Fair Housing... truths and myths..

By
Real Estate Broker Owner with Turn-Key Properties LLC, Missouri and Kansas Real Estate

Fair housing, those of us in the real estate industry have had it beat into our heads relentlessly. Those of us in property management have been pounded with fair housing education and fears to the point of exhaustion.

What are the truths and myths of fair housing?

I have vast experience in this field, unfortunately not all of it is good. Of course few experiences with anything related to fair housing are good. In the mid 80's I received my first schooling in fair housing, I listened intently as they tried to scare the hell out of me. The Institute of Real Estate Management (IREM) offers courses for property managers. Their introductory course in residential management included a lot of fair housing information, enough to scare the hell out of you.

Later on, as my career progressed companies I worked for sponsored courses and seminars designed to scare the hell out of you further. I had gotten very involved with IREM and I had been elected as the chairman of the Kansas City chapter of Accredited Residential Managers. In that position I often invited speakers to come and educate us further. I even taught a few classes myself, pulling articles from newspapers about "violators".

One of the things I learned is that most of fair housing is just a political football tossed around to justify whatever the blowing political winds require at that time.

So here is how it works:

In the early 90's I was working for one of the fastest growing property management firms in Kansas City, they were helping to liquidate many of the properties that had been placed in receivership after TEFRA destroyed the commercial real estate market and caused the collapse of the savings and loans. During a company meeting they brought in some attorneys and government types to scare the hell out of us some more.

These were hard-core HUD-Nazi's; they were there to tell us what worthless rotten SOB's apartment managers and Realtors were. During this discussion one of the attorneys was telling us about all the horror stories he could think of. You know the ones; the leasing agent that didn't offer a cup of coffee to one couple after she had offered coffee to another... Costing the company tens of thousands of dollars and that poor girl her job.

Listening intently to this government thug I was hearing about how they screen their testers. He informed us that they were thoroughly screened and taught what to look for..... As I listened something occurred to me. I posed a question, Mr. government attorney, I asked; "do these testers know that if they say they are discriminated against they stand to reap huge financial rewards"? My boss squirmed in his seat, Dan Fletcher was my property manager and he really did not like where this was going.

I continued, "Sir, If they know that they stand to reap huge financial benefits by claiming they were discriminated against doesn't that make them more likely to try to create a scenario wherein they will be treated differently.

Dead silence fell over the room, in a room full of apartment managers dead silence is a rare occurrence. Dan glared at me, the attorney stuttered and stammered, searching for an answer... the best he could do was to reassure us that they screen their testers very thoroughly.

I pressed on! "But if they know they can get tens of thousands of dollars, aren't they more likely to try to create a "discriminatory" situation"?

The tension grew, the only answer any of the government types had was "we screen our testers".

Moving on, about 1993 one of the properties I worked on was privately owned, I worked directly for the owner. We had a tenant who refused to pay rent, he also had a large (unauthorized) dog that he kept in his apartment. We delivered a notice of eviction for violating his lease and for not paying his rent. He then filed a complaint stating that we were discriminating against him because of his "familial status". Seems our tenant was part of an "alternative lifestyle". While there were no laws on the books at the time for such a preference, he was able to pursue this under the familial status clause of the Fair Housing laws.

I received nasty letters, letters, threatening that I could not leave the state, that I was facing huge fines and worse! As the thing progressed I learned that not one government agency was handling this complaint. Instead of a government agency it was being handled by two contracted organizations who were funded by HUD.

So here is how it works! Agency A has a contract with HUD to pursue offenders, they get the cases from local governments and they are assigned the task of trying to settle the case. The dirty little secret is that they are funded based on performance. If nobody caves in and admits that they are a racist, sexist bigoted homophobic, ass then they don't get any funding the following year. So the focus has nothing to do with reality, it is all about results, without results they don't get funding!

Case #2 I reluctantly took a job managing an apartment complex, I tried to turn it down and even told the employer I was planning a diving trip to Florida and couldn't start for two weeks. The employer offered to pay me while I was in Florida if I took the job. How the heck can you turn that down? I got back from Florida to find that the guy I was replacing had died of a heart attack. While he was laying dead on the floor of the office at the apartment complex a prospective tenant who had an appointment came by.

Since the dead apartment manager could not answer the door he filed a claim stating that the dead guy had looked out the window and seen he was "insert description" and refused to open the door.

I got served, I got accused and I had to defend myself! Once again some agency contracted by HUD was sending me nasty letters, telling me not to leave the state and that I had the "option" to settle this claim!

After many months of attorney fees, my boss finally settled for some piddly sum, the end result was that the agency got to put a W in the win column, thus justifying their pitiful existence and getting more funding for the following year.

Mid 90's, I took a job briefly with a company in central Missouri. The owner was an old-school, elderly man with very antiquated views of race and culture. He demanded that the employees steer people of certain races to specific properties. I refused to break the law, more importantly I refused to treat people like that. As the property manager I directed the employees to abide by the law. One day a leasing agent came to get keys to an apartment, the owner came in and told me she couldn't show that "black man that apartment.... He would rape her"! The man in question was a med student from a foreign county, he was pursuing an advanced degree in medicine. I took the man to the property and showed him the apartment. Later I was told that "he" could not move in there!

