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       1      BEFORE THE NEW YORK STATE SENATE
              STANDING COMMITTEE ON INVESTIGATIONS AND
       2      GOVERNMENT OPERATIONS
              AND
       3      STANDING COMMITTEE ON HOUSING, CONSTRUCTION, AND
              COMMUNITY DEVELOPMENT
       4      AND
              STANDING COMMITTEE ON CONSUMER PROTECTION
       5     -----------------------------------------------------

       6                     JOINT PUBLIC HEARING:

       7            PUBLIC HEARING ON LONG ISLAND REGARDING
               REAL ESTATE AGENTS� DISCRIMINATION OF HOME BUYERS
       8
             -----------------------------------------------------
       9
                                         Student Center Theater
      10                                 Mack Student Center
                                         Hofstra University
      11                                 Hempstead, New York

      12                                 Date:  December 12, 2019
                                         Time:  10:00 a.m.
      13

      14      PRESIDING:

      15         Senator James Skoufis, Chairman
                 NYS Senate Standing Committee on
      16         Investigations and Government Operations

      17         Senator Brian Kavanagh, Chairman
                 NYS Senate Standing Committee on
      18         Housing, Construction, and Community Development

      19         Senator Kevin Thomas, Chairman
                 NYS Senate Standing Committee on
      20         Consumer Protection

      21

      22

      23

      24

      25








       1

       2      ALSO PRESENT FROM THE STATE SENATE:

       3         Senator Phil Boyle

       4         Senator John E. Brooks

       5         Senator James Gaughran

       6         Senator Todd Kaminsky

       7         Senator Anna Kaplan

       8         Senator John Liu

       9         Senator Monica Martinez

      10

      11      ALSO PRESENT FROM THE STATE ASSEMBLY:

      12         Assemblymember Charles Lavine

      13

      14

      15

      16

      17

      18

      19

      20

      21

      22

      23

      24

      25







                                                                   3
       1
              SPEAKERS:                               PAGE  QUESTIONS
       2
              Arthur Brown                              15
       3      "Long Island Divided"
                Project Director
       4      "Newsday"

       5      Laura Curran                              26      37
              County Executive
       6      Nassau County

       7      Steve Bellone                             26      37
              County Executive
       8      Suffolk County

       9      Fred Freiberg                             40      61
              Co-Founder
      10      Fair Housing Justice Center

      11      Elaine Gross                              40      61
              President and CEO
      12      Erase Racism

      13      M. Ryan Gorman                           120     128
              President & CEO
      14      NRT, LLC
                (Realogy Holdings Corporation,
      15         parent company)

      16      Richard Helling                          209     209
              Tester
      17      Johnnie Mae Alston
              Tester
      18      "Newsday"

      19      Kimberly A. Kinirons                     240     264
              Assistant Attorney General,
      20        Suffolk Regional Office
              NYS Attorney General's Office
      21
              Theresa Sanders                          240     264
      22      President
              Urban League of Long Island
      23
              Lorraine Y. Collins                      240     264
      24      Director of Policy and
                External Affairs
      25      Enterprise Community Partners, Inc.







                                                                   4
       1
              SPEAKERS (continued):                   PAGE  QUESTIONS
       2
              Moses Seuram                             277     283
       3      President
              Duncan MacKenzie
       4      CEO
              NYS Association of Realtors
       5

       6

       7

       8

       9

      10

      11

      12

      13

      14

      15

      16

      17

      18

      19

      20

      21

      22

      23

      24

      25







                                                                   5
       1             SENATOR THOMAS:  Hi, good morning, everyone.

       2             Can everyone take their seat?

       3             Thank you.

       4             Today is December 12, 2019.

       5             I want to welcome everyone to the hearing on

       6      housing discrimination here on Long Island.

       7             I am state Senator Kevin Thomas, a resident

       8      of Levittown, and I will talk about that a little

       9      shortly.

      10             I also represent this district that you are

      11      all in right now.

      12             I also happen to chair the Consumer

      13      Protection Committee.

      14             And this hearing is also co-chaired by my

      15      colleagues here:

      16             We have Senator Skoufis of Investigations

      17      Committee, and Senator Kavanagh from the Housing

      18      Committee.

      19             Along with members of the Long Island

      20      delegation, I have Senator Kaminsky and

      21      Senator Brooks with me as well.

      22             And we'll have more joining.

      23             I am a resident of Levittown, and I'm saying

      24      that because many of you here know the history of

      25      Levittown, and how institutional discrimination







                                                                   6
       1      plagued that community.

       2             And after the passage of the Civil Rights Act

       3      and the Fair Housing Act, we would think this kind

       4      of segregation and discrimination would end.

       5             That's hardly the case, and it's evidenced by

       6      "Newsday's" investigation, where they found unequal

       7      treatment of individuals wanting the American Dream,

       8      which is to purchase a house.

       9             That's why we are having this hearing.

      10             We have a number of panels coming up shortly,

      11      so that we can get the facts, get recommendations,

      12      and an opportunity for us elected officials that

      13      represent you to act.

      14             You know, while I sit here, I think of what

      15      Martin Luther King said.

      16             "An injustice anywhere is a threat to justice

      17      everywhere."

      18             With that, I'm going to turn this over to my

      19      partner here, Senator Skoufis, from the

      20      Investigations Committee.

      21             Thank you.

      22             SENATOR SKOUFIS:  Thank you very much,

      23      Senator Thomas.

      24             And a very good morning to everyone who's

      25      here.







                                                                   7
       1             We gather today in an attempt to begin

       2      addressing an issue that strikes at the very core of

       3      who we are as a state and as a people.

       4             Ever since the Dutch and English co-existed

       5      in the 1600s, New York State has long possessed a

       6      reputation of unmatched embrace and diversity.

       7             In the 1690s, accused witches in Salem,

       8      Massachusetts, fled their colony for ours, knowing

       9      they would find safe, inclusive refuge.

      10             In the late nineteenth and early twentieth

      11      centuries, New York's harbor would welcome

      12      12 million individuals of varied races, ethnicities,

      13      and religions, all seeking a shot at the

      14      American Dream.

      15             And over the last few years, people across

      16      our country have looked to New York State for

      17      inspiration amidst rampant xenophobia, a dramatic

      18      surge in racism, and an unnerving resurgence of hate

      19      crimes.

      20             That is why, ladies and gentlemen, the issues

      21      raised by "Newsday's" recent expos� must begin to be

      22      addressed by this body.

      23             These alarming allegations run contrary to

      24      our proud 400-year history.

      25             This is not who we are, or at a minimum, this







                                                                   8
       1      is not who we ought to be.

       2             Make no mistake, discrimination has, and

       3      likely will, always continue to linger throughout

       4      society.

       5             But to witness it in such stark, systematic

       6      terms, here on Long Island, here in New York State,

       7      is offensive, repugnant, and unacceptable.

       8             Which brings us to today.

       9             Our Senate committees will begin the process

      10      of understanding what happened, how it happened, why

      11      it happened, and more importantly, what safeguards

      12      can be put in place to prevent it from happening

      13      again.

      14             As a final note, I would like to publicly

      15      commend "Newsday" for their enormous undertaking and

      16      public service.

      17             At a time when some people in our country

      18      odiously refer to the press as enemies of the

      19      people, "Newsday's" expos� is the latest

      20      demonstration of the exact opposite: they're the

      21      conscious of our nation.

      22             With that, I look forward to today's

      23      testimony, and turn it over to my fellow co-chair,

      24      Senator Brian Kavanagh.

      25             SENATOR KAVANAGH:  Thank you, Senator Skoufis







                                                                   9
       1      and Senator Thomas.

