Big-name brokerages among those accused of income-based discrimination in California

A housing watchdog group has filed more than 100 complaints that target more than 200 defendants for allegedly discriminating against potential housing applicants who sought to use Section 8 housing vouchers to secure a dwelling.

In 2019, California Gov. Gavin Newsom (D) signed a bill into law that bars “housing discrimination, including discrimination through public or private land use practices, decisions, or authorizations, based on specified personal characteristics, including source of income.”

The intent of the legislation was to “provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing,” according to the text of the bill.

But as many as 200 real estate agents, brokerage firms and landlords are alleged to have violated this law by discriminating against applicants with federally subsidized Section 8 Housing Choice Vouchers, according to an undercover investigation conducted by the Housing Rights Initiative (HRI).

A total of 112 complaints targeting 203 defendants were filed en masse with the state of California’s Civil Rights Department, HRI announced Tuesday. The defendants include some of the most prominent real estate companies in the nation — Coldwell Banker, eXp Realty, Sotheby’s International Realty and RE/MAX.

“Over the course of a year, HRI trained, equipped, and deployed an army of undercover investigators, who posed as prospective tenants with Section 8 vouchers,” HRI said in a statement. “These investigators contacted hundreds of brokers and landlords by text message to determine compliance with California’s fair housing laws.”

Among what it calls “completed tests” — in which the investigators were able to determine if a company accepted such vouchers — HRI said that investigators who sought housing with vouchers were discriminated against 44% of the time in the city of San Francisco. This figure rose to 53% of the time in Oakland, 58% of the time in San Jose and 70% of the time in Los Angeles.

The announced legal action included text messages that HRI said were obtained by the investigators, which they attribute to brokers at companies including eXp and Sotheby’s. These messages — submitted as evidence in the filings but not independently confirmed — appear to depict the relevant targets turning down a potential applicant when asked by the investigator if Section 8 vouchers were accepted for a particular listing.

When reached by HousingWire, a Coldwell Banker Realty spokesperson said that the company “advocates for fair housing practices and we offer enhanced training, awareness, and staffing measures to further promote equitable access to housing for all. We are reviewing the claims.”

HousingWire also contacted representatives of eXp, Sotheby’s and RE/MAX for comment but did not immediately receive a response.

HRI publicly released a Google Sheets document that lists each case of alleged discrimination, including timestamps, broker names, listings and screenshots of text messages.

“The goal of these filings is to get the real estate companies to stop their discriminatory housing practices and exacerbating California’s homelessness and affordable housing crisis,” HRI said in a statement.

“Furthermore, the result of HRI’s investigation underscores the need for proactive and systematic enforcement to combat housing discrimination and for the State of California to provide adequate funding for the California Civil Rights Department to meet the scale of the problem,” the group added.

A review of the texts posted online by HRI showed a variety of responses to direct questions about Section 8 voucher acceptance, with some brokers saying they didn’t want to go through the “hassle” of working with the program. Others said that the landlord for a particular property “wasn’t registered” with the Section 8 program. Another claimed that Section 8 was “not eligible” for a particular listing.

In 2018, research from the Urban Institute found that as many as 76% of Los Angeles-area landlords refused to accept Section 8 vouchers, a figure that rose to 82% in low-poverty neighborhoods.

In 2019, reporting by the Los Angeles Times said that the reasons given for landlords’ hesitance to accept vouchers included “concerns over red tape.” But the most common reason was said to be “simple economics: Property owners increasingly can charge more than the government is willing to pay.”