Remarks as prepared for delivery
Thank you for the kind introduction, Secretary [Julián] Castro. I am a great admirer of your accomplishments and of your commitment to ensuring equal opportunity for all Americans. I would like to thank you and Assistant Secretary [Gustavo F.] Velasquez for the invitation to speak here today. I am grateful for the opportunity to share the work that the Civil Rights Division of the Department of Justice is doing alongside HUD (U.S. Department of Housing and Urban Development), and to thank HUD’s employees for their efforts in our fight for fair housing.
We are here to celebrate the Fair Housing Act (FHA). And it is an important time to do so. Recent events have thrown a spotlight on the racial divisions that cut into far too many American communities. The topic of civil rights has shifted once again into the center of our national conversation, and the issue of fair housing must be a prominent part of that conversation.
Fair housing, as you all know, determines much more than whether a family has shelter. Fair housing is about equal access to good jobs, to good schools, to credit, to transportation, to safety, to a range of opportunities and relationships. And the Fair Housing Act puts the weight of that responsibility on the shoulders of our two departments. It is our job together to ensure not only that housing discrimination does not force any families into the cold, but also that every family has equal access to two of the most basic rights of American democracy: equal opportunity and equal justice.
When President Lyndon Johnson signed the Fair Housing Act into law in 1968, he proudly explained that he was codifying “the promises of a century.” Our job is to follow through on those promises. Through persistent and evenhanded enforcement of the Fair Housing Act, we have rooted out discrimination and upheld basic civil rights for those who live in America, often for our most marginalized members of our most vulnerable communities. We have made great strides forward and we certainly are closer to realizing our nation’s most fundamental commitments to equality, to dignity and to freedom.
But our presence here today cannot be just about a celebration of the passage of the Fair Housing Act and the progress we’ve made since. It must be an occasion to recommit ourselves to securing real, unfettered choices in housing; to the revitalization of our most vulnerable neighborhoods; to increasing access to credit; to breaking down the vestiges of segregation; and to opening the doors of integration. We must ensure that these promises of the last century continue to have meaning in people’s lives in the century to come.
Because despite our great strides – despite what have certainly been remarkable achievements – it is all too clear that challenges to fair housing endure. As President Johnson warned, the roots of injustice run deep. Racial barriers continue to divide our communities. Eligibility for apartments, houses and mortgages continue to be influenced by where we were born, the color of our skin, our sex, our disabilities, the presence of our children. Almost half a century after the Fair Housing Act was signed into law, we continue to see basic and blatant forms of housing discrimination, as well as the emergence of more subtle, but equally pernicious, variations.
Racial discrimination, for example, is still evident in the rental of apartments. Within the last year, we settled a Fair Housing Act case alleging that the owners of several apartment complexes in Ohio told African American applicants that apartments weren’t available, but then turned around and signed new leases to similarly qualified white applicants. The complaint details comments by the owner of the property, including statements that “black people are trouble,” and derogatory racial slurs suggesting African Americans cause property values to go down.
These actions by landlords cannot, and will not, be tolerated. Our settlement requires defendants to pay $175,000 to victims identified by the United States, a $25,000 civil penalty and an additional $650,000 in damages and attorneys’ fees to private plaintiffs and the state of Ohio. And it went further. The settlement also requires that the defendants hire an independent management company to manage all of their rental properties, hire a third party to investigate compliance, receive training on the requirements of the Fair Housing Act and report back to the department regularly for three years.
Many potential renters have no way to know that they are being treated differently from their counterparts. For example, African American applicants may be treated cordially, but would not know that white applicants with the same qualifications would be offered a lower price, see more options and find an available apartment when they were told there was none. And because of that, the housing providers are too often able to maintain basic forms of discrimination. A predecessor of mine called this “discrimination with a smile.” Through evidence developed by the division’s Fair Housing Testing Program, however, we can compare the experiences of prospective tenants, gather comments from leasing agents and property managers, and build a case. It is an important tool in our arsenal and we continue to develop new and creative ways to employ it.
We also continue to see governmental entities run afoul of fair housing principles by taking actions to maintain residential segregation – from steering residents to housing complexes based on race to limiting opportunities to minorities through exclusionary zoning practices.
We have filed cases against formerly de jure housing authorities in Georgia and Louisiana alleging that they continue to segregate residents by race. We have seen municipalities impose moratoria stopping affordable multi-family housing developments and change zoning ordinances to achieve the same effect. In St. Bernard Parish, Louisiana – a case developed by HUD – the parish even tried to stop private rentals to African Americans by imposing a “blood relative” requirement on rentals, among other requirements. Private litigation, HUD actions and a DOJ lawsuit were needed to put an end to those practices and compensate victims.
Residency requirements are another mechanism used to perpetuate segregation. We recently sued the town of Oyster Bay on Long Island, an overwhelmingly white community, because when it decided to approve affordable housing developments, it gave preference to existing residents.