       2             I will be brief.

       3             This is the seventh hearing of the

       4      Housing Committee.

       5             We have been proud to do one of those

       6      hearings previously, jointly, with the

       7      Investigations and Government Operations Committee.

       8             And I want to also begin by thanking

       9      "Newsday" for the extraordinary work over the course

      10      of many years.

      11             And the -- I also would like to add my thanks

      12      to the staff of our committees, and all the

      13      committee members, who worked very quickly to pull

      14      together this hearing together.

      15             It's just a few weeks ago that we were, you

      16      know, educated, and some of us enraged, by some of

      17      the things we read in "Newsday".

      18             And we thought it was very important that we

      19      promptly engage in this very public forum, to

      20      educate ourselves about what has been uncovered by

      21      this investigation, what the various perspectives of

      22      the folks involved in the industry, folks

      23      responsible for overseeing the industry, are, and

      24      hopefully, to look for steps we can take proactively

      25      in the coming legislative session.







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       1             You know, the Housing Committee has been

       2      engaged over the course of the last 11 months in

       3      reviewing every aspect of our housing markets

       4      throughout the state, with an understanding that

       5      most people view housing in New York as an aspect of

       6      our society that is in crisis.

       7             We have people throughout New York State who

       8      are unable to find homes that are adequate, where

       9      the quality and safety standards are high, and where

      10      they can afford to live and work in our communities

      11      and raise their families there.

      12             We took tremendous steps to alter the nature

      13      of the rental market, not only fundamentally

      14      changing the rent-stabilization system in New York,

      15      to ensure that we closed loopholes that have, for a

      16      very long time, diminished the effectiveness of that

      17      system, but also through the Housing Stability and

      18      Tenant Protection Act, addressing many inequities

      19      between landlords and tenants in every aspect of the

      20      manner in which they interact.

      21             But we know, we knew even before, you know,

      22      "Newsday's" publication on November 17th, that our

      23      work is far from done, and that's because we know

      24      that:

      25             There are affordability issues;







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       1             There are people facing foreclosure, and

       2      other issues;

       3             There are housing-quality issues that we

       4      uncovered in a related investigation on code

       5      enforcement, and the deficiencies of that system,

       6      which is something we'll also be taking up in the

       7      next year.

       8             But, of course, we know that the -- all the

       9      work we do -- all the work we do in government, all

      10      the work we do in our communities -- is diminished

      11      if New Yorkers cannot count on fair and equal access

      12      to housing, regardless of their -- the personal

      13      characteristics of themselves and their families.

      14             So, again, it's very important what we're

      15      doing today.

      16             We thank all of the witnesses in advance who

      17      testify today.

      18             And just to take -- this is the cover of

      19      "Newsday" from the second day of their coverage, and

      20      the headline is "Not Here."

      21             And "Not Here" was a reference to the

      22      apparent practice of steering certain families

      23      from -- to particular communities, and excluding

      24      certain communities from the work of realtors and

      25      brokers who were dealing with families seeking







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       1      housing.

       2             Hopefully, at some point, we can look at the

       3      work we do here, and the work of people across this

       4      great state, and "Not Here" will refer to the fact

       5      that we do not tolerate these kinds of practices in

       6      New York, either on Long Island or anywhere in the

       7      state.

       8             So, thank you.

       9             SENATOR SKOUFIS:  Senator Kaminsky.

      10             SENATOR KAMINSKY:  Thank you.

      11             Having the privilege of representing

      12      Long Island also means confronting its -- its

      13      difficult challenges.

      14             The "Newsday" reporting reflected in the

      15      culmination of a three-year investigation, is a

      16      scandal of the highest order.

      17             This is a national embarrassment.

      18             It's a -- it's a disgrace, and it's an

      19      affront to everything that we stand for as

      20      Americans, New Yorkers, and Long Islanders.

      21             Today we are going to use the investigatory

      22      powers of the Senate, which, frankly, for too long,

      23      have gone unused and sat on a shelf.  And we are

      24      going to use them to try to, as best we can, uncover

      25      what it is that could cause a headline this







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       1      startling.

       2             As a former prosecutor, I believe in evidence

       3      much more than I believe in rhetoric.

       4             And the evidence of hundreds of hours of

       5      recordings is overwhelming, that there is massive

       6      systemic discrimination in the real estate business

       7      that continues the legacy of segregation today.

       8             That's something that we have to find a way

       9      to dismantle, figure out what's at the root cause,

      10      and those who are responsible for it must be held

      11      accountable.

      12             That's what today is about.

      13             The one thing that's troubling every

      14      Long Islander --

      15             I was fortunate enough to grow up here, as so

      16      many others were in this room as well.

      17             -- is that:  When has -- when has

      18      discrimination, or any other crisis, become so

      19      insidious, that people just go about their day,

      20      knowing somewhere in the back of their head that

      21      it's happening, yet not doing much about it?

      22             "Newsday's" reporting has shaken us to our

      23      very core, and has woken up this island to something

      24      that many of have suspected or known has been there

      25      all along, yet just treated it as the way it might







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       1      be, perhaps the way it is.

       2             That's unacceptable.

       3             We're going to get at the root of undoing

       4      that today, and I'm very proud to be part of that

       5      process.

       6             Hopefully, if "Newsday" started this story,

       7      this is the middle of that story, and I hope we take

       8      strong action, going forward, to finish this story

       9      and put us in a better path, going forward, for a

      10      just and equal Long Island.

      11             SENATOR SKOUFIS:  Senator Brooks.

      12             SENATOR BROOKS:  Thank you.

      13             Good morning, everyone.

      14             My name is John Brooks.  I represent the

      15      southeastern portion of Nassau County and

      16      southwestern portion of Suffolk County -- or, just

      17      the opposite, southwestern Nassau.

      18             This is a concern that all of us take very,

      19      very seriously.

      20             My family happens to have lived on

      21      Long Island for over 400 years.

      22             The community that we were, when my family

      23      first came here, was one that was open to everyone.

      24             Most of my family were old baymen.  They had

      25      houses along the shore and watched this community







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       1      grow.

       2             It is alarming, the information that we see

       3      in the "Newsday" report.

       4             We should be in a situation where anyone that

       5      lives here should live in the community of their

       6      choice, not have that dictated to them by others.

       7             I want to be very brief, but I want everyone

       8      to understand, that all of us here take this

       9      situation very, very seriously, and intend to take

      10      corrective measures, going forward.

      11             I welcome the comments of everyone today.

      12             I think we are still in a discovery period,

      13      but I think all of us, as a community, are

      14      collectively concerned with what has been

      15      demonstrated in this report, and what we have to

      16      change, moving forward.

      17             So I thank everyone for being here.

      18             And I think we need to listen and learn

      19      today, and then put together a plan that puts

      20      corrective actions in the past -- in -- in the

      21      position to move us forward.

      22             Thank you.

      23             SENATOR SKOUFIS:  Thank you, Senator Brooks.

      24             We're going to start with our first witness.

      25             Arthur Brown, if you can please come forward.







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       1             Arthur Brown is the Long Island Divided

       2      project director from "Newsday."

       3             We felt, as committees here on the dais, that

       4      it was important for "Newsday" to kick off this

       5      hearing with a presentation of their investigation;

       6      lay the groundwork.

       7             We acknowledge that it is somewhat unusual to

       8      have the press/the media here testifying at a

       9      hearing.

      10             And so, with that understanding, the

      11      committees here have agreed, with "Newsday," to

      12      simply receive your testimony and leave it at that.

      13             We will not be requesting answers to

      14      questions.

      15             We really do appreciate your presence here.

      16             ARTHUR BROWN:  Thank you very much.

      17             SENATOR SKOUFIS:  Oh, please.

      18             We're going to be swearing in each of the

      19      witnesses.

