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Landmark Settlement of Lawsuit Establishing National Precedent That Advocacy Organization Can Challenge Private Landlords’ Blanket Ban on Renting Apartments to People with Criminal Records

Five-year-long federal litigation by The Fortune Society is resolved before trial, with a court-defined road map for advocacy groups to bring lawsuits under the Fair Housing Act against landlords who exclude persons with criminal records

Settlement also includes a record-setting $1.1875 million payment by the accused landlord, establishing a powerful deterrent effect against landlords who deny housing to otherwise qualified African-Americans and Hispanics

November 5, 2019, New York – The Fortune Society announced today a precedent-setting settlement of a landmark federal civil rights case allowing advocacy groups to bring lawsuits against private landlords who impose blanket bans on renting apartments to people with criminal records.

Fortune, a not-for-profit community-based organization that supports successful community reentry and provides housing, job-training, education, counseling, mental health and other critical services for formerly incarcerated persons, reported the successful settlement of their five-year-long federal litigation alleging that blanket bans are a violation of the Fair Housing Act because such bans disproportionately and overwhelmingly impact African-Americans and Hispanics.

Fortune’s lawsuit filed on October 30, 2014 in the United States District Court for the Eastern District of New York (case number 1:14-cv-06410-VMS) is one of the first in the nation to challenge a blanket ban on housing imposed by a private landlord as a civil rights violation.

The legal action brought by Fortune against Sandcastle Towers Housing Development Fund Corp. (HDFC) and Sarasota Gold LLC (Sarasota Gold) was handled by John Relman, Esq., founder of Relman, Dane & Colfax, a civil rights law firm headquartered in Washington, D.C.

“The Sand Castle,” is a 917-unit apartment complex located at 7 – 11 Seagirt Avenue, Far Rockaway, Queens.

The pre-trial settlement also includes a record-setting $1.1875 million payment by the accused landlord, establishing a powerful deterrent effect against landlords who deny housing to otherwise qualified African-Americans and Hispanics.

JoAnne Page, President and CEO of The Fortune Society, said, “This settlement fires a warning shot across the bow of any landlord in America who blanketly refuses to rent apartments to people with criminal justice involvement. We entered this litigation with the goal of establishing legal precedent under the Fair Housing Act for challenging blanket bans imposed by private landlords on persons with criminal records. The Court’s summary judgment decision recognizes that right, and in so doing establishes important new legal precedent that Fortune and peer organizations can rely on in the future to bring lawsuits against landlords who exclude persons with records.”

The settlement, in which HDFC, Sarasota Gold, and Weissman also warrant that they no longer own or manage rental real estate, follows a summary judgment decision issued by the Court this past summer, and the full record supporting that decision remains public.

The decision affirmed Fortune’s right to proceed to trial under a Fair Housing Act disparate impact claim (a claim that a policy disproportionately and unnecessarily impacts a minority group) and set out a road map for proving such a claim based on the evidence gathered in the case by Fortune. This road map, or template, shows how to use statistics to establish and prove a disparate impact case challenging a blanket ban. It will aid advocates and plaintiffs across the U.S.

Mr. Relman said, “In the litigation, the defendants also challenged Fortune’s ‘standing-‘ a legal requirement that a plaintiff, like Fortune, must meet by producing evidence that it was injured by the allegedly unlawful actions of the defendants. The Court upheld Fortune’s standing based on the time and funds it devoted to finding housing for its previously incarcerated clients who it alleged were not permitted to live at the Sand Castle. The decision establishes an important precedent that can be used and relied on in any future cases.”

At $1,187,500, the settlement is one of the largest, if not the largest, ever obtained in a criminal record housing discrimination case. It is also a very large settlement against a single landlord and a single apartment complex, making it a strong warning about the potential cost to landlords of blanket discrimination based on records.

Ms. Page said, “This case has been closely followed by advocates and the real estate industry around the country. Landlords will take notice of its deterrent effect. Many will look more closely at whether they have policies that comport with the law, and they will be concerned about the exposure for costly litigation.”

Ms. Page added that the size of the settlement and the fact that both it and the Court’s decision are public will give Fortune a powerful tool to use in future discussions with landlords who express reluctance to provide housing to Fortune’s clients.

Mr. Relman added, “Bans on housing and employment for those re-entering society from prison fall disproportionately and overwhelmingly on African-American and Hispanic men. When housing providers deny basic rights to those who have been formerly incarcerated, they are imposing harsh limitations on where these individuals can live and work which perpetuate poverty and segregation, and dramatically increase the likelihood that they will return to prison.”

Background

In the complaint, Fortune alleged that the owners of “The Sand Castle,” a 917-unit apartment complex located at 7 – 11 Seagirt Avenue, Far Rockaway, Queens, and Weissman Realty Group LLC, their management company for the complex, maintained a policy of automatically excluding any person with a record of a criminal conviction from renting or living in an apartment regardless of the nature of the conviction, the amount of time that has lapsed since the conviction, evidence of rehabilitation, or any other factor related to whether a specific person poses any threat to safety. Fortune explained how in 2013 and 2014, the defendants repeatedly refused to permit it to rent apartments for its clients because those clients have criminal histories.

Ms. Page noted that this type of blanket ban policy has become increasingly common in housing due to the increased accessibility of inexpensive background checks via the Internet.

In 2013, Fortune received a housing assistance grant to provide funding for 25 residential units in Queens. Fortune determined that the Sand Castle would be an ideal site to house program participants. Specifically, the property is located in a relatively safe and racially diverse area within the grant’s geographical limitation, and in a neighborhood in which there are already Fortune clients. The waterfront property is budget-friendly, conveniently located to public transportation, and features numerous amenities, including a supermarket, on-site medical facilities, and a doorman.

The lawsuit stated that when the defendants learned that Fortune serves formerly incarcerated individuals, they refused to rent apartments to Fortune stating that they enforce a policy prohibiting anyone with a criminal record from renting an apartment or living at the Sand Castle.

Fortune again contacted the defendants in early 2014 and confirmed that there were vacant apartments available for rent. Fortune was clear that its clients have criminal backgrounds and presented evidence that the defendants made it clear that they did not wish to conduct any further business with Fortune because of those criminal backgrounds.

About The Fortune Society

Based in New York City, Fortune serves approximately 7,000 clients a year, providing comprehensive services including housing, education, employment, health, and case management programs, among others. Approximately 90percent of Fortune clients are African-American or Latino.

Fortune provides temporary and permanent housing for hundreds of formerly incarcerated individuals each year through “scattered-site” programs that place clients in private rental housing throughout the City.

Fortune has developed successful relationships with more than 100 landlords to facilitate its scattered-site housing and regularly seeks out new locations for these programs. Fortune also operates two residences in West Harlem – offering emergency and “phased-permanent” housing, as well as a 110,000 square-foot apartment building with 114 units for formerly incarcerated individuals and low-income families from the local community.

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Contact: Colleen Roche
LAK Public Relations
212-329-1413
croche@lakpr.com

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