High-End Real Estate Brokers Sued for Source of Income Discrimination

In New York City, a woman with a Section 8 voucher recently sued real estate firm Douglas Elliman and 35 of its agents “for failing to help her find low incoming housing.” The lawsuit, filed in federal court, claims she sent emails to the agents asking for help finding Section 8 housing. She claims they violated the Fair Housing Act by failing to respond or not providing adequate help (Newkirk v. Douglas Elliman, Inc. et al).

The agents named in the suit represent mainly luxury properties. Douglas Elliman strenuously denied the allegations, stating, “We will be challenging the merits of these predatory and baseless claims.”

This case comes on the heels of another lawsuit against Douglas Elliman claiming source-of-income discrimination. In May, a court refused to dismiss a case claiming that New York City landlords and brokers, including Douglas Elliman, violated city and state human rights laws by engaging in intentional source of income discrimination (Housing Rights Initiative, Inc. v. Elliman).

Up till now, source of income discrimination has tended to fly under the compliance radar. That’s due, in part, to the misleading fact that it isn’t expressly banned by the federal Fair Housing Act (FHA). However, as landlords around the country are learning, source of income discrimination is a major liability risk that can result in significant penalties, especially under state and local fair housing laws. It’s also among the fastest growing areas of fair housing litigation, generating 1,713 complaints nationwide in 2022, according to the National Fair Housing Alliance. That’s a year-over-year increase of 39.8 percent.

This month’s Coach is dedicated to eliminating the source of income compliance blind spot. See our October lesson, “Source of Income Discrimination Liability Risks & How to Avoid Them,” available to premium subscribers here.