DC Voucher Discrimination Results in Record Penalty

person A.J. Johnson today 10/30/2022

The District of Columbia entered into a consent agreement on October 15, 2022, requiring three real estate firms (Daro Realty, LLC, Daro Management Services, and Infinity Real Estate, LLC)  and firm executives to pay a record $10 million in penalties for illegally discriminating against renters in D.C. who use Section 8 Housing Choice Vouchers. This is the largest civil penalty in a housing discrimination case in U.S. history.

In the District of Columbia, it is a fair housing violation to discriminate based on source of income. This includes Housing Choice Vouchers.

The case originated with a whistleblower and was taken up by the D.C. Attorney General. The initial lawsuit (District of Columbia v Daro Realty, LLC, et al) was filed in 2020 and alleged that the companies illegally charged Section 8 voucher recipients extra fees and posted discriminatory housing advertisements.

During the litigation, the allegations were confirmed by emails between the company executives showing how they pushed to have voucher holders excluded from their properties. In one email revealed as part of the suit, an investment director wrote, "No voucher/Sec-8 - find ways to reject, applicant must meet every requirement (credit, security deposit, income, etc.), in the case that we have to lease to them which we should find every way out of, don’t put in renovated units. No transfers." In another email, an executive wrote that she was doing "everything I can to reduce if not eliminate the Section 8 program from our communities. We have tightened our screening criteria as much as humanly possible."

Under the terms of the settlement agreement, the three real estate companies and their principals will be required to:

  • Pay $10 million in civil penalties for illegal housing discrimination. This must be paid within 60 days of the date of the order;
  • Permanently stop managing residential property in D.C.;
  • Dissolve the property management arm of its business and transition management of all the properties owned by the entities to a third-party company within 18 months;
  • Permanently bars all defendants, including the companies and named executives, from owning any interest in a property management company in D.C; and
  • Forfeit a professional license. An executive will be required to surrender her D.C. real estate licenses and not seek reinstatement or seek to apply for a new license for 15 years.

Why this case matters: 19 states and the District of Columbia expressly ban source of income discrimination in housing. This case demonstrates the seriousness given to this type of discrimination in those areas where it is illegal. Owners and managers operating in these areas must ensure that property policies in no way discriminate against persons using vouchers. This includes making sure that voucher users are not held to a different standard than non-voucher users and that different terms and conditions are not applied to voucher holders.

Latest Articles

2023 Income Limits Will Be Delayed

The U.S. Department of Housing & Urban Development (HUD) normally publishes annual income limits in early April of each year. However, complications with calculating the limits due to COVID-19 will cause a delay in the release of the limits in 2023. According to HUD, the limits will be released on or about May 15, 2023. HUD normally uses American Community Survey (ACS) Data from three years prior to the income limit release to determine family median incomes and income limits. However, the Census Bureau did not release the 2020 one-year ACS data due to data collection difficulties because of the COVID-19 pandemic. For this reason, HUD will use 2021 ACS data to determine the 2023 median income and income limits for low-income housing tax credit (LIHTC) properties. Why is this important? Owners of LIHTC properties will have to wait a little longer than usual to determine the income and rent levels available to them for 2023. While increases in income limits nationally are expected to be less than in prior years, most areas should still see some increase in limits, which will allow for a modest increase in rents in 2023.

Virginia Housing Looking for Compliance Staff

Virginia Housing (formerly Virginia Housing & Development Authority) has three positions open in Compliance & Asset Management. If interested, you may access the position descriptions at https://us63.dayforcehcm.com/CandidatePortal/en-US/VHDA. Virginia Housing (VH) is one of the premier Housing Finance Agencies in the nation and I have had the privilege of working with them for more than 40 years. The Agency provides an excellent work environment and has a comprehensive benefits program, including medical, dental, vision, and prescription drug coverage. VH also has both long- and short-term disability plans and various options for retirement plans. If you (or someone you know) are looking for an excellent opportunity on the public side of the affordable housing field, I encourage you to check out the open positions at VH and consider applying.

