Compass must waive broker fees for the first 25 Section 8 renters who lease a property through the brokerage, said New York’s Attorney General, as part of the new terms to an April housing discrimination settlement.

After reaching an initial settlement in April with watchdog group Housing Rights Initiative (HRI) for discriminating against low-income New Yorkers, Compass is finding itself in the crosshairs of New York Attorney General Leticia James once again.

James announced on Monday that her office added three new stipulations to the April settlement where Compass agreed to offer higher commissions for Section 8 lease transactions and launch a tenants’ rights and housing voucher education program for brokers and new landlords.

With the update, Compass must also waive any broker fees for the first 25 applicants with Section 8 vouchers, update its employee trainings, and openly advertise they accept housing assistance vouchers.

Attorney General Leticia James | Credit: NY AG Office

“Landlords and brokers who deny housing to tenants because of their source of income are exacerbating the housing crisis,” James said in a statement on Wednesday. “No tenant should be turned away from an apartment because they have a housing voucher.”

“This agreement will ensure that Compass does not close its door on New Yorkers who are simply looking for a place to call home,” she added. “My office will continue taking action to protect New Yorkers from unfair housing practices and hold those violating the law accountable.”

HRI filed its suit against Compass and 87 other brokerage firms and landlords in March 2021, after a year-long investigation that revealed widespread discrimination against renters using Section 8 housing vouchers to cover a portion of their rent.

HRI investigators, who posed as prospective renters, contacted 477 real estate agents and landlords and asked about the process of applying for a unit as a housing voucher recipient. Investigators’ application requests were often denied, as brokers and landlords refused to work with voucher recipients who they deemed “less qualified” than non-voucher applicants.

Although federal law does not prohibit landlords from rejecting housing vouchers, both New York City and New York State have laws protecting renters from income-based discrimination. According to the New York City Housing Authority’s latest estimate, 125,000 households rely on Section 8 Housing Choice Vouchers.

In December 2021, the New York City Council expanded voucher values to account for booming rental growth. The max voucher value for a one-bedroom apartment rose from $1,265 to $1,945 per month, and the max voucher value rose from $1,580 to $2,217 per month. Voucher recipients are responsible for paying the remaining 30 percent of their monthly rent, City Limits explained.

HRI Founder and Executive Director Aaron Carr said he’s pleased with the updated settlement terms, which he said will prevent low-income tenants from experiencing “inhumane” treatment amid a rent crisis.

“Today’s settlement with one of the largest real estate companies is an important step to ending widespread housing discrimination and protecting vulnerable tenants in New York,” he said in a press release. “Denying housing to tenants just because they have a housing voucher is not only illegal, but also inhumane. I thank Attorney General James and her team for everything they do to protect tenants and taxpayers.”

Added New York City Council Member Julie Menin of the settlement, “Real estate brokers that violate income discrimination laws by refusing to process rental applications involving housing assistance vouchers will be held accountable. Our city is going through an affordable housing crisis, and it’s unconscionable to automatically reject low-income applicants.”

In a statement to Inman, a Compass spokesperson said the brokerage has diligently followed all settlement terms thus far and is happy to move past the case.

“We are pleased to have been able to work with the New York Attorney General collaboratively to put this matter behind us,” they said.

Read the updated settlement below:

 

Email Marian McPherson

Compass
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