Justice Department Settles Chester County Lawsuit For $30,000

In April, the U.S. Department of Justice announced a settlement of a complaint alleging that the former owners of Knollwood Apartment complex in Phoenixville, Chester County, discriminated against families with children in the rental of dwellings at the apartment complex.  The property manager was named as a defendant in the suit as well.

The complaint, filed in U.S. District Court in the Eastern District of Pennsylvania, alleges, among other things, that the owners violated the Fair Housing Act by informing families with children that they could only rent units on the first floor of the apartment complex, and by informing families with children that certain upper-level apartments were unavailable while applicants without children were told of and shown the same upper-level apartments.  The Fair Housing Act prohibits discrimination on the basis of familial status in the rental of dwelling units.

The Justice Department’s investigation, which began in April 1997, consisted of a series of tests at Knollwood Apartments, which the Department conducted, in conjunction with the Fair Housing Council of Suburban Philadelphia.  The testing involved trained pairs of individuals posing as prospective tenants and inquiring about the availability of apartments.  One group of testers posed as prospective renters with children and the other group posed as prospective renters without children.  By comparing the experiences of both sets of testers, investigators were able to determine whether renters with children were treated less favorable than those without children.

Knollwood Partners owned the Knollwood Apartment complex until November 2, 1998, when the apartment complex was sold to the current owner.  The partnership was liquidated following the sale of the complex.  The defendant property manager has worked at the complex since 1993 and, following the sale, continued to work for the new owners.  The current owners of the complex were not named in the lawsuit.

The Justice Department’s lawsuit was filed simultaneously with a consent decree that resolves all of the United State’s claims.  Under the terms of the consent decree, the defendants are prohibited from engaging in illegal discrimination on the basis of familial status.  The terms of the decree also include the payment of monetary damages by the defendant of $24,000 to the National Fair Housing Alliance and a civil penalty of $5,000 to the U.S. Department of Justice.  In addition, the defendants must attend mandatory training at the Public Interest Law Center of Philadelphia for a fee of $1,000. 

The defendants in this case have been extremely cooperative during the course of our investigation and I commend them on their efforts at bringing this matter to a prompt resolution,” Bill Lann Lee said.  “We are pleased to see that steps will be taken to promote equal treatment of families with children at this complex.” 

Council Recognized by HUD as “Simply The Best”

The Fair Housing Council of Suburban Philadelphia received a national “Simply the Best” award for “Outstanding Achievement” from Secretary Andrew Cuomo at the U.S. Department of Housing & Urban Development’s (HUD) Best Practices & Technical Assistance Symposium 2000 held in Washington D.C. in August.  The Fair Housing Council of Suburban Philadelphia was selected as one of the fifty best practice award winners from HUD’s Office of Fair Housing and Equal Opportunity (FHEO) for “Maximizing the Use of Comprehensive Fair Housing Education and Outreach.” 

 The Mid Atlantic Office of the HUD nominated FHCSP for this award. The nomination stated that “FHCSP has dedicated a large portion of its resources to educating the public, supportive services agencies, public officials, Real Estate Professionals, Government entities, landlords, and advocacy groups about fair housing law. The comprehensive approach the Council has taken has brought the fight for Fair Housing “to the streets.” This year alone FHCSP has trained over 60 agencies and organizations, published 5 educational newsletters, written several articles for various local publications, updated and maintained a website with a wealth of fair housing information and assisted untold numbers of individuals by telephone. 

FHCSP continually identifies forums though which the fair housing message can be spread and broadens the scope of its educational programs accordingly.  During the upcoming year, the Council hopes to broaden the scope and circulation of its technical newsletter, Delaware County Fair Housing News, and rename this publication Delaware Valley Fair Housing News.  This newsletter is distributed to landlords, Realtors, government and township officials, housing counselors and others involved in the housing industry.  Some topics this newsletter has addressed have included zoning issues for town councils, issues regarding accessibility for the disabled in the new construction of multi-family dwellings for builders and developers, how landlords can develop occupancy standards that do not violate the fair housing laws, and issues regarding predatory lending.  During the upcoming year, the Council will be putting together a comprehensive training program to train consumers to avoid getting hooked by predatory lenders. 

In a letter to awardees, President Clinton stated that, “[T] hese ‘best practices’ have a significant impact on the lives of countless Americans through the creative and effective leveraging of resources.  You are taking on some of the most difficult and important challenges we face today by helping those most in need, literally changing America for the better.”  Eva Plaza, Assistant Secretary, Office of FHEO, in a letter announcing the award stated that the Council’s “efforts exemplify[y] what works in Fair Housing & Equal Opportunity, and for that you should be proud.” 

FHCSP is proud, and would like to thank all our members, supporters and funders for making these important activities possible.

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Predatory Lending May Be Considered a Fair Housing Violation

On October 4, The Fair Housing Council of Greater Washington announced a U.S. District Court ruling that permits a lawsuit to proceed against the D.C. based Capital City Mortgage Corporation for engaging in allegedly predatory and racially discriminatory lending.

Attorney John Relman, who represents the D.C. fair housing center and six borrowers, said Judge Joyce Hens Green’s ruling to deny summary judgment to the firm is “the first decision in the country squarely holding that targeting minority communities for predatory lending--or reverse redlining--can be a violation of the Fair Housing Act.” 

According to Relman, “What this says is, if you peddle illegal predatory loans in a community, if you in essence peddle poison to that community because of the racial makeup of the community, then a jury can decide if that violates the Fair Housing Act.”  Under that law, a jury could award unlimited punitive damages.

The suit filed two years ago alleges that the firm and its president, Thomas K. Nash, targeted African American borrowers for high-cost loans it knew they could not repay. 

A series of Washington Post articles in 1996 found that Capital City and its president foreclosed on one of every five mortgages issued from 1984 to 1995.  Most properties were in predominantly black D.C. neighborhoods.  The loans frequently carried interest rates of 24% or higher.