The agents associated at the firms allegedly steered prospective homebuyers of color away from white neighborhoods, subjected them to different requirements than white homebuyers, and otherwise engaged in biased behavior.
Following an investigation conducted by Newsday, state officials opened parallel investigations into Keller Williams Greater Nassau, Keller Williams Realty Elite and Laffey Real Estate that officials say confirmed they engaged in discriminatory practices that violated state and federal fair housing laws.
"Efforts to discriminate against any New Yorker's fair access to housing cannot, and will not, be tolerated," James said. "These investigations have uncovered a pervasive culture of allowing unlawful discrimination and violations of every New Yorker's right to fair housing. These settlements should send a clear message: if you discriminate and deny New Yorkers their basic right to housing, we will take action. I thank Governor Kathy Hochul and her administration for helping address these unacceptable housing discrimination practices on Long Island and throughout our great state."
In some documented cases, officials say agents were recorded showing preferential treatment to white homebuyers, disparaging neighborhoods of color, and directing homebuyers of color to homes in neighborhoods where residents predominantly belonged to communities of color.
As part of these agreements, the brokerage firms are required to spend more than $115,000 to remedy their discriminatory practices and undergo regular fair housing trainings.
"With these actions, we're delivering a forceful message: New York state has zero tolerance for discrimination," Hochul said. "Here in New York, we firmly believe that housing is a human right and I thank Attorney General James and Secretary of State Rodriguez for their work to enforce our laws and protect that right for all New Yorkers."
The investigation into Laffey Real Estate found that the agency required a potential Black homebuyer to obtain a preapproval letter from a mortgage lender before he was shown a home, while the same standard was not applied to a white homebuyer.
A Laffey agent also lectured a Hispanic potential homebuyer about his finances, suggesting that he limit his search to an area he could afford without any insight into his financial situation. The same agent did not give the affordability lecture to a white homebuyer looking for homes in the same neighborhood and instead steered him towards neighborhoods that were less diverse.
"Do you want your kids to be in school with kids that they relate to?" the agent reportedly asked.
Based on thorough review of evidence collected throughout the investigation, the Attorney General's Office determined that Laffey agents unlawfully discriminated against homebuyers based on race, color, and national origin, in violation of the Fair Housing Act.
The Keller Williams offices also engaged in illegal and discriminatory housing practices, authorities alleged.
For example, one agent warned a white potential homebuyer against a particular neighborhood, citing recent gang violence, but then proceeded to tell a Black potential homebuyer that the same area has "the nicest people."
The Black potential homebuyer was also directed toward predominantly non-white areas more than the white potential homebuyer, in a practice known as racial steering.
One Keller Williams agent required a Black potential homebuyer sign an exclusivity agreement before touring homes, but showed properties to a white potential homebuyer immediately, without any mention of such an agreement.
In another instance, the agent told a white potential homebuyer to avoid school districts where a majority of the students were of color, saying they were not good schools, and even admitting to the potential homebuyer, "Legally, I get in big trouble if I (tell you this)."
The Attorney General's Office concluded that all three agencies violated the Fair Housing Act and the New York State Human Rights Law.
An investigation into another real estate brokerage is ongoing.
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