In an apparent act of solidarity that did not please lawmakers, all but one of the 68 agents and company representatives asked to appear Thursday at a New York State Senate hearing on housing discrimination failed to show, Newsday reports.
In response, the Senate Committee on Investigations and Government Operations announced subpoenas would be served to no-show agents to “compel their testimony,” according to Newsday, which revealed evidence of systemic violations of fair housing laws on Long Island during a three-year investigation.
“The remaining 67 individuals either neglected to respond or outright refused to provide testimony,” Sen. James Skoufis said, according to Newsday. “There’s an easy way to go about things and a hard way. So following today subpoenas will be served to many of these individuals to compel their testimony.”
The apparent boycott by agents spotlighted in the groundbreaking Newsday investigation is unlikely to do the industry any public relations favors as it copes with a maelstrom of regulatory threats and controversy that has only intensified since the Newsday investigation.
The lone industry representative to appear at the hearing was one of its most powerful: Ryan Gorman, president of Realogy’s NRT, the largest U.S. brokerage by sales volume.
Asked why Gorman appeared to break from the apparent boycott, a Realogy spokesperson said: “Realogy takes Fair Housing seriously, and we felt being responsive to the Committee was the right thing to do.”
The hearing helped initiate one of at least three government housing probes sparked by the Newsday report. New York State Governor Andrew Cuomo and Attorney General Letitia James have both announced investigations. And two legislators have unveiled a bill that would make it easier for a state regulator to suspend or revoke a real estate agent’s license.
Newsday‘s three-year investigation, conducted by testers who recorded meetings with real estate agents on Long Island, found that agents often steered homebuyers based on their race and required pre-approved mortgages from black customers, but not white ones.
Nearly half of African Americans and four in 10 Hispanic testers received unequal treatment by Realtors, according to the director of the Newsday investigation.
The Fair Housing Act, among other laws, prohibits steering, but the tested agents allegedly used subtle, rather than explicit, ways to discriminate against minority buyers.
At the hearing, which lasted five hours despite the apparent industry boycott, the co-founder of a housing justice group, and a consultant on the Newsday investigation, reportedly told lawmakers: “Violators have simply learned to conceal their discriminatory conduct.”
Gorman, the NRT CEO who was the only individual to show up at the hearing, told senators that he found the results of the investigation “severely disappointing,” and that he believed there was a need to provide m0re fair housing training to agents, according to Newsday.
“Under oath and for the record, definitely I and NRT were not aware of these practices,” he reportedly told a state senator who accused him of knowing about the alleged discrimination.
Realogy, the parent company of NRT, owns or is the franchisor of Century 21 Real Estate, Coldwell Banker Residential Brokerage on Long Island, the Corcoran Group and Daniel Gale Sotheby’s International Realtor, according Newsday. Newsday reports having tested agents affiliated with all of these firms.
Agents and representatives from the eight other Long Island brokerages whose agents were tested by Newsday did not show up. Those brokerages are, according to 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.
Many agents and brokerages have expressed disgust with the Newsday revelations. But some have kept mum on the issue. Fifteen of 26 brokerages asked by The Real Deal for their reactions to the investigation didn’t respond or declined to comment, according to The Real Deal. Of those 11 who did respond, most expressed outrage, The Real Deal reported.
Only one was defiant, with The Real Deal reporting that a representative with Douglas Elliman said Newsday‘s report was “unreliable, unethical, and unscientific attempt to create a news story where there is none.” The Real Deal reported that Douglas Elliman had a “zero tolerance policy” with unfair or illegal treatment of anyone.
The investigation has magnified a storm of controversy and legal action that was already bearing down on the industry. It’s been marked by both anti-trust class action lawsuits and a federal investigation, both of which threaten to bust up the industry commission-sharing system.
In the wake of the Newsday report, the Long Island Board of Realtors confirmed to Inman in November that it was opening an investigation of potential violations of the fair housing provision of the National Association of Realtors Code of Ethics.
In a statement to Inman, National Association of Realtors President Vince Malta did not comment on the apparent boycott on Thursday but touted the trade organization’s recently created 42-member Fair Housing Committee, which, he said, “will continue to promote and emphasize these critical national issues.”
“As we stated immediately following the report’s release, the National Association of Realtors was deeply troubled to review the results of Newsday’s three-year investigation into how real estate agents on Long Island treat buyers of different backgrounds, which do not reflect the ethical commitment made by 1.4 million Realtors nationwide,” Malta said in the statement.
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