Thanks to a loophole in fair housing laws, a consumer organization, sanctioned by HUD , can investigate a real estate company, present evidence of discriminatory practices, shake the company down for "consulting fees," and threaten it with litigation if the real estate company doesn't start writing checks fast.
That's what's happening to NRT, Inc.
According to Shanna Smith, president and CEO of The National Fair Housing Alliance (NFHA,) NRT, Inc. has a "pattern of discriminating against African-Americans."
After conducting a secret investigation and finding some of the real estate company's agents in violation of fair housing laws (she alleges), Smith called NRT, say NRT spokespersons, and told the company she intended to hold a press conference. She offered to consult with NRT to improve its fair housing training, practices and systems.
When NRT agreed to discuss the issue, she stalled the company for months without submitting a proposal, which she admitted to Realty Times. When NRT hired Smith's competitor (The National Community Reinvestment Coalition was hired by NRT in May, 2006 to augment NRT's existing fair housing training, systems, and practices.), after waiting over five months for Smith to submit a proposal, Smith reacted like a woman scorned.
And hell hath no fury.
Smith filed a complaint against NRT, Inc., and its subsidiary Coldwell Banker Residential's Chicago Gold Coast, and told the Chicago Defender on August 24, 2006, that she was looking for a multi-million dollar settlement.
Meanwhile, NRT issued this statement:
"NRT does not believe that there is any merit to the allegations being made by the National Fair Housing Alliance, and their organization has been unresponsive to our repeated attempts to engage in constructive dialogue during the past year.""We take great issue with the statements made by Ms. Shanna Smith of the National Fair Housing Alliance about our company's corporate culture. NRT employees follow a comprehensive Code of Ethics and Key Policies embedded at the root of the way we do business. NRT has a widely recognized diversity effort that is clearly visible in our sales and corporate offices to underscore our inclusive culture."
"To provide a comprehensive review our fair housing policies, practices and enhance our current training for our sales associates, we announced in May a partnership with the National Community Reinvestment Coalition, a widely respected grassroots civil rights organization. I think NRT's record on diversity education and training speaks volumes for our corporate culture for our employees as well as the ethical standards to which we hold our sales associates accountable."
What's got NRT's goat is that Smith won't disclose how the testing was done, and there may be a good reason. In order for matched pair testing done for enforcement purposes to be admitted in federal court, the standards of scientific reliability must be met.
At this point, no one knows whether Smith has the goods or not. She may be bluffing, which may be one reason why she's pushing to settle. NRT spokespersons say Smith did tell NRT that Coldwell Banker was by no means the only target of NFHA’s testing investigation. She said that it expected to file HUD complaints against 10 different real estate agencies by the end of the month and perhaps 30 more by the end of the year.
"We went over the results, but we don't want to debate whether these are sufficient for legal action," said an NRT spokesperson. "We are trying to be productive, to be a leader, and fair housing is an important part of our efforts. A tremendous amount of time passed. Our counsel followed up with their counsel, but because we were interested in finding an organization to partner with, we tried to evaluate who else was out there that specializes in this area. We found the National Comunity Reinvestment Coalition. We didn't want to move forward on an exclusionary basis."
So why did communication fall apart? "She made a multi-million-dollar settlement demand that would go to her organization," says the spokesperson. "We thought we would rather see a partnership of training. We were looking for a partnership."