Race discrimination is not the only form of discrimination we encounter. Within the last few weeks, we achieved significant settlements in two cases alleging familial status discrimination in rental housing. HUD investigated and charged both cases, and we added pattern or practice claims when we filed suit. In both cases, we alleged that property owners and managers implemented policies that restricted children from common areas of the property, or required constant supervision for anyone under 16. In those two cases, we obtained $270,000 in monetary relief and, of course, changes in the discriminatory practices.
We continue to see the scourge of sexual harassment in housing. In three recent settlements, the allegations were similar. We alleged that an owner or the property managers engaged in a pattern or practice of sexually harassing female tenants and prospective tenants. All three cases involved horrific conduct. Our complaints alleged that the defendants made constant unwanted sexual comments and advances toward their female tenants; exposed themselves; requested sexual acts for reduced rents, delayed evictions, or other housing benefits; and took adverse actions when those sexual overtures were resisted.
Sadly, many of the tenants in these properties felt that their only choice was to endure the harassment or be forced to live with their children on the street.
But because a few brave women stepped forward and made complaints, we obtained significant relief in these cases – over $4.6 million in monetary damages for the victims. All three cases also resulted in significant injunctive relief, imposing strict limitations on the property managers’ interactions with existing and prospective tenants, as well as requiring employee trainings, compliance monitoring and independent managers for the properties at issue.
We will continue to aggressively protect the rights of individuals to be free from sex discrimination in housing. The division has filed three more cases alleging unlawful sexual harassment since November, including United States v. Southeastern Community and Family Services, a pattern-or-practice case which originated in part from a HUD investigation and referral. There we allege that staff at a public housing agency used their positions to demand sexual favors from female applicants for the Section 8 Housing Choice Voucher Program.
Access to housing for individuals with disabilities continues to be a priority for the division. In our recent case against the city of New Orleans and the Louisiana State Bond Commission, we alleged that the defendants worked to stop the conversion of a former nursing home into permanent supportive housing because it would supply housing for persons with disabilities. Under the settlement agreements, the housing development at issue is going forward and the city has committed to develop 350 additional permanent supportive housing beds for persons with disabilities over the next three years. And at the same time, the city will amend its zoning ordinance to make permanent supportive housing a permitted use in all multifamily districts and will refrain from any future moratorium on the funding of affordable housing in New Orleans.
In addition, we filed or settled a total of nine cases in 2014 alleging a failure to design and construct rental properties in compliance with the Fair Housing Act accessibility guidelines promulgated by HUD.
These cases are part of our departments’ longstanding efforts to ensure that multifamily dwellings are built with units that are accessible to individuals with disabilities – homes where someone who uses a wheelchair is not confined to certain rooms, homes where people who use wheelchairs can leave and enter without assistance or the risk of injury; and homes that are integrated into our communities, not relegated to the margins.
To that end, we are also committed to community inclusion for persons with disabilities. The Supreme Court’s ruling in Olmstead requires states to eliminate unnecessary segregation of persons with disabilities and to ensure they receive services in the most integrated setting appropriate to their needs. Olmstead says separate isn’t equal and unnecessary segregation of people with disabilities is discrimination. Since 2009, the Civil Rights Division has negotiated settlements with six states that provide a path for persons confined in large congregate facilities to move into the community. That’s where the Fair Housing Act comes into play. We need to ensure that communities don’t impose unnecessary barriers to housing choices available to persons leaving those facilities.
We are engaged in efforts to resolve claims against two municipalities we believe have imposed just such unlawful barriers. Through this work, the division is transforming the paradigm of services that are provided to people with disabilities from one of seclusion and exclusion to one that fosters inclusion and community integration.
Our efforts at integration, we’ve found, must also address issues of policing if they are to be truly effective. As an example, one of our HUD referrals resulted in a case against the city of San Jacinto, California, where we alleged that the city discriminated against persons with disabilities when it passed an ordinance restricting the operation of group homes and then targeted those homes for enforcement actions. The city's enforcement efforts included an unannounced, early morning sweep by city officials and sheriff's deputies. We settled the case in 2014. Because of its actions, the city will pay more than $750,000 in damages, attorneys’ fees, and a civil penalty. And as part of the settlement, the city rewrote its zoning code.
Similarly, in our investigation of the Antelope Valley Stations of the Los Angeles County Sheriff’s Department, we found that in response to community opposition to changing racial demographics, the Sheriff’s Department and the local housing authority worked together to target enforcement of the Housing Choice Voucher program against African Americans, with the goal of terminating them from the program and pressuring them to move out of the Antelope Valley. As our Antelope Valley investigation illustrates, the division is committed to ensuring that policing does not contribute to segregation, and is instead a means of promoting safety for everyone, no matter where they choose to live.
I’d like to turn now to the division’s efforts to combat discriminatory lending practices. Fair lending continues to be a major priority for the division and is a fundamental part of fair housing. The division focuses on all aspects of potentially discriminatory action by creditors, and all forms of lending, including mortgage lending, auto lending, credit-card products and unsecured consumer lending.