Quandary; what to do, I needed the job, I needed the money but I was not comfortable with the discrimination. I went to the local library I used a pay phone and I called HUD, I wanted to know if I gave up my great paying job, would I be able to be compensated if I revealed what this racist was doing.

The answer was NO, "unless you are personally a victim of discrimination there is no compensation for you"! I hung up, I knew what was right, but I also knew that being unemployed and blacklisted by the establishment was a death sentence to my career. I resigned my position and started my own company, Turn-Key Properties LLC.

I established rules, guidelines and regulations pertaining to fair housing, that I demand will be adhered to. A few years later I was contacted by an "investigator" another contractor who was seeking to "settle up". My former employer was in the hot-seat for his actions. I asked WIFM?, the answer was NOTHING! unless I had been discriminated against there was no compensation due me. So they wanted me to testify against my former racist employer without compensation, without reward to satisfy their selfish goals to get funding for the witch hunts they do.

Witch hunts are exactly what fair housing contractors do, they seek to find some poor bastard that will pay them to go away! There is no justice, no desire to find the truth, only seeking to destroy so that they can justify their existence, it is called job security!

The result: roughly every four years or so I get attacked, some miscreant files some get rich quick claim against me and my company, we document, document, document, every damn thing we do and say. When we do get attacked by one of these "contractors" we have the documentation to back up our position. The reality is that fair housing is less about treating people with the decency they deserve it is all about politics and government subsidies supporting little contractors who suck of the government teat by attacking legitimate companies while sucking up taxpayer dollars to support their attacks on law abiding business owners and unsuspecting landlords.

Real offenders can get off by paying these little punks off, legitimate businesses have to fight to survive!Fair housing has become a joke, a tool of the politicians and the "contractors" to extract money from innocent citizens.

Most complaints are filed by tenants who either are behind on rent and/or are violating their lease in some form or fashion, testers are encouraged by monetary gain to exaggerate or create a situation wherein they can claim discrimination because they know they can make thousands of dollars by doing so.

The whole damn thing is a scam!

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Groups:
Investing in Real Estate
Real Estate Investors
BADB-Bloggers Against Drunk Blogging
Kansas City Rainers
Property Management
Tags:
reality
fiction
truth
discrimination
real estate
hud
fair housing

Comments 8 New Comment

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Anonymous #5
Anonymous
Larry

Thanks for telling your story.

This needs to end.

BEFORE:

http://www.fff.org/freedom/0798d.asp

http://www.jimbovard.com/American%20Spectator%201999%20HUD%20Unfair%20Housing%20Acts.htm


AFTER:

http://theeprovocateur.blogspot.com/2008/12/shakedown-hud-and-its-cronies.html

http://www.stategonecrazy.com/

 

January 15, 2009 03:37 PM
Anonymous #6
Anonymous
Shakedown

It's Realtors, Property Managers, and Lenders.

"Mortgage lenders were also pressured to adopt these weakened standards by the Community Reinvestment Act.

As Professor Liebowitz (University of Texas) said in testimony before Congress this past summer, the government's entire housing policy was based "on a false claim, or lie" that mortgage lenders were discriminating against minorities."

http://bsimmons.wordpress.com/2008/12/20/it%E2%80%99s-time-to-uproot-the-real-cause-of-the-mortgage-crisis/

It starts at HUD and filters down to the HUD-sponsored agencies. People need to post their experiences on line on blogs, and write their elected officials.

January 15, 2009 04:46 PM
Anonymous #7
Anonymous
RE Broker

Wow! What a great read, thanks for the information from Professor Liebowitz. I anticipate things will get even uglier with the new restrictions. Soon everyone will be crying discrimination again.

Fair Housing is a Scam and it has been used as a weapon to force lenders, to give loans to many people who had no business getting them, which did cause the meltdown.

But the real scam will be all the suits that come after the restrictions are fully implemented.

January 15, 2009 05:08 PM
Anonymous #8
Anonymous
Shake and Bake

Some things need to change that have not:

http://www.fff.org/freedom/0798d.asp

 

January 15, 2009 06:18 PM
Rainer
148,982
Eric Boyd
Broker, Property Manager - Jacksonville Property Management
Step One Realty, LLC, 904-469-6335

Thanks for posting this blog!  We're in the process of ramping up our property management business, and these are thing we've haven't yet been faced with.  I'm glad to have read this.

May 02, 2009 08:10 AM
Anonymous
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Rainmaker
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Ben Edsall

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Additional Information

http://www.turnkeyproperties.us I generally blog about the investment property market. Real estate trends and politics as they affect the market. Rental Property and Kansas City. As the founder of the Institute of Equestrian Real Estate Professionals I am thrilled to promote equine real estate and aid in the education and certification of equestrian real estate professionals throughout the world. http:/www.ierep.com