Manhattan Real Estate Industry Reacts to Fair Housing Laws

The buzz across the Manhattan real estate market is Vivian S. Toy’s article in The New York Times Questions Your Broker Can’t Answer, which addresses Fair Housing Laws and the very recent push by brokerages to make sure that their agents are complying with these laws.  Jonathan Miller has posted about it on his blog Matrix.  The Property Grunt chimes in too.  Even The Real Deal couldn’t resist passing along the link that covers this controversial topic.  Well I couldn’t resist either because the interpretation of these laws has indeed surprised me and many of my colleagues.

The strict interpretation of fair-housing laws prohibits brokers from providing information about people that could be construed as discriminatory in any of 14 protected categories. The categories include familiar ones like race, religion, sex and disabilities and less well-known ones like familial status, marital status, citizenship and occupation.

The challenge for those in my industry is not the obvious discriminatory categories like race, religion, sex, etc. but those like marital status and occupation do present a challenge.  The reason for this is almost solely due to the co-op housing market.  Part of the reason that Manhattan sellers hire a real estate professional is to help them navigate the co-op Board approval process and until some co-op Boards become more accountable for their  discriminatory actions, this navigation is nearly impossible.  Let me elucidate.

I happen to know of several buildings who boldly discriminate based on age, profession, and one that even takes issue with prospective purchasers who are pregnant because the Board assumes that the mother will not go back to work thus forgoing her income…LUDICROUS!!!!  Having said that, I MUST present all prospective purchasers to this Board despite my knowledge of their discriminatory practices even though I know that any of the candidates mentioned aboved will surely be rejected by the Board of Directors.  Can you say "waste of time?" 

“In my mind, it’s so restrictive it takes away part of the job that the public has relied on brokers to do,” Ms. Kleier said. “To be able to tell them: Is this building a place where I’m going to be comfortable? Or if my kids run through the lobby, am I going to be looked at cross-eyed?”

Brokers are often hired for their expertise in a specific neighborhood or building, and not being able to share certain information will make a broker’s job that much harder, she said.

Mr. Garfinkel said that Ms. Kleier is certainly not alone in her apprehension. “A lot of brokers are concerned about the push-back from customers who feel that, ‘You’re my broker — why aren’t you helping me and answering my questions?’ ” he said.

Again, the only way to remedy this situation is to somehow stop the co-op Boards from discriminating.  I sincerely believe that most of my colleagues follow Fair Housing laws to a tee particularly since this latest push by brokerages to point out every letter of the law.  I personally no longer (yes, my entire industry asked these questions of everyone in the very recent past) ask my client’s their profession, marital status, or blood line 😀  Keep in mind however that as agents, we often spend large amounts of time with our clients who often share information with us solely as a result of conversation and a comfort level (perhaps a friendship) that develops over time.  Disclosing any of this information during the course of the transaction is what is to be avoided. 

An example of what not to do as a real estate agent:

Yesterday, my wife and I traveled out to Boerum Hill, Brooklyn to take a look at an investment property.  I immediately let the agent know that I was a broker but I was not looking to receive any part of the commission.  Within 30 seconds the agent said the following:

• "The people who live in the projects live in the best apartments they have ever lived in."  Quite presumptious a statement no?
• "If they ‘misbehave’ they will be evicted and that’s a ‘great deterrent’ for the neighborhood."  My jaw was hanging open at this point.
• He also shared the public school information telling us that we would have to apply to get into the "better of the 2 schools."  I’m sure he would have shared why one was "better" if we asked but I was afraid to hear what would come out of his mouth.

Obviously, he hasn’t been briefed on Fair Housing Laws and I suspect he’s going to get himself in a lot of trouble hopefully sooner rather than later.

In the meantime, we in the real estate industry ask fewer questions and let buyers make up their own minds about where they should live.  Go figure…a buyer making their own call…what a novel idea!