A major focus for the division’s fair lending work – and I know a focus for HUD as well – has been mortgage lending. Discrimination at the bank can impact a family’s ability to acquire housing just as much as discrimination at the leasing office. The housing crisis sparked in 2007 was driven by irresponsible and sometimes fraudulent lending practices. And while the devastation of that crisis was – and still is – felt nationwide, African American and Hispanic communities bore the brunt of it.
I’m proud to say, though, that our response has been strong. Since 2010, the division has settled 18 suits alleging discrimination in mortgage lending, including pricing discrimination, steering and redlining. The settlements in Countrywide and Wells Fargo are the largest fair lending settlements in the department’s history, so it is important that I share some of their background today. Fortunately, explaining Countrywide and Wells Fargo does not take long – the complaints we filed were not complicated. Essentially if you were African American or Hispanic, you were more likely to be placed in a subprime loan or pay more for your mortgage loan than if you were a white borrower with similar creditworthiness. That roughly sums it up.
But the impact of that conduct was significant and more complicated. Our settlements in those cases recognized that victims were hurt beyond differences in prices and terms. The victim compensation funds established through the Countrywide and Wells Fargo settlements specifically took into account the resulting harm to individual credit, and the effects that could have on a person’s ability to find housing, employment or access higher education. In Countrywide, the bank agreed to pay $335 million for approximately 200,000 victims of discrimination. Wells Fargo paid over $184 million to thousands of victims of steering and pricing discrimination and established a borrower program called CityLift, which provided $50 million in down payment assistance to nine communities nationwide that were heavily impacted by the housing crisis. As of early 2015, we have distributed to borrowers 91 percent of the $335 million Countrywide settlement fund and 98 percent of the more than $184 million Wells Fargo settlement fund. And the CityLift program has been a resounding success. Over 2,600 loans have been made with grants through the program, with grants in most jurisdictions ranging from $15,000 to $20,000.
HUD’s response to the housing crisis has been equally strong. HUD’s 2013 settlement with Wells Fargo will bring a $39 million investment to 45 communities nationwide. The settlement arose from the National Fair Housing Alliance’s complaint alleging that Wells Fargo maintained and marketed its properties “in a state of disrepair in predominantly African American, Latino, and other non-white communities” compared to predominantly white communities, where these properties were “in a materially better condition.” Wells Fargo’s investments under the settlement will help improve housing in minority neighborhoods that have been hard hit by the foreclosure crisis and will support homeownership, neighborhood stabilization, property rehabilitation and housing development.
HUD has also done critical work in ensuring that borrowers have equal access to lending through its investigations and settlements addressing redlining, maternity leave-related discrimination and disability discrimination.
I’d also like to touch on the division’s enforcement of the Servicemembers Civil Relief Act (SCRA). The SCRA provides protections during the foreclosure process so that members of the armed forces can focus as much of their attention as possible on their military duties without fearing adverse consequences for themselves or their families. It also guarantees service members reduced interest rates of six percent or lower on loans incurred before entering into military service.
Recently, the division announced that nearly 1,000 service members who lost their homes through foreclosures that violated their SCRA rights will be eligible to receive approximately $123 million.
As you can see, the Civil Rights Division has made fair housing and fair lending a priority. In Fiscal Year (FY) 2014 alone, the division’s Housing and Civil Enforcement Section filed 34 cases, including 25 cases with pattern-or-practice claims. Over half of those cases originated through HUD – either as referrals or through the election process. During that time, moreover, the Housing Section obtained settlements totaling over $350 million in monetary relief for victims and affected communities.
In all, we obtained 41 consent decrees or favorable judgments in FY 2014. I am also proud to report that in the last five years, the division has obtained over $1.2 billion in relief for individual borrowers and impacted communities through lending settlements brought under the FHA, the SCRA and the Equal Credit Opportunity Act.
And no partner is more important to our fair housing efforts than the Department of Housing and Urban Development. No partner refers more fair housing cases and provides more support for our enforcement of the law. Our relationship to HUD is integral in finding, investigating, bringing and resolving some of our most important fair housing suits. Even individual cases referred to us through the HUD election process can become large pattern or practice suits that can help to significantly move the dial for fair housing.
And I applaud HUD’s efforts to advance fair housing through rulemaking. In 2012, HUD issued the landmark Equal Access Rule, which ensures that its core housing and lending programs are open to all eligible persons, regardless of sexual orientation or gender identity. Finally, I must call attention to HUD’s proposed rule on Affirmatively Furthering Fair Housing. It is an important way to ensure that the promises of the Fair Housing Act will continue to be fulfilled, by seeking to increase integration; overcome historic patterns of segregation; reduce racial and ethnic concentrations of poverty; and reduce illegal disparities by race, color, religion, sex, familial status, national origin or disability.
Together, we have accomplished much. But you and I know that we have much more work to do. I look forward to our continued partnership and collaboration to identify and root out both new and old forms of discrimination. Through those efforts we can ensure that fair housing remains part of the American way of life – that all individuals who live in this country have access to housing free of discrimination, and that all communities are protected and supported by the promises of the Fair Housing Act.