New Bill Seeks to Curb Discrimination by Co-op Boards
By MIREYA NAVARRO
Published: May 9, 2013
Real estate agents in New York City have long complained that co-op boards mistreat potential buyers they do not like. The boards sit on applications and never make a decision. If they turn down an applicant, they never explain why. And sometimes, the agents suspect, rejections are based on an applicant’s race or national origin.
Now, a bill pending before the City Council would require co-op board members to sign a statement saying that they did not discriminate on the basis of race and other criteria, in violation of fair housing laws, when turning down an applicant.
The bill also includes a provision that for the first time would impose a 45-day deadline on boards to accept or deny an application. It is intended to prevent the use of delays or nonresponses as a backdoor way to discriminate, according to the measure’s sponsor, Councilman Lewis A. Fidler, a Brooklyn Democrat.
Mr. Fidler said that when he was a lawyer in Brooklyn he often represented buyers who suspected discriminatory treatment.
“I absolutely won’t accept that it’s not a problem,” he said. “This is not always a white-black, gay-straight thing. In the community I was in, they discriminated against Russian-Americans.”
Mr. Fidler’s proposal is a watered-down version of several anti-discrimination bills, introduced as far back as 2004, that have met with stiff opposition from real estate groups. Those bills, civil rights advocates and some real estate brokers say, went farther in trying to curb discrimination by forcing boards to state their reasons for rejecting an applicant.
The new bill has some support in the Council, but has not been endorsed by Christine C. Quinn, the Council speaker and a Democratic candidate for mayor.
Ms. Quinn’s aides declined to comment on the bill, other than to say that she was reviewing it.
Mayor Michael R. Bloomberg opposes the bill for creating “burdensome record-keeping” and “additional impediments to private real estate transactions,” according to a statement from the mayor’s office.
Representatives of co-op groups have sought to block the new measure, asserting that it is unnecessary, would invite lawsuits and would discourage co-op residents from serving on boards. They said that instances of discrimination were aberrations, and that the main reason they rejected applicants was financial — the candidate had not shown enough resources to afford to live in the co-op.
Board members also said they regularly came across instances of applicants lying.
Stuart M. Saft, chairman of the Council of New York Cooperatives and Condominiums, testifying before the City Council last week in opposition to Mr. Fidler’s bill, recalled how one applicant submitted a reference letter purportedly from George Stephanopoulos, a co-anchor of ABC’s “Good Morning America,” that misspelled “Stephanopoulos.”
“You’d think George knows how to spell his name,” Mr. Saft said.
Legally, co-op boards have wide latitude in deciding who fits into their buildings. Co-ops operate much like private clubs and can reject people they deem unsuitable as long as they steer clear of about a dozen categories, including race, religion and marital status.
But even if the reasons for a rejection were legal, most board members would be loath to publicly state them, said John A. Doyle, the senior vice president of government affairs for the Real Estate Board of New York.
“Nobody is ever going to say ‘This guy stinks,’ ” Mr. Doyle said. “They’d never say it for fear of getting sued for one reason or another.”
At the Council hearing last week, some real estate brokers testified that discrimination was rampant in some areas of the city.
One agent, Radmila Rada Veselinovic, who sells properties in Manhattan and Queens, recounted being asked about a client’s nationality by a board member. On another occasion, she said, a seemingly perfect application from a couple with an Arab last name was denied.
As usual, the co-op board gave no explanation.
“Do you know how people feel when they are rejected?” Ms. Veselinovic said in an interview last week. “Horrible. They say, ‘Why? We’re nice people.’ There’s nothing you can say.”
Unlike other forms of homeownership, co-ops inject a third party — the board — into the real estate transaction, requiring board approval of the sale after the seller and buyer already have a contract.
For that reason, it is more difficult to investigate discrimination with methods normally used to test homeowners or landlords, like deploying people posing as prospective buyers or renters to inquire about apartments.
“With co-ops you can’t test — you have to enter into a contract before you get to the co-op board,” said Councilman Brad Lander, a Brooklyn Democrat, who is sponsoring the most recent incarnation of a tougher bill that would require boards to state their reasons for a rejection.
Mr. Lander said he would continue to pursue his bill, citing the experience of Suffolk County, where a similar measure passed three years ago and has led to fewer discrimination complaints and no lawsuits.
But while Mr. Lander’s bill is supported by civil rights advocates and many real estate brokers, it is staunchly opposed by the co-ops, the Real Estate Board of New York and Speaker Quinn. Ms. Quinn said through a Council spokesman, Justin Goodman, that the bill would have the unintended consequence of giving a cause of action for litigation and thus make “homeownership less attainable and more expensive” without reducing discrimination.
Mr. Fidler’s tamer bill has already received a hearing, inching a step closer to a vote, but Mr. Lander’s is languishing.
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