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Undercover sting leads housing group to sue over welfare discrimination

The results of a nonprofit housing agency's undercover sting operation prompted it to file lawsuits against five apartment complex owners in Buffalo and Cheektowaga.

Representatives for Housing Opportunities Made Equal posed as apartment seekers, calling about apartment availability and even touring one- and two-bedroom units and asking questions about amenities. When they asked if public assistance statements could be applied toward security deposits, they were told no.

That violates Erie County's Fair Housing Law, the agency said.

The law, adopted in May 2018, outlaws discrimination based on many factors, including "source of income." The five lawsuits filed by HOME are the first to cite the law as the basis for legal action against rental companies accused of discrimination.

"These were individuals who had been bad characters for years, in our opinion," said HOME Executive Director DeAnna Eason.

The property owners have a history of "trampling on rights," she said.

HOME — a Buffalo-based housing advocacy, education and civil rights organization — fights housing discrimination as part of its mission.

Several of the apartment complex managers and owners reached by The Buffalo News said they were unaware of the lawsuits filed Monday in State Supreme Court. They said the public benefit security agreements they are being faulted for refusing to accept come with strings that often result in rental agencies never receiving the money they are owed.

The lawsuits involve apartment complexes that rent well over 1,000 units. They include:

  • Garden Village Apartments, owned by Glendale Development, 70 Garden Village Drive, Cheektowaga
  • Buffalo Housing Associates, managed by Wingate Management, 491 Connecticut St., Buffalo
  • Peace Bridge Apartments, 111 Porter Ave., Buffalo
  • Apartments owned by Peninsula Wholesale Holdings and managed by DASA Properties, 2163 South Park Ave. and 1584 Delavan Ave., Buffalo
  • Windwood Place Apartments, 40 Windwood Court, Cheektowaga.

The five apartment complexes were sued for refusing to accept public assistance security agreements when HOME "testers" posed as renters. The managers at Windwood Place are also accused of refusing to accept low-income Section 8 housing vouchers.

"Our hope is always that you’re doing the right thing, but in certain situations, as with these five cases, folks don’t always do the right thing," Eason said.

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Public assistance security agreements are meant to eliminate or reduce the amount of money that low-income individuals receiving public assistance would otherwise put down as security deposits. Landlords rely on security deposits for any money owed at the end of a lease from apartment damage or unpaid rent. The Department of Social Services promises to cover the landlord's costs, up to a certain amount, for such end-of-lease costs.

Lisa Nichols, CEO of DASA Properties, said she was surprised to find her company named in a lawsuit. She said DASA Properties accepts public assistance security agreements, but the company also asks for a nonrefundable cash deposit of half the monthly rent to hold an apartment if the individual applies and is qualified. That deposit is not a security deposit and is instead applied to the tenant's first month's rent once the tenant moves in. She said the "hold" deposit has been vetted by attorneys and is legal.

When Peace Bridge Apartments owner Ken Pieri was told the nature of the discrimination complaint, he responded: "That's probably true."

He said he would not mind accepting public assistance security agreements if the rules for reimbursement from social services were simpler. But the government requires the landlord to provide estimates from two different contractors before it will agree to cover any expense, he said. Doing all that work doesn't make sense if the tenant is being penalized for simply leaving an apartment with a dirty refrigerator or toilet, Pieri said.

"Sure, I would accept it, but not under rules like that," he said of public assistance security agreements.

He also said he was unaware of the county's Fair Housing Law.

[RELATED: Read the Erie County Fair Housing Law]

Kathy Sparkes, property manager for Windwood Place Apartments, called red tape a huge issue for apartment complexes that take care of all maintenance and repairs in-house. At another apartment rental company Sparkes worked at about 10 years ago, she said, whenever the company applied for security agreement payments from social services, the apartment complex never received its money.

"They didn’t pay for any of the damage," she said. "You were more or less stuck with all the repairs and no recourse."

Representatives with Glendale Development said they are looking into the matter and "take all matters regarding nondiscriminatory housing and its application very seriously."

Bonnie Parsons, regional manager for Wingate Management, said all staff go through anti-discrimination training and learn about fair housing requirements. But she also said most of the tenants of Buffalo Housing Associates properties receive benefits through Housing and Urban Development. In Schenectady County in the past, she said, attempts to file special claims with HUD for damages and unpaid rent from former tenants were denied if the apartment complex did not collect a security deposit from the renter in advance.

That put the rental company in a difficult position, she said.

While the City of Buffalo and towns of West Seneca and Hamburg have housing anti-discrimination laws that are designed to protect against discrimination based on source of income, the county's Fair Housing Law is the only one that explicitly states that individuals cannot be discriminated against for using public assistance security agreements in lieu of cash security deposits, Eason said.

Daniel Corbett, associate director and lawyer for HOME, said a number of rental companies, including some of the ones cited in the lawsuits, have a history of keeping tenants' entire security deposit and forcing the tenants to fight to reclaim the money and prove they left no damage beyond normal wear and tear. Cash security deposits, in general, can be a barrier to those seeking safe, secure housing, even when prospective tenants have a legal source of income that renters are required to accept under the law.

Since passage of Erie County’s law in 2018, HOME has conducted 106 fair housing investigations to test whether landlords are discriminating against prospective renters based on their source of income, Corbett said. Of those investigations, he said, 37% revealed evidence of discriminatory conduct. The rest were inconclusive. Tests were conducted in more than a dozen cities and town in Erie and Niagara counties.

This first set of lawsuits represents the strongest set of cases to date, Eason said.

Each of the five lawsuits asks the judge to issue an injunction against the defendants continuing further discriminatory practices. The suits also seek any applicable damages, attorney costs and fees. The county's Fair Housing Law imposes civil penalties of $5,000 to $10,000 per violation.

"We want people to find safe, affordable housing without discrimination," Eason said. "We’re not asking much. Stop doing it."

Housing law bans discrimination based on income subsidies, citizenship status

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