Today, Explained - Unfair housing

Episode Date: June 30, 2021

A housing watchdog says real estate companies often discriminate against low-income tenants who use federal rental assistance. Now it’s suing. Transcript at vox.com/todayexplained. Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Hi, who is this? Hi, my name is Paola. Who? Paola. I saw Too Bad on Trulia at 181 Park Ave. Okay, okay. Could I ask you how your credit is? Yeah, I have a 730.

Oh, awesome. And how's the income? I'm working right now. I'm currently making like $40,000. And I also have a Section 8 voucher. It'll help me pay for the rent if I'm able to use it.

Yeah, they didn't do Section 8 there, though. That's the problem. Oh, okay. Yeah. All right. You just heard a phone call between a prospective tenant and a real estate broker in Westchester. Westchester is a suburb of New York City, for those of you who haven't had the pleasure. The broker was a real person.

The prospective tenant was a plant. She was calling that broker to see whether she'd be turned away because of her Section 8 housing voucher. And she was. And that's why Aaron Carr is filing a lawsuit today. That broker clearly, unequivocally, undoubtedly, illegally rejected our tenant and broke fair housing laws. Aaron's the executive director of an organization called Housing Rights Initiative, which means his life's work is ensuring people have a fair shot at housing. So our organization is proactively and systematically investigating landlords that are breaking fair housing laws. You know, our organization is filing a sweeping lawsuit against 36 real estate companies for illegally discriminating against low-income tenants with housing vouchers. The New York State and about a dozen other states and dozens of other

localities across the country, it is illegal for brokers and landlords to reject prospective tenants for using rental assistance. And nonetheless, we have received over the years like a litany of complaints alleging housing discrimination. To combat this problem, our organization launched an undercover operation to catch real estate companies engaging in mass civil rights violations. Our organization trained investigators like the one you just heard, and we provided them with representative profiles like low-income Section 8 recipients, and we scoured real estate listing websites for voucher-eligible apartments. Hello? Hi, is this Rajasmeer? Yes.

I'm calling about a listing I saw on Trulia. And on these recorded calls, our undercover investigators would ask questions, right, that most tenants would ask, right? Like, how much are the utilities? What's included in the rent? Would there be a time I could go see the apartment? Um, like, possibly tomorrow? And then towards the end of the call.

So my credit's around $720,000. And then income is around probably like $25,000 a year. They would pop the million dollar question, right? Do you accept rental assistance? I would be using a Section 8 voucher for the apartment. And in many cases, the answer was no. They're not taking Section 8 there. They won't accept my Section 8 voucher?

Mm-hmm. Oh, okay. So these landlords, these brokers, this real estate industry factually, undeniably, and unequivocally broke the law, all on a recorded line. Can you explain what a Section 8 voucher is? The Section 8 program, for all its faults, is one of the most powerful and effective affordable housing and anti-poverty measures in the United States of America, hands down. The tenant pays 30% of their income in rent, and the government pays the rest up to a legal maximum. There was a six-city study conducted by HUD.

And HUD's the U.S. Department of Housing and Urban Development. So one six-city study of over 8,000 families compared those who received vouchers with those who did not and found that vouchers reduced homelessness by 75%, reduced the share of families living in overcrowded conditions by over half, and reduced the average number of times that families move over a five-year period by close to 40%. It's also an anti-poverty tool, lifting over 3 million people out of poverty each year, including over 900,000 children and over 600,000 elderly people, which is more than any other government program except Social Security. But it's very important to remember that the

success of the Section 8 program is predicated on brokers and landlords accepting Section 8 vouchers. So in other words, the voucher is only worth something if tenants can find real estate companies that are willing to take it. And one takeaway from our nearly year-long investigation in Westchester is that housing discrimination against low-income tenants is alive and well in the United States of America. Is it possible that smaller landlords who are maybe trying to rent out like a second property or something don't know that saying no to Section 8 vouchers is illegal? Could this be a somewhat innocent mistake or at least like an ignorant mistake? I think it's usually knowingly discriminatory, but obviously there are small landlords who just don't know, and we should educate those landlords, right? We need many tools in the toolbox, right? We need to educate landlords, and we also need to enforce our fair

housing laws. Because whether a landlord or a broker knows or doesn't know if it's illegal to discriminate against Section 8 tenants, that doesn't help the tenant who is being discriminated against. The tenant who's being discriminated against now loses an opportunity to gain housing and now loses an opportunity to get out of homelessness and now loses an opportunity to be able to live to their true individual potential. So the reason to me doesn't matter as much as the outcome. Yes, we need to educate real estate, but real estate also needs to follow the law. And your organization is trying to make a point with these phone calls, which might sound like entrapment to some people, but these tester calls and similar strategies

have a rich history in this country, right? Yeah, I mean, so we can talk about the history of housing tester programs and how they've been used to prove discrimination. Testing in housing gained steam during the 60s and 70s, right, as local, state, and federal governments passed fair housing laws and private housing groups, right, like streamlined their testing methods for enforcement. We sent Negroes in large numbers to the real estate offices in Gage Park every time Negroes went in. The real estate agents said, oh, I'm sorry, we don't have anything listed. And then soon after that, we sent some of our fine white staff members into those same