      20             So if, actually, you could please stand up

      21      and raise your right hand.

      22             Do you solemnly swear that you will tell the

      23      truth, the whole truth, and nothing but the truth?

      24             ARTHUR BROWN:  I do.

      25             SENATOR SKOUFIS:  Thank you.







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       1             ARTHUR BROWN:  Good morning,

       2      Chairman Skoufis, Chairman Kavanagh, and

       3      Chairman Thomas.

       4             Good morning to all the senators who have

       5      taken an interest and are participating:

       6      Senator John Brooks, Jim Gaughran, Tom Kamin --

       7      Todd Kamisky, Anna Kaplan.

       8             And, good morning to everyone in the

       9      audience.

      10             I'm honored to represent "Newsday," and to

      11      explain how "Newsday" conducted the three-year

      12      investigation that led to our being here today.

      13             I'm happy to do so, while noting that news

      14      organizations rarely appear in this type of forum.

      15             We leave our work to speak for itself.

      16             With that in mind, I want to make two points

      17      clear.

      18             First, "Newsday's" report aimed for

      19      transparency, including how we conducted the

      20      investigation and how we reached our findings.

      21             My statement will explain facts already in

      22      the public domain in a way that I hope you find

      23      helpful.

      24             Second, "Newsday's" appearance here does not

      25      suggest an opinion about any legislative action you







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       1      may or may not choose to take.

       2             Long Island Divided reported evidence of

       3      widespread disparate treatment of minority

       4      homebuyers, based on a paired testing program, equal

       5      on a local basis to once-a-decade nationwide surveys

       6      by the department of housing and urban development.

       7             "Newsday" conducted that program in

       8      consultation with nationally-recognized experts in

       9      fair-housing standards and enforcement.

      10             We based Long Island Divided's findings about

      11      individual tests on the judgments of two of those

      12      experts:  Fred Freiberg, executive director of the

      13      Fair Housing Justice Center, and Robert Schwemm,

      14      professor at the University of Kentucky, College of

      15      Law, and specialist in fair-housing standards and

      16      law.

      17             "Newsday" cited a test only after Freiberg

      18      and Schwemm independently detected evidence of

      19      disparate treatment by a real estate agent, and only

      20      after informing agents and their corporate

      21      leadership about "Newsday's" tentative findings;

      22      offering them the opportunity to review what

      23      appeared to be the evidence, including undercover

      24      videos, in private; inviting their comments or

      25      explanations; and subjecting the evidence to fresh







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       1      review when agents or their companies provided

       2      information that demanded consideration.

       3             The general results were as follows:

       4             40 percent of "Newsday's" 86 paired

       5      tests (34) showed evidence of disparate treatment

       6      according to the judgments of our two experts.

       7             The rate for Black testers was 49 percent;

       8             For Hispanic testers, 39 percent;

       9             And for Asians, 19 percent.

      10             It's important to remember that the rates

      11      reflect evidence of disparate treatment as discerned

      12      by the two experts.

      13             They do not reflect conclusions of disparate

      14      treatment or legal findings.

      15             Those are the province of regulatory

      16      authorities and the courts, not journalism.

      17             Since shortly after the passage of the

      18      federal Fair Housing Act a half century ago, courts

      19      have recognized paired testing as the most viable

      20      tool for documenting housing discrimination.

      21             Two individuals with comparable

      22      characteristics, except difference -- different in

      23      race or ethnicity, present comparable requests for

      24      housing to a real estate agent.

      25             "Newsday" recruited 25 testers.  They were







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       1      White, Black, Hispanic, and Asian.  They ranged from

       2      a 20-something student to a 60-something lawyer.

       3      They included both ordinary citizens and actors.

       4             "Newsday" paid testers $16 an hour.

       5             The Fair Housing Justice Center, which does

       6      more paired testing than any organization in the

       7      United States, gave "Newsday's" testers daylong

       8      training in how to speak with agents.

       9             A Fair Housing Justice Center staff member

      10      helped develop testing protocols for "Newsday's"

      11      investigation, and assisted in analyzing test

      12      results.

      13             Additionally, Professor Schwemm, who is the

      14      author of "Housing Discrimination: Law and

      15      Litigation," widely accepted as the definitive

      16      treatise on the subject, gave "Newsday's" reporters

      17      a seminar in the fair-housing law over the course of

      18      two days.

      19             Before they met an agent, "Newsday's" [sic]

      20      matched two testers as closely as possible in

      21      gender, age, and educational background.

      22             "Newsday" equipped testers with comparable

      23      undercover identities, including names, marital

      24      status, and fictional addresses, employment, and

      25      credit scores.







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       1             Testers memorized those details, and

       2      "Newsday" drilled them on their identities.

       3             "Newsday" also gave the testers the search

       4      criteria each would present to an agent.

       5             The criteria included:

       6             The maximum house price.

       7             In our test, prices ranged from $400,000 to

       8      $7 million.

       9             The number of bedrooms: 3.

      10             And a geographic search zone; for example, an

      11      hour from Manhattan, or 30 minutes from communities

      12      such as Bethpage and Port Jefferson.

      13             "Newsday" verified that agents had houses to

      14      sell when meeting with testers, based on analyses

      15      provided by Zillow, the online home site search --

      16      home-search site.

      17             Zillow draws an inventory of available homes

      18      daily from the Multiple Listing Service of

      19      Long Island, the computerized system used by agents

      20      to track the market and select possible houses for

      21      buyers.

      22             The Multiple Listing Service informed

      23      "Newsday" that it does not keep that kind of

      24      historical data.

      25             As permitted by New York law, "Newsday"







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       1      outfitted the testers with miniature hidden video

       2      equipment that memorialized how the testers

       3      conducted themselves, and how the agents responded

       4      in meetings and on house tours.

       5             A professional court reporter created typed

       6      transcripts of the meetings between testers and

       7      agents.

       8             "Newsday" journalists reviewed the transcript

       9      for accuracy, and used them to verify that the

      10      testers had, in fact, presented matching profiles to

      11      agents.

      12             The transcripts of each test enabled

      13      reporters also to detect whether testers had

      14      inadvertently varied from script.

      15             For example, one tester may have asked an

      16      agent for help finding a home within 20 minutes of

      17      Garden City, while the other tester focused

      18      [audio malfunction] on an area 30 minutes from

      19      Garden City.

      20             "Newsday" disqualified tests where errors

      21      like that occurred or recording equipment failed.

      22             In the 86 tests where the testers matched up,

      23      "Newsday" compared the transcripts for signs that

      24      the agent had or had not given comparable

      25      information or service to both testers.







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       1             On a different track, "Newsday" plotted the

       2      5,763 listings provided by agents on maps down to

       3      census tracts.

       4             That allowed us to visualize whether an agent

       5      had pointed two testers to overlapping or different

       6      communities.

       7             Determined the demographic makeup of

       8      neighborhoods selected for each tester; in

       9      particular, the percentage of the population

      10      identified as White, and compute the average

      11      proportion of White residents in the areas

      12      recommended to White and minority testers.

      13             When the transcripts and/or listings' maps

      14      suggested the possibility of disparate treatment,

      15      "Newsday" gave our experts, Fred Freiberg and

      16      Robert Schwemm, summaries of the tests, relevant

      17      transcript excerpts, and access to the listing maps,

      18      and stood ready to answer any of their questions.

      19             Mr. Freiberg and Professor Schwemm rendered

      20      opinions in writing.  Neither knew what the other

      21      had found.

      22             As I said before, "Newsday" cited a test as

      23      showing evidence of disparate treatment only when

      24      they reached similar conclusions.

