The owner of a sprawling East Bronx housing complex accused of discriminating against low-income renters agreed to pay New York City $1 million and reserve hundreds of units for tenants with rent subsidies, city officials said on Thursday.
The city’s Commission on Human Rights and the nonprofit Fair Justice Housing Center reached a settlement with Parkchester Preservation Management after a yearslong investigation found that the company engaged in housing discrimination by blocking tenants with housing subsidies from renting more than 6,000 apartments across its Parkchester development.
The company will also reserve 850 units for tenants with government-funded housing vouchers, including the federal Section 8 program, according to the terms of the settlement.
“This announcement is a win for the everyday New Yorkers in search of safe, stable housing, and a warning sign for any predatory group trying to harm tenants,” Mayor Eric Adams said in a statement.
State and city laws prohibit landlords from refusing to accept tenants because they use government aid to pay rent — a pervasive practice known as source-of-income discrimination.
Parkchester’s management company did not respond to messages left with its office or attorney.
As part of the agreement, Parkchester will also pay up to $63,750 in damages to applicants who were denied apartments, and will pay $150,000 to the Fair Housing Justice Center, which began the investigation in 2016.
The Parkchester website touts the complex as “one of the safest communities in NYC,” with round-the-clock security, proximity to the 6 train, and on-site parks, schools, shops and medical offices, as well as an array of restaurants.
The planned community opened in the 1940s and now houses a diverse mix of working-class and middle-income renters. But the city investigation found just a fraction of residents use housing vouchers to pay rent, even as apartment prices fall within rates set by city and federal subsidy programs.
The settlement announced on Thursday comes two years after a state judge ordered the property owner to stop requiring prospective tenants with housing vouchers to prove they earned at least $62,000 a year to qualify for an apartment — a rule that effectively locked them out of the complex.
Judge Richard Latin slammed the “irrational” policy in a decision first reported by City Limits in 2022, arguing that anyone who met that minimum income requirement wouldn’t qualify for a housing voucher in the first place.
A mother of two sued Parkchester after the income requirement prevented her from qualifying for the apartment, even though a New York City housing program would have covered her entire rent.
City officials provided testimony in that lawsuit, with Sara Zuiderveen, a senior adviser with the Department of Social Services, noting that the complex had never accepted a tenant who used a city-issued subsidy known as CityFHEPS to pay rent.
“That is particularly striking because Parkchester’s units fall well below the monthly rent cap for CityFHEPS vouchers,” Zuiderveen wrote.
Under the deal announced on Thursday, Parkchester agreed to eliminate minimum income requirements for voucher holders.
Katherine Carroll, the Commission on Human Rights’ acting deputy commissioner, said the settlement was the largest on record for the agency, which is tasked with cracking down on housing discrimination. She called the penalties “a message to housing providers throughout New York City.”
Advocates for low-income tenants have urged city and state officials to more aggressively investigate and punish source-of-income discrimination to hold landlords, managers and brokers more accountable for the illegal practice.
New York Attorney General Letitia James on Tuesday announced a $400,000 penalty against another large property owner for refusing to rent to tenants with housing vouchers across its portfolio in Harlem and Brooklyn.
James said investigators found that the company, Shamco Management Corp., instructed staff to reject or stop responding to tenants with housing vouchers. In addition to paying fines, Shamco agreed to reserve 65 units for voucher holders and implement anti-bias training for employees.
“Housing is a human right, and everyone deserves fair access to housing, regardless of their source of income,” James said in a statement.
Shamco’s attorney Michelle Phillips said the company denied any wrongdoing and agreed to the settlement to avoid mounting legal fees.
“Our practices are fair and just,” she said. “Decisions regarding the rental of units are made based on legitimate criteria and without regard to any prospective tenant’s source of income or any other protected group.”