Cuomo orders probe into real estate discrimination on LI after Newsday investigation

Gov. Andrew M. Cuomo ordered a state probe Thursday into reports of widespread discrimination by real estate agents, citing Newsday’s three-year investigation into housing bias on Long Island, and an official said the state would review Newsday’s hidden-camera videos of agents for evidence of illegal conduct.

Cuomo directed three state agencies — overseeing civil rights complaints, affordable housing and the licensing of real estate agents and brokers — to launch a joint investigation into housing bias. He also announced a new social media campaign to raise awareness of housing bias, a new housing discrimination hotline where home-seekers can file complaints, and new state regulations requiring real estate agents to make more disclosures to prospective home buyers and renters about fair housing laws.

“New York State does not tolerate discrimination of any kind, especially when it comes to an individual’s right to safe, affordable housing,” Cuomo said in a statement. “While we have already made significant strides, new reports about alleged housing discrimination across Long Island are deeply disconcerting and require immediate action."

The administration said the investigation would include reviewing information and data published by Newsday for possible disciplinary action against individual agents. In its "Long Island Divided" investigation, Newsday made public undercover video recordings of the full meetings between agents and paired testers in the 34 cases where two nationally known fair housing experts saw evidence of disparate treatment or other potential violations of fair housing laws.  

“We are definitely going to be using the material compiled by Newsday as a basis for investigation,” said a top official who asked not to be identified. The official added, “We are going to go wider than that,” potentially using the subpoena power of the Division of Human Rights to examine the practices of agents and their companies. 

“We’ll go wherever the evidence takes us,” the official said.

Newsday’s three-year investigation made use of undercover paired testing, in which equally qualified testers of different races meet with the same real estate agent to see if there’s disparate treatment. Eighty-six tests were done.

In 40% of the 86 tests, the fair housing experts Newsday consulted agreed that evidence suggested that brokers subjected minority testers to disparate treatment when compared with white testers.

Video and audio recordings made during those 34 tests were posted on Newsday.com as part of an online presentation of the investigation, as were maps of listings the agents provided to testers when relevant.

Among the videos posted, for example, is the test of Signature Premier Properties agent Anne Marie Queally Bechand.

“I won’t do it,” Queally Bechand said in refusing to take a black customer to tour homes unless the customer produced proof that she had been prequalified for a mortgage loan. Queally Bechand provided a tour for the paired white tester, who also lacked prequalification.

In another recording, Keller Williams Realty agent Le-Ann Vicquery told a black tester, “Every time I get a new listing in Brentwood, or a new client, I get so excited because they’re the nicest people.” She emailed the paired white customer, “please kindly do some research on the gang related events in that area for safety.”

Vicquery declined to comment. Queally Bechand did not respond to requests for comment.

Cuomo said state agencies "will release new regulations, protocols and other information to further protect renters and homeowners against unlawful and discriminatory treatment. These initiatives are critical to continuing our efforts to create a truly accessible and inclusive New York State.”

Fair housing advocates welcomed the investigation.

“If the governor is standing up and saying, ‘look, this is not acceptable,’ there is an opportunity to really put some real accountability in place,” said Elaine Gross, founder and president of Syosset-based ERASE Racism.

Gross said she believes the state has not done enough to enforce fair housing laws. Housing discrimination, she said, “hasn’t received the attention that it needs to, and as a result people continue to break the law and continue to act in ways that are not in accordance with their license.”

In an interview, state officials said the state Division of Human Rights, which enforces New York State anti-discrimination laws; the Division of Homes and Community Renewal, which works with housing providers to construct and preserve affordable housing; and the Department of State, which licenses real estate agents and brokers, will investigate Newsday’s findings that real estate agents showed evidence of steering clients toward certain neighborhoods and engaging in other discriminatory conduct.

The Division of Human Rights has an enforcement unit that can issue subpoenas and do field visits, and the agency will review all the materials Newsday gathered and conduct additional investigatory work, officials said. State officials declined to say whether the probe would include paired testing, saying they did not want to disclose the details of their law enforcement strategy.

There are no plans to increase the division’s budget, officials said. The Division of Human Rights “has the means and does have the authority within its budget to do this,” a state official said. “We have more than adequate resources.”

The three agencies are embarking on a public education campaign, which could include posters on subways and on the Long Island Rail Road, as well as messages on social media outlets such as Facebook, Twitter and Instagram, officials said. State officials said they will also require real estate brokerages to post information in their offices about fair housing laws.

In addition, the Division of Human Rights created a new hotline (844-862-8703) where consumers can file complaints and receive information about their fair housing rights.

Officials said the three agencies will coordinate their probe with the office of state Attorney General Letitia James. The attorney general said Tuesday her civil rights bureau will investigate evidence of unequal treatment of minority prospective homebuyers by real estate agents. The bureau enforces state and federal fair housing laws, and its work can result in civil penalties.

The conduct of Long Island real estate agents and companies identified in Newsday’s investigation is now under the scrutiny of both the executive branch, which enforces the licensing and training of agents, and the legislative branch, which has scheduled committee hearings next month on Long Island to take testimony and gather material that could be made into new law, such as increasing the fines and penalties for violations of fair housing laws.

State Sen. Kevin Thomas (D-Levittown), chairman of the Senate Standing Committee on Consumer Protection, which will take part in the hearing, said it will "help the Senate Democratic majority advance specific legislation to combat the unacceptable discrimination uncovered by the Newsday investigation."

Ingrid Gould Ellen, faculty director at New York University’s Furman Center for Real Estate and Urban Policy, said it is “very difficult to detect discrimination without formal testing.”

Even if testing is done on a small scale or by email, it is an important part of fair housing enforcement, she said.

If there’s random, paired testing, “everybody is on watch that it could be them, even if it’s a very small probability," she said.

"But also, the results can be released and be relatively high-profile," she said. "That will also serve to get the word out that we’re serious about this. This law exists, this kind of behavior is illegal and we’re watching and prepared to enforce the law.”

By Maura McDermott

maura.mcdermott@newsday.com,keith.herbert@newsday.commauramcdermott,

Maura McDermott is a reporter on the investigations desk. Since starting at Newsday in 2012, she has also covered real estate and the business of health care.