      25             Plotting the listings by census tract also







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       1      enabled "Newsday" to calculate, with the help of a

       2      trained statistician, broad demographic patterns;

       3      for example, agents selected houses for Black

       4      testers most frequently in neighborhoods with

       5      comparatively low White representations, and less

       6      frequently in neighborhoods with higher White

       7      concentrations.

       8             And those phenomenon flipped when the testers

       9      were White.

      10             "Newsday" located the test in 10 zones, that

      11      stretch from Nassau County's western most border

      12      with Queens, out to the Hamptons, as well as the

      13      Gold Coast on the North Shore, down to many

      14      communities on the South Shore.

      15             The 86 tests covered about 83 percent of

      16      Long Island's 2.3 million-person population,

      17      including 80 percent of the White population and

      18      88 percent of the minority population.

      19             So, that was an outline of how "Newsday"

      20      conducted the Long Island Divided investigation.

      21             All this information is both, available, and

      22      placed in the context of "Newsday's" findings, at

      23      www.newsday.com/divided.

      24             There is plenty of to read and plenty to

      25      view, including a behind-the-scenes video explainer







                                                                   25
       1      of the investigation, and a 40-minute documentary

       2      that shows the investigation in progress, presents

       3      its findings, and places them in historical context.

       4             Given its importance, "Newsday" has moved the

       5      project out from behind a subscriber-pay wall to

       6      allow greater access, again, at

       7      www.newsday.com/divided.

       8             So I thank you very much for this opportunity

       9      to have spoken to you about "Newsday's" work, and

      10      I wish you well in all of your important endeavors.

      11             SENATOR SKOUFIS:  Thank you very much,

      12      Mr. Brown.

      13             We're very grateful for your presence here.

      14             And we recognize it's unusual to have a

      15      member of the media coming to testify, but I think

      16      your outline really does set the stage for the rest

      17      of this hearing.

      18             We're very grateful.

      19             Thank you.

      20             ARTHUR BROWN:  Well, thank you very much.

      21             SENATOR SKOUFIS:  I also want to acknowledge

      22      that there are a number of other senators who are

      23      here on the dais.

      24             We have Senator Phil Boyle, who I know just

      25      walked in; Senator Anna Kaplan;







                                                                   26
       1      Senator Jim Gaughran.  And we've also been joined by

       2      Assemblyman Chuck Lavine.

       3             SENATOR THOMAS:  We're going to go next to

       4      Panel 1, local officials.

       5             And I would like to call county executive of

       6      Nassau County, Laura Curran, to testify.

       7             LAURA CURRAN:  Thank you very much,

       8      Senator Thomas.

       9             SENATOR THOMAS:  Thank you, Laura.

      10             Before you start, I want to swear you in.

      11             Do you solemnly swear that you will tell the

      12      truth, the whole truth, and nothing but the truth?

      13             LAURA CURRAN:  I do.

      14             SENATOR THOMAS:  Thank you.

      15             Please.

      16             LAURA CURRAN:  Thank you very much,

      17      Senator Thomas, Senators, Assemblyman, for convening

      18      this testimony and inviting me to testify to you.

      19             I want to start by thanking "Newsday" for

      20      this comprehensive and thorough report.

      21             I'm sure we all read every word, and I think

      22      it's fair to say we were shocked, but not surprised.

      23             So I'm here today to talk about what we're

      24      doing on the county level to combat historic housing

      25      discrimination.







                                                                   27
       1             Last month "Newsday" revealed results of a

       2      three-year investigative project, revealing blatant

       3      housing discrimination throughout our county and,

       4      indeed, our island.

       5             The investigation uncovered an inexcusable

       6      reality that offends our most cherished values as

       7      Americans:  That all of us are created equal, and

       8      all of us deserves an equal shot.

       9             It is important to first acknowledge that the

      10      practices revealed, racial steering and other

      11      discriminatory practices, are not a new phenomenon.

      12             Racial discrimination in housing has a long

      13      and painful history on Long Island.

      14             We must be honest in order to confront it and

      15      clear about what we must do.

      16             Housing discrimination is wrong and it is

      17      illegal.

      18             That's something the investigation showed.

      19             The thing that I found quite troubling in

      20      this investigation is that, often, people don't know

      21      they are being discriminated against, which is --

      22      makes it even more pernicious.

      23             Housing discrimination closes doors of

      24      opportunity and robs people of their shot at the

      25      American Dream.







                                                                   28
       1             In Nassau County, we will not tolerate

       2      unequal treatment of our residents.

       3             That's why, since I've taken office, my

       4      administration has made significant investments

       5      promoting equal and fair access to housing for all

       6      of our residents.

       7             Earlier this year, the County reached an

       8      important settlement of a 14-year lawsuit, where we

       9      made a historic commitment to the promotion of

      10      affordable housing across our county, especially so

      11      in areas with access to good transportation and good

      12      public schools.

      13             As part of this settlement, we kicked off an

      14      advertising campaign called "Welcome to Nassau,"

      15      making clear our commitment to fair-housing laws.

      16             But "Newsday's" report makes clear we have

      17      much work left to do.

      18             Last month, I stood alongside civil rights

      19      leaders, stakeholders, and county legislators from

      20      both parties to announce that Nassau County will

      21      take comprehensive and bipartisan action to combat

      22      housing discrimination.

      23             We will do this through increased

      24      enforcement, education, and community engagement.

      25             I named Deputy County Attorney







                                                                   29
       1      Errol E. Williams, who is here with us this morning,

       2      as special housing counsel, to be charged with

       3      coordination of the County's action plan on housing

       4      discrimination.

       5             Errol Williams most recently played a lead

       6      role in the historic settlement I spoke about

       7      earlier, reached in March.  And I am pleased that he

       8      has accepted this new challenge.

       9             The County is issuing, also, a request for

      10      proposals for legal services through our county

      11      attorney's office, that will increase enforcement of

      12      and compliance with open housing laws through

      13      enforcement of administrative proceedings, plenary

      14      actions, and special investigations.

      15             I was pleased to reach bipartisan agreement

      16      with our county legislature to increase staffing at

      17      the county human rights commission, including the

      18      addition of an investigator and an administrative

      19      law judge, to assist with the resolution of

      20      fair-housing complaints.

      21             I've also directed a review of existing

      22      forums and processes at the human rights commission

      23      to make sure we are handling housing complaints and

      24      investigations as best we can.

      25             Rodney McCray, who is executive director of







                                                                   30
       1      our human rights commission, will lead this effort.

       2             We are establishing the Nassau County Fair

       3      Housing Advisory Board.  So this is a permanent

       4      county entity, not temporary, to be comprised of

       5      community stakeholders and advocates and those from

       6      the real estate industry, and they're tasked with

       7      advising and providing the county with

       8      recommendations regarding the promotion of fair and

       9      equal housing practices and policies.

      10             We realize education is incredibly important.

      11             Since most people often, as was found in this

      12      investigation, don't know that they're being

      13      steered, don't know that they're being discriminated

      14      against.

      15             So we must educate prospective buyers and

      16      renters to ensure that they understand fair-housing

      17      laws.

      18             That's why I've directed my administration to

      19      initiate a robust educational campaign, including

      20      workshops and forums throughout the county, designed

      21      to inform residents regarding housing rights and

      22      resources that are available to them.

      23             And there are resource available to them.

      24      Sometimes the challenge is connecting people to

      25      those resources.







                                                                   31
       1             In the coming weeks, we will announce the

       2      first educational workshops, which will be

       3      spearheaded by the human rights commission, and by

       4      Bishop Lionel Harvey, who is our deputy director for

       5      diversity and community engagement, and together

       6      with the office of minority affairs, the office of

       7      Hispanic affairs, and the office of Asian-American

       8      affairs.