real estate offices, and the minute the white persons got in, they opened the book. Oh, yes, but we have several things. Now, what exactly do you want? And fair housing testing was actually upheld by the Supreme Court in 1982 and allowed individuals to sue landlords

for violating the Fair Housing Act. When Section 8 housing vouchers are denied, who is actually being turned away from housing, be it in Westchester or elsewhere across the country? The vast majority of Section 8 tenants are families with children, the elderly, and the disabled. And when families are able to use their vouchers, they spend less on rent and more on things like food,

and on transit, and on healthcare, on education, and surviving, and most importantly, on living. What's up with all the Section 8 haters in a minute on Today Explained? Thank you. limited photos and videos directly from your phone to the frame. When you give an AuraFrame as a gift, you can personalize it, you can preload it with a thoughtful message, maybe your favorite photos. Our colleague Andrew tried an AuraFrame for himself. So setup was super simple. In my case, we were celebrating my grandmother's birthday and she's very fortunate. She's got 10 grandkids and so we wanted to surprise her with the Aura Frame. And because she's a little bit older, it was just easier for us to source all the images together and have them uploaded to the frame itself. And because we're all connected over text message, it was just so easy to send a link to everybody.

You can save on the perfect gift by visiting AuraFrames.com to get $35 off Aura's best-selling Carvermat frames with promo code EXPLAINED at checkout. That's A-U-R-A-Frames.com, promo code EXPLAINED. This deal is exclusive to listeners and available just in time for the holidays. Terms and conditions do apply. Jerusalem Dempsis, you're a policy reporter here at Vox, and you've been reporting on this lawsuit that the Housing Rights Initiative brought forth in New York State Court today. Tell me, how widespread is this issue of discriminating against Section 8 voucher holders outside New York? It's a really big issue. Section 8 vouchers are used in every single state in the country and, of course, the District of Columbia. And source of income discrimination

laws themselves, though, are pretty muted. So there's about 15 states that have these types of laws that ban source of income discrimination and then a bunch of other localities like cities and counties that have had their own regulations as well. But the actual problem of discrimination is pretty widespread, even though it's understudied. There was a HUD and Urban Institute study that looked at several different cities across the nation and found incredibly high rates of discrimination in Los Angeles, Philadelphia, which is a place that has a source of income discrimination law. So Section 8 is a federal program, but something like 15 states only have programs outlawing

discrimination based on Section 8. Is that right? Yeah, exactly. Would it be easier to just have a federal law that says you can't discriminate based on Section 8 housing? A federal law necessarily would not solve the problem. What we've seen in several states, including New York State, of course, in this case, is that even enacting a source of income discrimination law does not eliminate discrimination. I mean, that's true of all discrimination. I mean, it's illegal to have racial discrimination in the housing market. It's illegal to discriminate against people due to their familial status. But we see that sort of thing happening all the time.

So it is important and it's a necessary step to have these kinds of laws, but it's not going to solve the problem by itself. Is there something that would solve the problem by itself? There's no way we're ever going to get to a world where there is absolutely no discrimination against low-income tenants or anything like that. But there's a lot we can do to redesign the Section 8 program to really reduce this type of discrimination. So a lot of landlords have some pretty reasonable concerns with working with public housing authorities, which are the government entities that actually administer these programs locally. These concerns range from they have to have inspections being done by a government employee and that can take a long time to set up. Essentially it can take a month or a month and a half extra to take on a voucher holder than it

would to take on someone without a voucher. And that means that the landlord is sitting on an empty unit not getting rent for that amount of time. There are also other problems, like there's inconsistencies sometimes with what types of things makes a property fail an inspection. Some people I talked to said that very simple things like someone didn't have the proper signage

on the front of the house or in front of the unit made them fail the property. And so that person was not able to move into that unit. So I think that there is there's a lot that can be done. There's nothing inherent to the Section 8 program that would make it so bureaucratically difficult for people to work with. And so ensuring that, you know, these public housing authorities are fully staffed so they can actually get to these apartments or to these homes quickly and finish an inspection and make sure that landlords aren't suffering like a month or more of unpaid rent, that could reduce source of income discrimination a lot. Because when you think about it, there's a lot of benefits that come to the government

paying part of your rent. You know it's consistent. You know the federal government is going to be good for it. So there are a lot of issues there on the front end that could be solved. And removing these kinds of excuses would make it such that, A, landlords are more likely to want to have Section 8 tenants, and also would make it easier to weed out which landlords are actually just operating from a place of bias against the types of people who live in Section 8 housing, or potentially they're using Section 8 as a code word for, I don't want to have a black tenant, or I don't have a single mom tenant, which are, of course, illegal under the Fair Housing Act. And we heard from Aaron earlier that some smaller

landlords might not know denying a Section 8 voucher is illegal. I mean, I don't want to defend people who are willfully discriminating, you know, intentionally, but we can assume that someone who isn't familiar with the law, who's renting out a unit for the first time and isn't landed gentry with a legal team behind them, might not know all about Section 8. How do we make this program accessible for people who aren't professional landlords? Firstly, this is not just a Section 8 issue. It's largely a fair housing issue. A lot of small landlords either don't know or don't comply with fair housing law, pleading ignorance. And also, it's just really, really hard to systemically engage with small landlords.

