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.