       9             I've also directed my administration to

      10      develop a new multimedia and multilingual

      11      public-awareness campaign to increase awareness

      12      about our commitment to and enforcement of

      13      fair-housing laws.

      14             We also know that zoning localities are

      15      important partners in this effort, and that's why we

      16      will engage the already-existing Nassau County Fair

      17      Housing Committee Consortium members, which is

      18      comprised of towns and villages, to promote

      19      fair-housing policies at the municipal level as

      20      well, which is incredibly important.

      21             Lastly, I'm pleased that the Nassau County

      22      IDA (Industrial Development Agency) Board has

      23      directed its staff to review their incentive

      24      policies, to ensure the promotion of fair housing,

      25      and eliminate discriminatory practices with those







                                                                   32
       1      they do business with.

       2             These actions represent a starting point,

       3      I acknowledge that.

       4             I look forward to working with you, Senators,

       5      with my partners in -- and Assemblyman, and my

       6      partners in state government, and at the local

       7      government, to build the momentum.

       8             I am grateful that the state Senate has

       9      called this hearing, and has taken a real interest

      10      in this incredibly important issue.

      11             The problem we seek to address has deep

      12      roots, and making real progress will require our

      13      continued cooperation and resolve.

      14             I will ensure that the -- that Nassau County

      15      proactively cooperates with state authorities and

      16      any ongoing or future efforts to hold real estate

      17      brokers, property-management firms, and lenders

      18      accountable regarding compliance with open and

      19      fair-housing laws.

      20             We can't guarantee equal outcomes in America,

      21      but let's work together, to create a county, to

      22      create an island, where kids from every background

      23      can grow up knowing that, no matter what you are,

      24      what you look like, where you live, you can write

      25      your own story.







                                                                   33
       1             Thank you.

       2             SENATOR THOMAS:  Thank you, County Executive

       3      Laura Curran.

       4             We are also joined by Suffolk County

       5      Executive Steve Malone.

       6             Sir, can you please stand up so we can swear

       7      you in?

       8             Raise your right hand.

       9             Do you solemnly swear that you will tell the

      10      truth, the whole truth, and nothing but the truth?

      11             STEVE BELLONE:  I do.

      12             SENATOR THOMAS:  Thank you.

      13             Please, be seated.

      14             STEVE BELLONE:  Good morning,

      15      Chairman Thomas, Chairman Skoufis,

      16      Chairman Kavanagh, members of the New York State

      17      Senate who are here today, and Assemblyman as well.

      18             It's good to be with you, and I thank you for

      19      the opportunity to speak with you here today.

      20             We're all aware, of course, of the "Newsday"

      21      investigation that brought the issue of housing

      22      discrimination out of the shadows on Long Island.

      23             The results of this three-year investigation

      24      were disturbing and unacceptable.

      25             Using paired testers, "Newsday" found that







                                                                   34
       1      there were numerous instances where real estate

       2      agents provided unequal treatment based on race, in

       3      seemingly clear violations of fair-housing laws.

       4             Almost immediately after this report was

       5      published we took action.

       6             My staff met with the New York State Attorney

       7      General to discuss how we can improve enforcement

       8      capabilities.

       9             I also announced that the County would

      10      initiate a four-point plan to combat housing

      11      discrimination.

      12             First, we said we would strengthen our

      13      ability to conduct housing-discrimination

      14      investigations.

      15             We are issuing a request for proposals, to

      16      select a qualified organization to partner with, to

      17      enforce fair-housing laws, including funding the

      18      kind of testing that was employed during the

      19      "Newsday" investigation.

      20             Second, we're expanding and strengthening the

      21      capabilities of our human rights commission.

      22             I've authorized the hiring of an additional

      23      investigator for the purpose of examining alleged

      24      fair-housing violations.  And we will add additional

      25      investigators as required by caseloads.







                                                                   35
       1             We are also in the process of hiring

       2      three administrative law judges that will be there

       3      to expedite claims of housing discrimination.

       4             Third, we will issue a request for

       5      qualifications, to partner with organizations, to

       6      provide education and training.

       7             We want the general public to understand

       8      fair-housing laws, and what housing discrimination

       9      looks like, and where they can go when they have

      10      experienced it.

      11             Fourth, knowing that this problem cannot be

      12      solved alone, we've begun reaching out to leading

      13      industry stakeholders, including the Long Island

      14      Board of Realtors, to begin the process of

      15      identifying solutions that would help ensure better

      16      compliance of federal and New York laws for real

      17      estate agents.

      18             On the state level, I believe that we need a

      19      consumer bill of rights regarding fair housing and

      20      interaction with real estate brokers and mortgage

      21      lenders.

      22             There are currently several bills, I know,

      23      that are pending in the state Legislature that

      24      consider the concept.

      25             I'd welcome the opportunity to meet with







                                                                   36
       1      members of the state Senate, to discuss ideas to

       2      better inform potential homebuyers.

       3             Currently, real estate professionals are

       4      required to complete a total of 22 1/2 hours of

       5      continuing education, with only 3 hours of

       6      instruction concentrated in fair housing and

       7      discrimination.

       8             This investigation highlights the need to

       9      thoroughly examine all aspects of the state's

      10      education and training requirements and standards

      11      involved in fair housing.

      12             Finally, again, I want to thank each of you

      13      for coming here today, and for highlighting this

      14      issue and for focusing on this issue.

      15             There are many advocates who have been

      16      working on this issue for a number of years, of

      17      working to address unjust and biased treatment.

      18             Now is the time, this is a moment of

      19      opportunity, to address a legacy of housing

      20      segregation and discrimination that dates to the

      21      very beginning of America's first suburb.

      22             We have to address this challenge on a

      23      regional basis.

      24             And I want to thank my colleague to the west,

      25      to my left, Nassau County Executive Laura Curran,







                                                                   37
       1      for her leadership on this issue.

       2             Please continue to utilize me, and us, as a

       3      resource, a partner.

       4             And together we will work to break down

       5      barriers and to create equal opportunity for all.

       6             Thank you very much.

       7             SENATOR THOMAS:  Thank you to both county

       8      executives for showing leadership after that

       9      "Newsday" expos�.

      10             It's very hard on people to understand why

      11      this matters.

      12             And both of your leadership, and this plan

      13      that both have, basically, talked about in their

      14      testimony, is -- is -- is very encouraging.

      15             Before I start with questions, let me just

      16      acknowledge Senator Liu who has joined us as well.

      17             Senator Kaminsky.

      18             SENATOR KAMINSKY:  Thank you.

      19             County Executive Curran, I have just a --

      20      some quick questions for you.

      21             And, very grateful for your leadership on

      22      this.  And we all look forward to working with you,

      23      as well as County Executive Bellone, going forward

      24      on this.

      25             You were present when Mr. Brown testified







                                                                   38
       1      from "Newsday" and talked about the results of the

       2      investigation.

       3             For a good reason, we could not ask him

       4      questions, but I wonder if you came away with the

       5      same conclusion that I did?

       6             That, based on how they scored what would be

       7      disparate impact, that it seemed to me that they

       8      were very conservative in how they judged that; only

       9      wanted to make sure, in very demonstrable

      10      situations, based on comparable evidence, and they

      11      always erred on the side of throwing something out

      12      that wouldn't reach that, that these numbers are

      13      actually, probably, in practice, greater than what

      14      they're reported to be.

      15             In other words, the amount of discrimination

      16      reported, by percentage, whether it's 49, 39, 19,

      17      what have you, is probably more than that in

      18      actuality.

      19             Did you get that same impression?

      20             LAURA CURRAN:  Senator Kaminsky, yes, I did

      21      have that same thought.