Rural Development Suspends Interim Recertification Requirements for COLA Recipients

On November 10, 2022, the Rural Development Service released an Unnumbered Letter granting a temporary exception to tenant recertification requirements. On October 13, 2022, the Social Security Administration announced there will be an 8.7% increase in Social Security and Supplemental Security Income (SSI) benefits in 2023. This will increase the average SS payment by more than $140 per month starting in January. The RD Section 515 program requires that tenant households be recertified at least annually or when household income changes by $100 or more per month. Since the increase would require recertifications for most Social Security recipients, the Agency is temporarily waiving the recertification requirement for tenants whose household income, regardless of income type, has increased by more than $100 but less than $200. Accordingly, during the Exception period, tenants will not be required to recertify unless their household income changes by $200 or more per month. This temporary waiver will be in place for all of 2023 and will expire on December 31, 2023. During the period of the waiver, tenant households must be recertified at least annually or whenever a change in household income of $200 or more per month occurs. The requirement that borrowers must recertify for changes of $50 per month if the tenant requests that such change be made, is still in effect. Keep in mind, the exception does not waive the requirement for the annual renewal certifications. Owners will receive a copy of this notice from RD. Once received, the notice must be posted in a conspicuous location at the property and a copy of the notice must be provided to all tenants.

Service Coordinators - A Plus for Affordable Senior Housing

Multi-family properties with federal assistance can benefit greatly from the presence of an on-site service coordinator. These coordinators provide supportive services and act as advocates for vulnerable residents. These coordinators are members of the management team and play a significant role in keeping at-risk residents housed and healthy. According to a report by the Joint Center for Housing Studies at Harvard, during the recent pandemic, 40% of the residents at properties served by Service Coordinators " did not have the food, medicine or household supplies they would need to isolate for a week. It was the service coordinators who handled the procurement and distribution of food, medicine, and household goods for these residents. If you operate a federally assisted site for older adults or the disabled, your property could benefit greatly from a service coordinator - if you do not already have one. In this article, I will provide an overview of HUD s Senior Coordinator in Multifamily Housing Services Program. I will explain the benefits of having a service coordinator on staff, what a service coordinator does, and funding sources for such a position. HUD s Service Coordinator Program HUD established its Service Coordinators in Multifamily Housing Program (SCMF) in 1990. HUD has the authority to use Section 8 funds to employ service coordinators in most HUD-assisted and conventional public housing developments designated for the elderly and disabled. Primary guidance for the program may be found in the SCMF Resource Guide. This guide supplements the HUD Management Agent Handbook 4381.5, REV-2, CHG-2. The resource guide may be found at https://files. hudexchange.info/resources/documents/ Service-Coordinators-in-Multifamily-Housing-Program-Resource-Guide.pdf. Service coordinators provide seven key functions: Proactively engage with residents. The coordinators make it a priority to build relationships with residents through frequent interactions that are formal and informal. Conduct assessments and develop service plans. They conduct annual assessments with residents and use this assessment information to develop plans for making referrals and helping residents obtain services and resources. Develop a property-wide profile. The coordinator will create a picture of resident needs across the housing community and develop responsive, community-wide programming. Establish partnerships with community-based service organizations. Make referrals for support services. Coordinators will also monitor whether residents have followed up on those referrals. Educate and advocate for residents. The coordinator will organize onsite educational events provided by community-based organizations. Coordinate closely with other project staff. The coordinators are active members of the site management team and will meet regularly with other staff to share information and discuss issues that affect the residents. Benefits of Service Coordinators A primary benefit of a service coordinator is linking residents to needed social services. This is an important part of keeping the elderly in their homes and aging in place. These service coordinators are full-time staff members with specialized training in linking residents with the services they need. Services that can be arranged include: home-delivered meals; transportation; public assistance such as Medicaid, food stamps/SNAP, and Medicare Part D prescription drug plan; home healthcare; house cleaning services; and assistance with medical bills or