Newsday's probe into housing discrimination on Long Island still has the real estate industry reeling

When Gov. Kathy Hochul and Attorney General Letitia James announced agreements with a trio of Long Island real estate firms to settle claims of housing discrimination last month, they credited the investigative work of the news organization Newsday.

In 2019, Newsday published “Long Island Divided,” the results of a three-year, multi-platform investigation that uncovered “widespread separate and unequal treatment of minority potential homebuyers and minority communities,” by real estate firms and brokers across the island.

But the story did not end there.

As Hochul and James explained, the Newsday investigation laid the foundation for subsequent state investigations. Those probes allegedly exposed the same kind of wrongful conduct, such as steering potential buyers of color – actually trained actors posing as buyers – away from white neighborhoods, or subjecting the nonwhite buyers to different requirements than white buyers.

Three firms – Keller Williams Greater Nassau in Garden City, Keller Williams Realty Elite in Massapequa, and Laffey Real Estate in Greenvale – agreed to pay a combined $115,000, to settle charges of housing discrimination, without admitting any wrongdoing.

Weekend All Things Considered host Tiffany Hanssen recently discussed the state investigation – and Newsday’s table-setting work – with Keith Herbert, Newsday’s assistant managing editor for investigations.

Their conversation below has been lightly edited for clarity.

Tell me a little bit about the process for the Newsday investigation, and then ultimately what it revealed.

It was November 2019 when Newsday published “Long Island Divided.” Basically it's an examination of the residential housing market on Long Island, in Nassau and Suffolk counties. And what we did is, we got community people, some actors, and trained them to go out and act as homebuyers as part of a paired-testing examination of the housing market. (These paired “homebuyers” – one nonwhite tester and one white tester – were each given the same financial profile, but each approached the same real estate agent separately; their interactions were then secretly recorded and compared.) And what we found was that in 40% of the tests that we did, we found that there was evidence of disparate treatment between a white tester and a minority tester. And when we looked more closely at just the tests involving African Americans, that number rose to 49%. When we looked at just the test for Hispanics, the number for disparate treatment increased to 39%. And, for Asians, it was 19%.

Under the settlement that Hochul and Attorney General James announced, these three firms agreed to pay $115,000 for fair housing enforcement efforts, and for compliance and training. Are there any other shoes to drop here?

Well, it's really hard to know. But we do know that there were parallel investigations by the attorney general and the New York Department of State that looked at the evidence that Newsday published in its three-year investigation. As a result of those parallel investigations, we know that some of the individual agents that Newsday identified as being problematic – from the standpoint of their tests uncovering evidence of disparate treatment – led to the state to investigate their actions and perhaps take disciplinary action – either a fine or an action against individual real estate agents' licenses.

In her statement announcing the settlements, Hochul said New York has "zero tolerance" for discrimination. Did your investigation show that to be the case?

What we found early on in our investigation was that it seemed that real estate agents on Long Island were lacking when it came to fair housing standards. We uncovered evidence that the training was deficient, that some of the agents themselves either knew or were unaware of how you can talk about school districts, for example, and avoid being charged with violating fair housing standards.

If you're neutral about how you talk about a school district, or you direct a homebuyer towards independent data about a school's performance, you won't run into trouble with the fair housing standards. But what we found is, as a matter of routine, many agents on Long Island were talking about the quality of school districts, in a way that led them to run afoul of the fair housing standards.

So, would you characterize these agents as confident they could engage in these practices and get away with it?

We got a sense that there did seem to be some impunity with which they acted in certain instances. We found that in probably the two decades before we did our testing, that there had been very few actual tests done by government agencies, like the Department of State, which licenses real estate agents, or other government agencies, like, for example, the Attorney General’s Office. We couldn't find evidence that many tests had been done.

Does that mean also there hadn't been any penalizing action against them either?

We didn't find evidence that anyone had attempted to do what we did, which was widespread testing. We did 86 of these paired tests over 18 months of testing. We didn't find any evidence that this widespread, kind of detailed examination, really an audit of the housing market for fair housing standards, had been done for years.

We know about the settlement that the governor and the attorney general announced, but, beyond that, do you feel anything has changed?

I do think that the real estate industry on Long Island has taken the results of our investigation seriously. They immediately came out and pledged – at least the Long Island Board Realtors – to do more from a training standpoint, and to make sure that their training was up to date with the current fair housing standards -- state, local, and federal laws. The larger group that operates in Albany, and represents the umbrella of real estate companies in the state, committed to the same thing, doing their own training and updating their training standard. So, if nothing else, the investigation got the attention of the industry. I think that will serve homebuyers well going forward.

Keith, thanks so much for taking time to talk over the investigation with us. We really appreciate it.

Good to be with you.