      22             And as Arthur Brown testified here this

      23      morning, and as was made very clear in the report,

      24      they -- it is very clear to me that they erred on

      25      the side of caution, and that the numbers are







                                                                   39
       1      probably not as low as -- as were reported.

       2             The -- we heard Arthur Brown say that, if

       3      there was any doubt, if there was any cloudiness in

       4      the sound, if there was any shadow of a doubt, they

       5      discounted that example.

       6             So I believe that this shone -- this report

       7      shone a very bright light on the problem.

       8             And I -- I agree with your assessment that

       9      the problem was probably even worse.

      10             SENATOR KAMINSKY:  I appreciate that.

      11             And I think what that should mean for anybody

      12      watching or participating in this hearing, going

      13      forward, is, certainly, for African-Americans, and

      14      perhaps for Hispanic or other groups, that we're

      15      talking about an amount of discrimination that is

      16      actually staggering.

      17             It's probably a majority of whole groups of

      18      people are being discriminated against, not just a

      19      here and a there, or sometimes, or more often than

      20      you think, but, almost all the time, or -- or -- or,

      21      certainly, more than half the time.

      22             And I -- I just find that to be even more

      23      troubling than any of the -- you know, any of these

      24      headlines can -- can suggest.

      25             So, as we move into the fact-finding phase,







                                                                   40
       1      and as we work with both county executives, to

       2      figure out what's going on, I just think it's

       3      important that we understand the gravity of the

       4      problem ahead of us.

       5             And we're lucky to have two great partners to

       6      work with as we move forward to tackle this problem.

       7             LAURA CURRAN:  Thank you, Senator.

       8             STEVE BELLONE:  Thank you, Senator.

       9             SENATOR THOMAS:  Senator Kavanagh?

      10             SENATOR KAVANAGH:  No, I'm good.

      11             SENATOR THOMAS:  Anna?

      12             LAURA CURRAN:  Thank you very much.

      13             STEVE BELLONE:  Thank you very much.

      14             And, again, we look forward to working

      15      together with you.

      16             LAURA CURRAN:  Absolutely.

      17             SENATOR THOMAS:  Thank you.

      18             SENATOR SKOUFIS:  And now I would like to

      19      call up our next panel:  Fred Freiberg from the

      20      Fair Housing Justice Center, and Elaine Gross

      21      from Erase Racism.

      22             Before you sit down, if can you just raise

      23      your right hands.

      24             Do you solemnly swear that you'll tell the

      25      truth, the whole truth, and nothing but the truth?







                                                                   41
       1             FRED FREIBERG:  Yes.

       2             ELAINE GROSS:  I do.

       3             SENATOR SKOUFIS:  Thank you.

       4             Welcome, and thank you for being here.

       5             FRED FREIBERG:  My name is Fred Freiberg.

       6      I'm the executive director and co-founder of the

       7      Fair Housing Justice Center, a regional civil rights

       8      organization based in New York City.

       9             Our mission is to eliminate housing

      10      discrimination, promote policies and programs that

      11      foster open, accessible, and inclusive communities,

      12      and to strengthen enforcement of fair-housing laws.

      13             [Audio malfunction] in 2005, we serve a

      14      region that includes all of New York City and seven

      15      surrounding New York counties, including Dutchess,

      16      Nassau, Orange, Putnam, Rockland, Suffolk, and

      17      Westchester.

      18             Our service area contains, roughly,

      19      65 percent of the state's population and 3 percent

      20      of the nation's.

      21             In terms of my personal background, I've been

      22      working in fair-housing enforcement for nearly

      23      44 years.

      24             I've supervised more than 12,000 testing

      25      investigations in 20 states, personally participated







                                                                   42
       1      in over 1500 tests.

       2             I've been named as a witness in over

       3      400 fair-housing cases.

       4             I directed a national testing program for the

       5      civil rights division of the department of justice

       6      that I helped to establish in 1992.

       7             I was the field director for two national

       8      HUD-sponsored studies.

       9             Relative -- relevant to the hearing today,

      10      I was also a consultant, as you have heard, to

      11      "Newsday" on a three-year investigation into real

      12      estate sales practices.

      13             From December 2015 to March 2017, "Newsday"

      14      contracted with the FHJC to train testers, assist in

      15      the design of testing protocols for the project, and

      16      assist with coordinating some of the early tests.

      17             After March 2017, until the story was

      18      released in November 2019, I continued to serve as

      19      an unpaid consultant to "Newsday" on this project.

      20             In my short remarks today I want to make

      21      several points.

      22             First:  Let me begin by expressing my

      23      appreciation to Senators Thomas, Skoufis, and

      24      Kavanagh, and all the members of the Senate

      25      committees they chair, for arranging this hearing,







                                                                   43
       1      and for providing me and others an opportunity to

       2      share our thoughts and recommendations.

       3             I'm here today with Elaine Gross of

       4      Erase Racism, and we've provided your committee with

       5      a joint set of recommendations in response to

       6      "Newsday's" investigation.

       7             It's a five-point plan, with recommendations

       8      for the State of New York; the U.S. Department of

       9      Housing and Urban Development; local, state, and

      10      federal enforcement agencies; and the real estate

      11      industry.

      12             Second:  I want to commend "Newsday" for the

      13      truly remarkable commitment of resources and

      14      personnel that it devoted to this investigation and

      15      story.

      16             It was a distinct privilege for me to work on

      17      this project with an incredibly conscientious

      18      objective and dedicated team of professional

      19      journalists.

      20             Third:  I found the "Newsday" -- the results

      21      of the "Newsday" testing investigation deeply

      22      troubling, though not particularly surprising.

      23             The results were entirely consistent with

      24      what my organization routinely finds in many of our

      25      testing investigations.







                                                                   44
       1             The problem of racial discrimination in

       2      housing is systemic.

       3             The problem is not limited to the sales

       4      market or the real estate industry.  The problem is

       5      not limited to Long Island.

       6             The start patterns of residential racial

       7      segregation in our metropolitan regions were created

       8      by the intentional and coordinated actions of the

       9      housing industry, government, and other institutions

      10      over many decades.

      11             The segregation has been sustained to this

      12      day by the very same institutions.

      13             Our nation has never fully implemented or

      14      vigorously enforced the federal Fair Housing Act.

      15             Residential racial segregation on

      16      Long Island, throughout the larger New York City

      17      region, and in many parts of the state of New York,

      18      creates a vicious cycle of inequality that continues

      19      to inflict serious harm on people and communities of

      20      color by locking African-American people and other

      21      populations out of many opportunities.

      22             Racial discrimination in housing not only

      23      presents a formidable barrier to renting an

      24      apartment or buying a home, and accumulating wealth

      25      from that investment, but it can also limit access







                                                                   45
       1      to high-performing schools, employment

       2      opportunities, health care, parks and recreational

       3      facilities, safe neighborhoods, and even healthy

       4      foods.

       5             Where one lives still matters.

       6             Residential racial segregation, reinforced by

       7      discriminatory housing practices, has profound, and

       8      often perilous and lasting, intergenerational

       9      consequences for the populations that are excluded

      10      and for the communities that are subsequently

      11      divided.

      12             Any remedies proposed to address racial

      13      discrimination documented by the "Newsday" report

      14      should be comprehensive in nature, and extend well

      15      beyond the discriminatory and odious practices of

      16      some real estate agents on Long Island.

      17             The FHJC currently has one of the strongest

      18      testing capabilities of any private fair-housing

      19      organization in the nation.

      20             We employ, on a part-time, as-needed basis,

      21      about 165 testers, all professional actors, who

      22      participate in undercover testing investigations.