insurance claims. According to the American Association of Service Coordinators (AASC), in 2021, 93 percent of residents with service coordinators continued living independently instead of moving to facilities with higher care levels. This not only provides a significant benefit to residents but also helps prevent costly evictions. Who is Eligible for a Service Coordinator? HUD-assisted housing sites that are designated for older adults and people with disabilities are eligible to participate in the Service Coordinators in Multifamily Housing Program. There are two main funding sources for the Service Coordinators in Multifamily Housing Program: Operating Budget: residual receipts, budget-based rent increases, and debt service savings may be used to fund the coordinator position. The service coordinator becomes a permanent part of the management team, and the cost of the service coordinator program becomes a standard budget expense.Owners must obtain HUD approval to add a service coordinator program to any site s budget, regardless of whether or not an increase in rental rates is proposed.Owners of Section 202 PRAC projects can include a service coordinator program in their operating budget at any time after the project is fully occupied.HUD may approve the use of residual receipts to fund some or all of a site s service coordinator program. Owners with funds in their residual receipt accounts must use all available residual receipts prior to receiving any service coordinator grant funds. HUD Grants: Owners may apply for grants awarded through a HUD-issued Notice of Funding Availability (NOFA). Service coordinator grants are made for an initial three-year term and provide funding for the salary, fringe benefits, and related administrative costs associated with employing a service coordinator. Grants are renewed annually thereafter if no other funding source is available to cover costs. Program Monitoring All service coordinator programs in multifamily housing are expected to adhere to the same requirements as outlined in the SCMF Program Resource Guide. HUD conducts monitoring reviews of service coordinator programs to ensure they serve their intended purpose. The frequency of reviews will depend on the nature of a site s day-to-day operations and service coordinator program activities. Staffing the Positions A site owner will hire a service coordinator through job listings like any other staff. The hiring of qualified professionals is critical to the success of the SCMF program. In general, there should be one full-time service coordinator for every 50 to 100 residents. However, at sites with large numbers of residents with mental health conditions or other high needs, a smaller ratio may be appropriate. What do Service Coordinators Not Do? Provide direct services; Act as recreation or activity directors; Duplicate existing community services; Provide nursing care; Handle resident funds; Manage leasing agents; Provide transportation to residents; Organize or lead resident organizations; or Act of Power of Attorney for residents. Service Coordinator Qualifications Minimum requirements for Service Coordinators include - A bachelor s degree in social work or a degree in psychology or counseling, preferably; however, individuals without a degree but with appropriate work experience may be hired; Two to three years experience in providing social services to families; Demonstrated working knowledge of social services and resources in your area; and Demonstrated ability to advocate, organize, problem-solve, and "provide results for families. Training in cultural competency and bilingual skills are also assets for many service coordination positions, and in larger properties, service coordinator aides are often hired to assist the coordinator. Aides should have appropriate education or experience working with elderly people and/or persons with disabilities. College students working towards a degree in social work, or a health-related field may look to gain hands-on experience and may be able to receive academic credit for an internship or work-study program. Service Coordinator Training Requirements All new-hire service coordinators must have met a minimum of 36 training hours of classroom/seminar time before hiring or must complete these minimum training requirements within 12 months of initial hiring, on age-related and disability issues. Recently completed college courses on aging, mental health, or other relevant topics relating to the needs of the residents may be counted toward the 36-hour training requirement. HUD requires service coordinators to remain current on changing statutes at all levels of government and current practices in aging and/or disability issues. Service coordinators should receive 12 hours of continuing education each year, and fair housing training is a must. Bottom Line Every HUD property that serves the elderly or disabled can benefit from the services of a service coordinator. If your property does not currently have a service coordinator, serious thought should be given to creating the position either through the current project budget or by applying in the next round of HUD funding.

Want news delivered to your inbox?

Subscribe to our news articles to stay up to date.

We care about the protection of your data. Read our Privacy Policy.