Brokers beware. The government is working with non-profit fair housing organizations to catch your agents violating fair housing laws, show you the evidence, and then get you to fund them by settling out of court. HUD is showing these organizations how to investigate you where the evidence will stand up in court, but what's even more interesting is that the investigating organizations can bring suit against you as if they are real plaintiffs. They can even keep the damages, all with HUD's blessing.
The National Fair Housing Alliance has filed a housing discrimination complaint against Coldwell Banker Residential's Chicago Gold Coast office and its parent company NRT, Inc., following an investigation which it alleges found real estate agents disparaging predominantly African American neighborhoods, white "testers" being steered to predominantly white communities, and African American testers being shown fewer homes for sale than their white counterparts.
According to Shanna Smith, president and CEO of the National Fair Housing Alliance, a consortium of 220 non-profit fair housing organizations, state and civil rights agencies and individuals, NRT was identified by U.S. Department of Housing and Urban Development (HUD) as being a company "with a pattern of discriminating against African-Americans."
"HUD conducts a study every 10 years, and they identified the companies as engaging in discriminatory practices, (they've been doing this since 1979.)," says Smith. "HUD contracted with the Urban Institute in Washington, D.C. to do research-based testing in rental-sales market. In '79 and '89 it was African American and White issues, and in '99 they expanded it to 60 cities and Asian-Americans, Native-Americans and Latinos. HUD releases this report, but they don't have the staff to follow up with enforcement."
"We said [that] it seems you have all this evidence of discrimination, but you're not doing follow-up enforcement," continues Smith, "so we met with Secretary Martinez, and he set aside $1 million to do follow-up enforcement-based testing. It means that HUD did a request for proposals, and we were successful bidder to test in 12 metro areas, and another group is doing the West Coast.
"HUD looked at the research results and gave us the names of companies to test in our metro areas and we randomly tested the agents, so it was HUD that targeted the companies," says Smith.
Smith says that when the NFHA's investigation found evidence of discrimination in Atlanta, she sat down with NRT officials to negotiate a settlement in October. "They asked us to submit an offer to settle, and they rejected our offer," says Smith.
NRT spokespersons claim that they negotiated with Smith in good faith, but her demands for a settlement price were simply too high. They also attempted to negotiate a deal, at Smith's suggestion, with her organization in which the NFHA would help NRT with its fair housing education training for agents, review their policies, and assist them with practice standards that would help all agents be compliant with fair housing laws -- for a large fee.
But instead of providing NRT with a proposal, Smith took a months-long sabbatical. "We were waiting for HUD to come back with its determination (reopening the case in Atlanta.) We suggested self- testing and training, and before we could get into negotiations, they (NRT) contracted with another organization," she says.
After months of being stalled by Smith, NRT did indeed contract with another fair housing watchdog to improve its compliance. According to NRT's timeline, the company repeatedly tried to get Smith to provide a proposal. When they got no response, they turned to the National Community Reinvestment Coalition for help. The alliance between NRT and NCRC was announced in May -- 8 months after NRT agreed to Smith's suggestion of a proposal.
"We're trying to do the right thing here," said a frustrated NRT spokesperson.
Meanwhile, the NFHA has filed a complaint with HUD in the administrative process, and "we are looking to file federal litigation as well," says Smith. "A judge or a jury would award damages, and the damages would go to our organization and to any other plaintiffs. If we go into litigation, we will identify other plaintiffs."
In case that seems like a conflict of interest, fair housing laws allow anyone, including an investigating non-profit, to stand as plaintiffs and collect proceeds, because in fair housing cases the community as a whole is damaged.
"You could be white and claim that because African-American homebuyers weren't brought to your home," says Smith, "that you failed to benefit from diversity in the culture."
What will it take for NRT to get out of this mess?
"They could settle," offers Smith.
Smith told the Chicago Defender on August 24, 2006 that she was looking for a settlement in the multi-millions. 