      23             It's a diverse pool of people who

      24      collectively speak 28 languages.

      25             Over the past decade or so, the FHJC testing







                                                                   46
       1      investigations have led to the filing of more than

       2      100 successful legal challenges that have opened

       3      more than 65,000 units of housing to

       4      previously-excluded populations, and resulted in a

       5      total monetary recovery of over $39 million in

       6      damages and penalties.

       7             We have changed the way many housing

       8      providers, governments, and others do business, and

       9      obtained greater compliance with fair-housing laws.

      10             The FHJC filed the only two federal lawsuits

      11      against banks, alleging race and national-origin

      12      discrimination, in the 51-year history of the

      13      Fair Housing Act, based primarily on testing

      14      evidence.

      15             The FHJC conducted investigations into

      16      discrimination based on race or national origin, and

      17      land use and zoning practices, and in suburban

      18      affordable-housing programs.

      19             These investigations have resulted in federal

      20      litigation against the Town of Smithtown in

      21      Suffolk County; the Town of Oyster Bay, Village of

      22      Garden City, and Village of Great Neck Plaza in

      23      Nassau County; and the Town of Yorktown, the

      24      Town of Bedford, and the Town of Eastchester in

      25      Westchester County.







                                                                   47
       1             FHJC testing investigations also continue to

       2      uncover widespread discrimination in the rental

       3      market of the region, based on race, national

       4      origin, disability, and source of income.

       5             Fourth:  The nature of housing discrimination

       6      has changed over time.

       7             Prior to the passage of the fair-housing

       8      laws, discrimination was quite overt.

       9             African-American homeseekers were frequently

      10      met with slammed doors and racial epithets.

      11             Today, the image of a slammed door has to be

      12      replaced, to a large extent, with a revolving door,

      13      where people are politely escorted in, out of, and,

      14      ultimately, away from the desired housing.

      15             It all happens in such a subtle manner that

      16      the consumer is often unaware that discrimination

      17      has occurred.

      18             Violators simply have learned to conceal

      19      their illegal conduct.

      20             The real -- this reality calls into question

      21      the complaint-responsive approach that most public

      22      agencies have adopted to enforce fair-housing laws.

      23             And it's really quite simple:

      24             If victims of discrimination are unaware that

      25      discrimination is occurring, no complaints will be







                                                                   48
       1      filed.

       2             If no complaints are filed, no enforcement

       3      action occurs.

       4             If no enforcement action is taken, the

       5      illegal discrimination simply continues.

       6             While complaints of discrimination must be

       7      thoroughly and expeditiously investigated, our

       8      entire fair-housing enforcement paradigm needs to

       9      shift to one that places a greater emphasis on the

      10      proactive enforcement and use of testing to ferret

      11      out subtle and systemic forms of housing

      12      discrimination.

      13             This is one of the key lessons of the

      14      "Newsday" investigation.

      15             The burden for enforcing our fair-housing

      16      laws should not rest entirely on the shoulders of

      17      those who continue to be victimized, or, on a media

      18      outlet.

      19             Testing is a tool used by private

      20      fair-housing organizations to investigate

      21      housing-market practices.

      22             Testing can and should be used as often as

      23      possible to investigate housing discrimination

      24      complaints, because testing evidence often enables

      25      victims of discrimination to meet their burden of







                                                                   49
       1      proof and prevail on their complaint.

       2             But testing must also be used to conduct

       3      proactive investigations into patterns of illegal

       4      discrimination in the housing market.

       5             Finally, let me briefly highlight some of the

       6      recommendations contained in the document that

       7      Erase Racism and FHJC have provided to you today.

       8             Number one:  New York State should fully

       9      utilize its licensing power to better regulate the

      10      real estate industry.

      11             Two of our recommendations include:

      12             Reviewing the results of the "Newsday"

      13      investigation, to determine if any licensees engaged

      14      in illegal conduct that merits disciplinary action

      15      by the department of state's division of licensing

      16      services;

      17             And better screening of the qualifications of

      18      trainers and the quality of curriculum developed to

      19      provide instruction to licensees on fair housing.

      20             Second:  We need a well-resourced, proactive,

      21      and better coordinated fair-housing enforcement

      22      strategy.

      23             Some of our recommendations include, more

      24      public funding for systemic testing, better

      25      coordination of fair-housing enforcement activities,







                                                                   50
       1      and a greater emphasis on conducting proactive

       2      investigations into systemic discrimination.

       3             The real estate industry should take

       4      affirmative steps to ensure compliance with

       5      fair-housing laws, this is number three.

       6             Some of our recommendations include:

       7             Reviewing the "Newsday" test to determine if

       8      the conduct of any members violated the realtor code

       9      of ethics;

      10             Implementing affirmative hiring programs, to

      11      create a more diverse real estate sales force;

      12             Opening offices in communities of color to

      13      ensure that service is being provided to all

      14      neighborhoods;

      15             And disseminating a model fair-housing

      16      policy, detailing better and best practices for

      17      non-discriminatory real estate marketing and sales.

      18             Four:  Local, state, and federal governments

      19      need to affirmatively further fair housing in all

      20      housing and community-development activities.

      21             One of our central recommendations includes,

      22      asking the State of New York to adopt an

      23      affirmatively-furthering fair-housing law, to ensure

      24      local governments, housing authorities, and state

      25      agencies are taking meaningful steps to







                                                                   51
       1      affirmatively further fair housing in all housing

       2      and community-development activities.

       3             Fifth:  New York State should implement

       4      fair-housing legislative initiatives, policy

       5      changes, and support for programs that expand access

       6      to housing opportunities in all neighborhoods.

       7             Some of our recommendations include:

       8             Funding for regional mobility-assistance

       9      programs;

      10             Passing a strong co-opt disclosure law;

      11             Amending the human rights law to explicitly

      12      prohibit discriminatory land use and zoning

      13      practices by public agencies, enacting a statewide

      14      equitable-share housing program, and establishing a

      15      statewide zoning appeals board.

      16             As you consider legislative solutions, we

      17      urge you to remember that housing discrimination and

      18      segregation continue to inflict serious harm on

      19      entire populations and communities.

      20             Albert Einstein once said, quote:  The world

      21      is a dangerous place, not because of those who do

      22      evil, but because of those who look on and do

      23      nothing.

      24             We can ill afford to look on and do nothing,

      25      or pretend we are going to wait for hearts and minds







                                                                   52
       1      to change.

       2             We need to muster the courage to act now.

       3             We implore you, as policymakers, to

       4      demonstrate real leadership on this issue.

       5             The late-Martin Luther King, Jr., when

       6      speaking about the need for civil rights laws and

       7      their enforcement, would often say, quote:  It may

       8      be true that the law cannot change the heart, but it

       9      can restrain the heartless.

      10             "Newsday" made a major contribution by

      11      shining a spotlight on one of the most hidden,

      12      enduring, and virulent forms of bias: housing

      13      discrimination.

      14             Now it's up to all of us to do what we can to

      15      restrain the heartless, and create more open,

      16      equitable, and inclusive communities on Long Island

      17      and throughout the state of New York.

      18             I'm happy to answer any questions from the

      19      committee members.

      20             Thank you very much.

      21             SENATOR SKOUFIS:  Thank you.

      22             ELAINE GROSS:  Good morning, Committee

      23      Chairs, members of the committees.

      24             I'm Elaine Gross, and I'm the president and

      25      CEO of Erase Racism.







                                                                   53
       1             It is an important -- it is important to

       2      note, that renters on Long Island often have far

       3      fewer housing choices because of the extreme

       4      limitations on building multifamily housing on

       5      Long Island, creating high competition for limited

       6      number of rental units.

