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D.C. wins historic $10 million in housing voucher discrimination case

Three real estate firms and some of their executives are required to pay penalties for turning away or imposing illegal requirements on renters with housing vouchers or other housing assistance

D.C. Attorney General Karl A. Racine speaks during a news conference in Washington on Thursday. (Drew Costley/AP)

Three real estate firms and several of their executives are required to pay D.C. a historic $10 million settlement and stop managing property in the city forever for allegedly denying access to rentals or imposing additional, and illegal, requirements on low-income applicants.

The settlement is the largest civil penalty in a housing discrimination case in U.S. history, according to D.C. Attorney General Karl A. Racine (D), who announced it at a news conference Thursday.

The attorney general’s office filed suit against the three real estate firms — DARO Management Services, DARO Realty and Infinity Real Estate — and several of their executives in 2020 for allegedly violating civil rights and consumer-protection laws meant to protect low-income renters who receive government assistance from housing discrimination. The action was part of an ongoing crackdown on discrimination against voucher holders in the District.

Racine said at the news conference that enforcing anti-discrimination laws is vital to preventing displacement of longtime residents.

“This discrimination has perpetuated Jim Crow racism that pushes Black and Brown families out of certain areas of the District of Columbia,” he said.

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D.C. officials documented discriminatory practices at 15 buildings owned or operated by the companies named in its lawsuit, throughout Wards 1, 2 and 3, according to court documents. The buildings, officials said, were concentrated in some of the District’s most affluent areas.

Building managers that ferret out applicants receiving government assistance in the form of vouchers and other aid programs violate the city’s Human Rights Act, which bans source-of-income discrimination.

The D.C. attorney general’s office filed suit against the three real estate firms and their associates after finding that DARO illegally posted ads with discriminatory language and charged Section 8 voucher recipients extra fees.

In one email exchange cited in court documents between Jared Engel, who helped oversee Infinity’s investments, and Carissa Barry, a D.C. real estate broker who oversaw the DARO properties and worked with Infinity, the instructions were clear: “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.”

In another email cited in court documents that was addressed to Steve Kassin, a managing partner at Infinity who was also named in the lawsuit, Barry wrote that she was “doing everything I can to reduce if not eliminate the section 8 program from our communities.”

According to the attorney general, DARO outright refused to accept subsidies from renters who were enrolled in the D.C. rapid rehousing program — a voucher program commonly used to help families out of homelessness — and applicants receiving financial aid through partnerships with organizations meant to combat homelessness in the District.

As part of the settlement reached this week, Barry will be required to forfeit her real estate licenses for 15 years.

The firms and executives named in the suit did not return requests for comment.

“What a tremendous win for working families in this city,” said D.C. Council member Elissa Silverman (I-At Large). “This is a win for our pharmacy techs and grocery store workers and seniors. … This is such an expensive city that many of our essential workers who helped us get through the last three years need a housing voucher to help get a home in this city.”

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More than 30,000 Washingtonians rely on some form of government subsidy to supplement the cost of housing, according to the District.

About 11,500 low-income households get aid through the federally backed Housing Choice Voucher Program, commonly known as Section 8 vouchers, which subsidize rent at homes not typically designated as affordable housing. According to Racine’s office, 95 percent of D.C. Section 8 voucher holders are Black, and 79 percent of households using them are headed by women.

There are also local voucher programs such as the Local Rent Supplement Program, which provides tenant-based subsidies to nearly 5,000 households, the attorney general’s office said.

Mayor Muriel E. Bowser (D) has also relied on voucher programs to get homeless families and individuals out of shelters and off the streets.

One of these programs, rapid rehousing, provides subsidized rent for four months to a year, and is meant to intervene in emergency situations to prevent families from losing their housing or help families out of homelessness and back into stable homes. In fiscal 2021, the District put more than $98.6 million toward funding rapid rehousing — a historically high amount.

DARO previously accepted voucher holders in at least one of its properties, Sedgwick Gardens in Cleveland Park, where the company told The Washington Post in 2019 that it had not taken steps to either “solicit or discourage voucher holders from applying” for housing at the stately apartment complex.

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Longtime tenants there complained that some voucher holders who were brought in as part of the District’s efforts to curb homelessness were disruptive, at times violent and lacked adequate social services to address underlying issues of addiction, mental health struggles and other challenges.

DARO’s portfolio consists of about 20 apartment complexes throughout the District and its surrounding suburbs.

As required by D.C. law, the settlement money will be used to support litigation on behalf of the District as well as crime reduction and violence-interruption programs.

“There are more bad actors like DARO in our town,” Racine said. “We are going to try as best we can to go after them.”