The Fortune Society has made what some would call a “fortune” from a housing discrimination lawsuit settlement this week with a $500,000 payout.
The nonprofit– which provides re-entry services for people who were incarcerated — sued the affordable housing company iAfford in U.S. District Court for the Eastern District of New York in late October 2022, claiming that the company discriminated against prospective renters for their criminal histories, thus disproportionately impacting Black and Latino applicants.
Housing developers hire iAfford to manage the application process for hundreds of city-subsidized housing units across more than 100 developments and 40 neighborhoods in NYC. The company currently lists 17 Bronx properties.
Recently known in the Bronx for the controversial Just Home proposal to house formerly homeless people released from Rikers Island on the Jacobi Medical Center campus, The Fortune Society supports the formerly incarcerated population through supportive housing and claimed the company’s missteps put a burden on the organization’s operations.
iAfford offered a settlement under Judge Pamela Chen on Aug. 1, which the nonprofit organization accepted on Monday. In the agreement, the housing company admits that certain actions violated fair housing and human rights laws, but does not admit liability or that the plaintiff suffered damages. iAfford agreed to pay the half million in damages and costs (including attorneys fees) to The Fortune Society, as well as take steps to ensure no further violations take place — such as training employees, adopting an anti-discrimination policy and appeal process, and submitting an annual report to The Fortune Society for four years detailing its efforts.
While landlords can run criminal background checks in New York City, they are supposed to assess each applicant on a case-by-case basis rather than purely reject them based on a conviction, and considering the context for a crime and rehabilitation efforts has been long recommended by the U.S. Department of Housing and Urban Development.
iAfford, however, rejected a client of The Fortune Society for having a criminal record without regard to the nature of the crime or other context, and further “disguised its offending blanket ban as city policy,” according to the nonprofit. The complaint referenced phone calls from August, September and December 2021 with iAfford employees who all said the company denies applicants with criminal records.
The Fortune Society argued that not only is a blanket ban on formerly incarcerated people against city policy, but it is discriminatory against Black and Latino applicants, since the groups are disproportionately convicted and incarcerated. According to the organization, 65% of formerly incarcerated people in the U.S. are Black or Latino. And as of 2015, 46% of formerly incarcerated were Black and 23% were Latino in New York state.
In a statement to the Bronx Times, an iAfford spokesperson denied that the company ever had a policy of categorically rejecting people with convictions, but acknowledged that employees made mistakes.
“Over 2 years ago mistakes were made by lower level staff at our company that may have given an impression we would deny housing to people with criminal justice histories,” the spokesperson said. “These errors ran contrary not only to our company policies, but also to who we are as a business and as New Yorkers. We have always abided by HPD’s (NYC Department of Housing Preservation and Development) marketing guidelines and will continue to do so.”
The organization said that its investigation into the company and an $11,000 advocacy campaign about blanket bans diverted its resources and undermined efforts to inform formerly incarcerated clients about applying for affordable housing through city website Housing Connect, which iAfford lists apartments on.
HPD Commissioner Adolfo Carrión Jr. said that his agency — which operates Housing Connect — prohibits marketing agents from denying housing from applicants simply because they have a criminal record and requires “extensive training on fair housing laws.”
“Shining a light on discrimination is essential to ensuring our housing lotteries are fair and open and reaching New Yorkers in need of housing,” Carrión said. ” … We will continue to work hand-in-hand with the Fortune Society in this fight as we applaud them for reaching this impactful outcome.”
iAfford has marketed and leased more than 1,200 apartments in New York City, according to the company.
“This resolution is a win not only for Fortune, but also for the City and for anyone with prior criminal justice involvement who is seeking housing,” said JoAnne Page, president and CEO of The Fortune Society. “It also has national implications as a deterrent to blanket discrimination and is in keeping with guidance from U.S. Department of Housing and Urban Development (HUD), which addresses widespread housing discrimination because of criminal legal history. At a time in our nation’s history when housing insecurity has soared, we need to ensure that people encounter opportunities, not obstacles, as they work to build constructive lives in their community for themselves and their families.”
This article was updated at 3:39 p.m. on Aug. 17 to include a statement from HPD Commissioner Adolfo Carrión Jr.
Reach Aliya Schneider at aschneider@schnepsmedia.com or (718) 260-4597. For more coverage, follow us on Twitter, Facebook and Instagram @bronxtimes
