Lawmakers criticize agents named in Newsday investigation; agents deny bias

Lawmakers criticized real estate agents’ treatment of minority homebuyers on Long Island at a State Senate hearing Thursday focusing on Newsday's "Long Island Divided" series on housing bias, even as the agents insisted they did not discriminate.

The Senate took the unusual step of issuing 31 subpoenas requiring testimony by agents from some of the largest brokerages on Long Island after 67 of 68 professionals who were invited to appear at a previous hearing declined to attend. The subpoenaed agents were originally scheduled to testify in April, but that hearing was delayed due to the coronavirus pandemic.

Four people affiliated with Realty Connect USA failed to respond to the subpoenas for Thursday's hearing. A Senate attorney was sent to state Supreme Court Thursday to resolve the matter, State Sen. James Skoufis (D-Cornwall) said, and the four are expected to testify at a hearing on Sept. 25.

Legislators "are taking this issue extremely seriously," said Skoufis, chairman of the Senate Committee on Investigations and Government Operations. A subpoena, he said, "is not something that folks can just sort of thumb their nose at."

During the first panel of Thursday's seven-hour hearing, Skoufis asked Douglas Elliman’s Long Island CEO, Ann Conroy, whether any agents at the brokerage had been disciplined since the publication of Newsday’s three-year investigation into housing discrimination on Long Island, which found evidence that agents from 10 of the Island's largest brokerages subjected minority homebuyers to discriminatory treatment.

The investigation included paired tests, in which prospective buyers with similar financial qualifications but different races or ethnicities met with agents. In 40% of the tests, evidence suggested that brokers subjected minority testers to disparate treatment when compared with white testers, with inequalities rising to almost half the time for Black potential buyers. Black testers experienced disparate treatment 49% of the time — compared with 39% for Hispanic and 19% for Asian testers. Newsday relied on two nationally recognized experts in fair housing standards to evaluate the agents’ actions.

Numerous government agencies have taken action since the series was published. The New York Department of State, which licenses real estate agents, has launched 35 investigations and issued regulations requiring agents and brokers to notify prospective buyers, sellers, renters and landlords about anti-bias laws. The Division of Human Rights created a fair housing hotline where callers can file complaints: 844-862-8703.

Conroy said Douglas Elliman had met with each agent named by Newsday, reviewed the videos and other evidence with attorneys from outside the firm and concluded that no discipline was necessary.

"We did not see any violation of fair housing, so what would we discipline them for?" Conroy said. "And we had attorneys look at them for the very reason that we didn’t want to be emotionally involved."

Conroy also said the brokerage has increased its own fair-housing training requirements, which include tests to make sure agents understand the material.

Skoufis said he found it "remarkable" that "not a single agent faced disciplinary action."

State Sen. Kevin Thomas (D-Levittown) said it "baffled" him that Conroy and the Douglas Elliman agents who spoke at the hearing seemed to "justify" the agents’ conduct.

"You guys are not supervising these sales agents, to the point where they don’t seem to know right from wrong," Thomas said.

In one video clip shown during the online hearing, agent Francia Perez — who is now with Douglas Elliman’s Massapequa Park office but was affiliated with RE/MAX when she was tested — provided a white prospective homebuyer with listings and a house tour even though he had not been preapproved for a mortgage, telling him, "I’m confident that you will get your preapproval …" By contrast, Perez told an Asian potential homebuyer that he had to get preapproval first, saying "that’s very important before we do anything." Five weeks later, she emailed listings to him.

Perez told the lawmakers Thursday that she "categorically" denies discriminating, and she said Newsday’s conclusions were "erroneous." She said, "my actions had absolutely nothing to do with race."

Questioned by State Sen. Brian Kavanagh (D-Manhattan), Perez said the white tester said he had a friend who worked in the mortgage industry in Seattle, while the Asian tester said his wife was handling the preapproval with a friend who was a retired mortgage broker.

She said she showed the Asian tester many listings in numerous communities on her computer during the test.

"I would never, never discriminate," she said.

During the second panel, real estate agent Kevin Geddie, who was affiliated with Douglas Elliman at the time of the test but is now with the Southampton office of the brokerage Compass, said: "Like all decent Americans, I detest prejudicial treatment of people based on the color of their skin" or other characteristics. He said he engaged in more follow-up with the Black tester than the white one. Any distinctions between the listings he provided was due to the testers’ preferences, he said.

In a conversation with a white tester, Geddie said that in East Hampton, the Hispanic community "really took over Springs in Northwest Woods area — which is great, because we have a lot more kids now — so their high school is drastically bigger than Southampton is." To the Black tester, he said the same school is "overpopulated."

At the hearing, Geddie said his comments were "intended to be positive. I neither felt nor expressed anything derogatory."

State Sen. Todd Kaminsky (D-Long Beach) asked Geddie, "When you said Hispanics had taken over, what did you mean?"

Geddie responded: "To be honest with you I didn’t mean anything by it … It was diarrhea of the mouth. I just was saying it’s a great community. It used to be vacant there. Whatever families moved there brought kids and it’s a thriving community now."

Geddie added, "it was worded poorly."

Kaminsky called that "ridiculous," saying, "when someone says, ‘the Jews took over a community,’ ‘X took over a community,’ it’s not meant in a positive way. You know that."

In a separate exchange with Thomas, Geddie said his comments were "clumsy" and he would reword them if he could.

In a separate discussion, lawmakers heard testimony from Joy Tuxson, an associate broker with RE/MAX Beyond in Melville. Tuxson told lawmakers she has been a real estate agent since 1972 and has never been the subject of a fair-housing complaint. "I practice with the utmost respect and professionalism," she said. "I have never used ethnic backgrounds or race to steer any of my clients away from towns or areas."

During the Newsday investigation, Tuxson told a white tester: "I’m not going to send you anything in Wyandanch unless you don’t want to start your car to buy your crack, unless you just want to walk up the street." She gave similar listings to the white and Asian testers, but fair-housing experts told Newsday her comments showed evidence of potential steering, the illegal practice of guiding homebuyers to communities according to race.

Tuxson said after the Newsday investigation, she received training from an instructor who specializes in fair housing and who "made it very crystal clear that we were only allowed to speak about the house."

Skoufis called Tuxson’s comment about crack "an abhorrent statement, and quite frankly I think most people would agree, a violation of fair housing laws."

Directing a question to Allan Eldridge, corporate broker with RE/MAX Beyond, Skoufis asked if he disagreed about whether Tuxson’s statement about crack was "a wildly inappropriate comment."

Eldridge, who had previously said the comment was taken out of context, said, "again, based upon the 30 or 40 seconds, I do."

Skoufis replied, "that is astonishing to me."

In another panel discussion, legislators heard testimony from two fair-housing experts, including Elaine Gross of Syosset-based Erase Racism.

Skoufis asked them if they were surprised that there was no indication at the hearing that any agents had been disciplined for the conduct described in the Newsday investigation.

"I really had hoped that there would be action," Gross said. The lack of discipline, she said, "has been appalling."