Co-op apartment buildings: key battleground for fair housing

As a matter of law, co-ops and their board members are prohibited from engaging in discrimination just as much as any other housing providers are. But the nature of the co-op application process is unique and provides unique challenges to robust enforcement.

Unlike every other form of housing transaction, it is not enough for an owner to agree to sell to a buyer and for a financial institution to agree to lend money to consummate the transaction. Co-op purchases, or, rather, co-op purchasing applicants, have to submit themselves to co-op board approval. This is a process that, as a practical matter, is immune from the “testing” that is able to detect discrimination in other forms of housing.

Secrecy in the co-op admissions process is not a procedural decision that happens to be made by some co-op buildings. It is an industry-wide practice recommended for the purpose of insulating co-ops from liability for their conduct by the trade associations, lawyers, and managing agents that serve the industry.

Secrecy in the co-op world has been and continues to be pernicious:

1. Secrecy creates an environment where co-op board members feel more free to act in arbitrary or discriminatory fashion.
    
2. Secrecy encourages real estate brokers and agents to guess about who will “fit” a particular building’s admission criteria. That kind of guessing is the kind of exercise that can translate into race, ethnicity, or other impermissible factor serving as a proxy for fit.
    
3. Secrecy discourages families from seeking to purchase in buildings where they know or suspect that they will be a demographic “outlier.”
    
4. Secrecy discourages rejected applicants from pursuing legitimate, meritorious discrimination cases because the applicants, not given the reasons for turndown, can’t assess the validity of the reasons.
    
5. Secrecy discourages attorneys from taking on discrimination cases in the co-op context because, here, too, there are no reasons put on the table that can be assessed.
    
6. Secrecy facilitates the ability of discrimination defense attorneys to craft after-the-fact reasons for a co-op’s action in the relatively small number of circumstances where discrimination lawsuits are brought.

In short, secrecy has hobbled fair housing enforcement for decades, even though it is an open secret that co-op boards are often petty or arbitrary, and are sometimes illegally discriminatory (more information would be available were it not for the fact that victims are individuals and families who are focused on finding another place to live and not on documenting the problem).

If you know about or have experienced these kinds of problems in the past, please let us know by using the “fill us in” form to the right.

Please note: Despite the obstacles to fighting discrimination created by co-op secrecy, ADC has successfully fought such discrimination in the past and is available to take on such matters in the future. If you have been turned down by a co-op board recently and you believe that you have been discriminated against, contact us by using the “get help” form.