Like, right, like you can go to a big rental company and then talk to them. And then that's a good use of your day as a government employee because you've affected the lives of maybe 10,000 renters or tenants. But, you know, going case by case to landlords that have like four units or 10 units, and there's not even in many cities a database of all of these landlords where that you can turn to easily and like kind of go through and call them. So I think there's a lot of oversight that hasn't been done of landlords for a long time. The reason why these smaller landlords are able to allow their individual biases and their discrimination against these types of tenants or their unwillingness to engage this kind of

bureaucracy is because there are dozens of tenants vying for any individual affordable housing unit. There's such a shortage of affordable housing in this country such that landlords have their pick of the litter each time. And so landlords are allowed to have and are incentivized to have their biases play out because they know that if they're rude to a tenant, if they're unwilling to accommodate a tenant's disability, they have biases against a type of single moms or people with large families or certain races or religions, that they're certain to find another tenant that will fulfill whatever

their vision of what a good tenant is. And because of that, that puts tenants in a really, really hard spot. And ensuring that there is enough affordable housing such that tenants are the ones with the power, actually, and landlords are the ones going after tenants and trying to sell themselves to tenants would ensure that small landlords become more attuned to these types of laws. They'll be searching for tenants. If a tenant says, I pay with a voucher, that landlord will go home and do the homework to figure out how to use a voucher. We'll call up the public housing authority to make it work because they're worried about losing their income if they don't fill that unit. Do you remember Clear Channel, Jerusalem? No, I don't know what that is. What is that?

Clear Channel was this advertising conglomerate that everyone hated. So they changed their name to I Heart Media. No, really? Have you heard of I Heart Media? Yes, of course. I wonder if they changed the name of Section 8 to like I Heart Houses, just overhauled the whole thing, if it would land better. They did do that. They did? Yeah, they did. The government started referring to them as housing choice vouchers. There was a, you know, they noticed a large rise in kind of using the term Section 8 as a code word for like, you know, an undesirable tenant, particularly black tenants or single family, single mom families. And, you know, they started calling them housing choice vouchers. So if you look at press releases from the Department of Housing and Urban Development or other places, they do not say Section 8 vouchers.

They say housing choice vouchers. And I guess that didn't totally work either. No, it did not. I think they got to go further. They got to go I heart housing or something. Is there a way to just rehaul this program in an even greater way, not just a superficial name change, but just completely rethinking how we can provide landlords, landowners with housing vouchers to help impoverished people. Yeah, I mean, over the last year, we've seen the power of giving people money when they're in distress. You give people money, poverty declines, hunger declines. People pay their rent. They don't go and just spend it on random things. We saw, even though there's been rightly a lot of discussion about people who are unable to make rent over the last year, the vast, vast majority of people made their rent.

And they did that with the checks that were provided from the federal government, the stimulus checks, and of course, the unemployment insurance that was provided by the federal and state governments as well. So there's no reason why these vouchers need to go through landlords. We could make this a direct payment payable to qualifying low-income tenants. And doing that would ensure that A, landlords have no ability to discriminate based on your source of income because they're not included in the process. And B, would also ensure that tenants themselves have the flexibility to work with the public housing authority and not have to worry about how they're going to so that tenants were not continuously being taken advantage of because they didn't have the government kind of with them along on the process. But there's easy ways to design this program such that you are providing a cash benefit to the tenant but also requiring that they do specific things in order to receive that cash benefit. And so working with the public housing

authority to figure out where you're going to live and make sure that it's a place that is clean and doesn't have lead paint in the walls and isn't going to be set on fire. I mean, that's all things that tenants would want. And so working with them rather than making it a situation where you have to work directly with the landlord is a way to really cut out a lot of this discrimination and also make it a much more efficient benefit for the tenant themselves. Has the federal government said anything in response to this investigation, to these lawsuits we heard about early in the show? Is there political will right now to take this on?

It does not seem to be a top priority for the Biden administration right now or for Democrats or in Congress. But the goal is that with these sorts of lawsuits, that it will inspire more action, both from state's attorneys general that will see the efficacy of going after brokers and real estate agents that are violating the law in their states. And also one of the big things that works for organizations is that donors will see the efficacy of this type of action. And so, you know, it seems right now that a lot of the movement is going to be done on the private action side. It's going to be civil rights organizations and lawyers really pushing the envelope here.

But it is always available for the federal government to step in. Thank you. Rhodes, President Biden's out here saying child care is infrastructure. So we want to hear about your experiences with child care or the lack thereof. Do you have a story you would like to share about the lack of affordable child care in your town or city? Send us an email today. Explained at Vox dot com. Thank you.