key policies embedded at the root of the way we do business. NRT has a widely recognized diversity effort that is clearly visible in our sales and corporate offices to underscore our inclusive culture. To provide a comprehensive review of our fair housing policies, practices and enhance our current training for our sales associates, we announced in May a partnership with the National Community Reinvestment Coalition,” a civil rights organization.
After an investigation of real estate practices at Coldwell Banker Marietta, the National Fair Housing Alliance alleged in its report that “agents showed zero homes to African-American testers and 26 homes to white testers. Agents also made negative comments to whites about predominantly African-American communities.”
The group’s report recommends implementing a national testing and investigation program to “provide systemic assessments of real estate agents and companies,” an expansion of education and enforcement efforts, the creation of a whistleblower policy, and the creation of new funding sources to address segregation problems.
Smith said that real estate companies must do more to train agents and conduct qualified testing of agents “to make sure agents don’t continue these practices.” There should be damages paid by companies who are found guilty of discrimination, she said. “If you do (violate the law) it’s going to hit your bottom line.”