HUD Reaches Agreement with Owner Over FHA Violations

HUD recently announced that it entered a voluntary compliance agreement with a housing provider in Brooklyn, N.Y., to resolve a compliance review concerning non-discrimination in marketing and tenanting procedures. The 558-unit multifamily site is comprised of studio and one-bedroom units and provides HUD-assisted units through the Section 8 program for families with a member who is 62 or older or has a disability, including otherwise qualified families with children. 

One level deeper: HUD’s Office of Fair Housing and Equal Opportunity (FHEO) conducted a compliance review under civil rights laws, Title VI and Section 504. FHEO opened the review based on information indicating disproportionately low participation rates of Black and Hispanic residents relative to the housing market area over decades, extending to prior owners of the site. The review sought to ensure eligible persons were not discriminated against in opportunities to learn about, apply to, and reside in HUD-subsidized housing on the basis of race, color, or national origin. 

FHEO’s review revealed the site’s occupancy standard restricted occupancy of studio units to a family size of one and one-bedroom units to a family size of two, contributing to denials based on race and deterring families as small as two persons from applying to the site. FHEO expanded the review to include Section 504 when the investigation revealed the property had a practice of denying families with heads of households under 62 years of age, without considering whether the household was otherwise eligible to apply to and reside in the property on the basis of disability.

What’s next: Under the agreement, the owner will place $510,000 in a fund to compensate individuals who were either denied due to the restrictive occupancy policy, or individuals with disabilities who were improperly denied housing. And the owner agrees to not adopt an elderly preference and consider equally for tenancy otherwise qualified applicants with disabilities and applicants aged 62 or over. The owner will revise the property’s occupancy policy to be no more restrictive than local ordinance.

In addition, there will be a new waitlist after robust marketing to those least likely to apply. The owner is committing a minimum of $10,000 towards advertising, outreach, and website development.