Nonprofits Oppose Drastic Reduction of Housing Discrimination Fines

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July 28, 2014; Cleveland Plain Dealer


State governments are still the locus for much public policy that directly affects what nonprofits do. In Ohio, the Coalition on Housing and Homelessness in Ohio (COHHIO) and the Ohio Poverty Law Center are among several fair housing groups opposing legislation introduced by a Cincinnati Republican, State Senator Bill Seitz, which would reduce state penalties for housing discrimination from a maximum of $50,000 to $5,000. That would make the cost of housing discrimination little more than a cash flow expense for many larger landlords, hardly a disincentive.

Seitz’s bill contains another provision that also reduces the pressure on landlords pursuing discriminatory housing policies. The bill, Ohio State Senate Bill 349, prohibits fair housing groups from suing landlords in the expectation that they will recover actual or punitive damages if the suits are successful. The Plain Dealer article says that the bill would make groups liable for attorneys’ fees if they lose the cases. The implication is that fair housing groups could sue, but only with resources from their own pockets, and if they lose, they would be paying not only for their own legal costs, but the landlords’ as well.

The law apparently puts Ohio out of compliance with federal laws on housing discrimination, which would therefore make the state ineligible for more than $1 million in federal fair housing funding.

What prompted Seitz’s actions? According to the press report, it was due to a case involving a landlady in Conneaut who made discriminatory comments to testers posing as a disabled person and as a single mother. Seitz said it was “egregious” that although the landlady paid only $100 in damages, she was hit with $40,000 in attorney’s fees for a case that didn’t involve a specific victim with an actual disability.

Our reading of the issues surrounding the Grybosky case indicate that the senator’s staff may be conflating different aspects of what happened. Apparently, Grybosky denied an apartment to an undercover tester posing as a disabled person with an assistance dog because she didn’t allow pets, and she denied an upstairs apartment to a single mother with a child, telling her that she could only rent a downstairs apartment at a higher cost. After much give-and-take between Grybosky’s attorney and the Ohio Civil Rights Commission, she was ordered “to pay $2,513 in actual damages, no punitive damages, almost $5,000 in attorneys fees and travel costs to the Ohio attorney general’s office and $3,100 in attorneys fees and travel costs to Fair Housing.”

While the legislation is a flat-out reversal of the state’s fair housing standards, some of the debate around Senate Bill 349 concerns the ability of nonprofit fair housing groups to recoup some of their expenses in lawsuits. The reality is that despite state and federal laws, the enforcement of fair housing statutes almost always relies on nonprofit fair housing groups. Like most activist nonprofits, these fair housing groups generally operate on limited budgets. To pay for the expense of putting fair housing “testers” into the field for repeated visits, these groups look to capture some form of damages from those found guilty—both to pay for the costs of testing and litigation and, in future negotiations, to incentivize landlords to take affirmative actions to remedy their discriminatory practices. Not surprisingly, there are critics who imagine that fair housing groups are on the lookout for potential “victims” like Grybosky who they can sue and then exact big payments for damages.

The reality is that the work of fair housing groups is not simply a linear and lucrative path from testing to litigation to damages. Fair housing groups typically counsel victims of discrimination, that is, actual or potential renters who might be or have been denied housing opportunities to which they are entitled, investigate charges of discrimination, and help people get their cases heard by commissions or courts. While there are some federal grants out there, enforcing fair housing costs money beyond what is available from government. The ability of fair housing groups to get some aspect of costs covered in successful litigation against landlords with discriminatory rental practices appears to be a critical part of making fair housing enforcement work.

The Seitz bill carries a final bit of irony. The senator introduced the bill roughly at the moment of the 50th anniversary of the Civil Rights Act of 1964. Interesting timing.—Rick Cohen