       7             Whether for sale or for rent, there should be

       8      no housing discrimination.

       9             I speak from the perspective of an

      10      African-American woman who was born and raised on

      11      Long Island, and who currently owns a home on

      12      Long Island.

      13             In another state, I was a victim of housing

      14      discrimination, so I also know, firsthand, the

      15      emotional and economic toll of housing

      16      discrimination.

      17             Today I speak on behalf of Erase Racism, the

      18      Long Island-based civil rights organization that

      19      exposes and addresses the devastating impact of

      20      historical and ongoing structural racism in our

      21      region and in the nation, particularly in housing

      22      and public school education.

      23             In this role, my expertise derives from

      24      Erase Racism's direct experience, successfully

      25      advocating for changes in the fair-housing statutes







                                                                   54
       1      of both Nassau and Suffolk counties.

       2             I also organized, in 2016, a statewide

       3      coalition to amend the New York State Human Rights

       4      Law to include lawful source of income as a

       5      protected class.

       6             That amendment became law in April 2019,

       7      thanks, in part, to the work of an expanded

       8      coalition which I co-led.

       9             Since 2001, my experience also derives from

      10      our research on Long Island in such areas as

      11      residential segregation; segregation in public

      12      school education; fair-housing enforcement policies

      13      and practices, that's local, state, and federal; and

      14      the investigation of housing discrimination,

      15      including utilizing pair testing as a tool to revere

      16      disparate treatment, racial steering, and other

      17      violations of fair-housing statutes.

      18             The pair testing that we used was similar to

      19      that conducted by "Newsday" for its landmark

      20      investigative report, "Long Island Divided."

      21             We did our fair-housing investigation prior

      22      to "Newsday's," and on much smaller scale, but with

      23      similar results; and in partnership with the

      24      Fair Housing Justice Center.

      25             Our goal was to determine whether Black







                                                                   55
       1      renters on Long Island were being discriminated

       2      against in the housing options that they were

       3      offered, or were, in other ways, the victims of

       4      housing discrimination.

       5             The pair testing revealed that, in both

       6      Nassau and Suffolk counties, property owners and

       7      management companies were showing rental apartments

       8      to White applicants and not to Black applicants.

       9             When Black individuals and couples inquired

      10      about apartments, they were told, among other

      11      things, that nothing was available, that there was a

      12      long waiting list, that they should check back in

      13      the future, and they were sometimes quoted higher

      14      rent amounts.

      15             Whites were shown available apartments and

      16      encouraged to apply.

      17             Erase Racism's investigation led to

      18      successful litigation; resulted in court-mandated

      19      settlements with the offending real estate

      20      companies.

      21             Our case in Minneola settled in 2014, and in

      22      Commack in 2016.

      23             I mention that because, even though we are

      24      talking about home ownership today, I want you to

      25      understand the full breadth of the housing







                                                                   56
       1      discrimination that is going on here on Long Island.

       2             And as had been mentioned, it is not the

       3      responsibility of those of us who are non-profits on

       4      Long Island, nor a media organization, to be

       5      responsible for shedding light on, and responsible

       6      for the enforcement of, both the fair-housing laws

       7      and the actions of real estate agents, nor the

       8      actions of municipalities.

       9             So I will not talk about "Newsday's"

      10      investigation.  You heard from them directly.

      11             I, like everyone else, was not surprised, but

      12      I cannot say enough in praise of what they did.

      13             And the work that they did has created a sea

      14      change in terms of the number and the breadth and

      15      the depth of individuals and organizations on

      16      Long Island that are now talking about and concerned

      17      about and trying to make changes related to this

      18      issue.

      19             I would add that, you, the members of these

      20      committees and the state Legislature, have an

      21      essential role.

      22             Real estate brokers need a license in

      23      New York.  That license comes from the

      24      New York State Department of State.

      25             And that department has not protected nearly







                                                                   57
       1      half of Black homeseekers on Long Island from

       2      discrimination in the twenty-first century, if

       3      looking at the "Newsday" investigation.

       4             Not only does the state Legislature have an

       5      oversight role inherent in Article III of the state

       6      Constitution, the New York State Board of Real

       7      Estate, the department of state -- state's division

       8      licensing services, and the secretary of state, all

       9      have some responsibility for the integrity of

      10      systems that would ensure that real estate brokers

      11      are acting within the law.

      12             Put quite simply, when it comes to overseeing

      13      fair-housing practices by real estate brokers and

      14      companies, at least as they occur on Long Island,

      15      the State is failing to do its job with rigor and

      16      urgency.

      17             Every aspect of this structure, and the

      18      system inherent therein, need to be thoroughly

      19      investigated to determine what is broken and, thus,

      20      how to fix it.

      21             This is the case for both the licensing of

      22      real estate brokers, and punishment for

      23      discriminatory actions, and the New York State

      24      Division of Human Rights which is charged with

      25      enforcing the fair-housing law.







                                                                   58
       1             I have a few recommendations that I'd like to

       2      speak to.  I will not repeat the recommendations

       3      that Fred has summarized from our joint statement to

       4      you.

       5             First of all, fair-housing enforcement,

       6      including the pair testing that Erase Racism and

       7      other non-profits do, needs to be further

       8      strengthened and supported by New York State.  The

       9      resources need to be put forward in an aggressive

      10      manner.

      11             Second:  This form of housing discrimination

      12      exists in other areas of New York State.  Both

      13      lawsuits and investigations by other non-profits

      14      document housing discrimination.

      15             The investigations on Long Island should lead

      16      to statewide scrutiny, and result in rigorous

      17      enforcement and uniform protections for all

      18      New Yorkers.

      19             Third:  The practices of real estate agents

      20      explored in these investigations are just one

      21      component of the structural racism that drives

      22      racial discrimination and segregation in housing,

      23      and, therefore, in public schools and other

      24      government services.

      25             The practices of the real estate industry are







                                                                   59
       1      intertwined with myriad policies and practices that

       2      produce and maintain residential segregation, long

       3      established and perpetuated on Long Island and

       4      elsewhere in New York.

       5             The obligation to ensure fair housing exists

       6      at all levels of government, and throughout the real

       7      estate and banking industry, as does the obligation

       8      to remedy violations of fair housing.

       9             Fourth:  A culprit in perpetuating that --

      10      these myriad policies and practices is the State's

      11      adoption of home rule, delegating specific powers to

      12      local municipalities, including control of land use,

      13      which enables exclusionary zoning.

      14             Long Island's two counties include 13 towns

      15      and 97 incorporated villages, creating a municipal

      16      fragmentation that divides rather than unites.

      17             In addition, with local control, local

      18      municipalities use their power to maintain the

      19      status quo: severe racial segregation.

      20             Municipalities have engaged in such

      21      discriminatory housing practices, as using

      22      geographic preferences, exclusionary zoning,

      23      know-as-of-right multifamily housing, and, finally,

      24      concentrating affordable housing intended for Blacks

      25      in communities that are already a majority minority,







                                                                   60
       1      and affordable housing for seniors intended for

       2      Whites in communities that are majority White.

       3             I recently wrote a paper that was

       4      commissioned by the NYU Furman Center on this

       5      particular topic.

       6             And, finally, the State should amend the

       7      Human Rights Law in two significant ways.

       8             First:  The human rights law should

       9      explicitly prohibit discriminatory action by local

      10      governments and public agencies that operate housing

      11      programs, control land use and zoning decisions, or

      12      engage in other housing and community-development

      13      activities, to ensure that these programs and

      14      activities are not perpetuating segregation by

      15      making housing unavailable, or limiting access to

      16      housing, based on race, national origin, et cetera,

      17      which is discrimination.

      18             Second:  Similar to what the State of

      19      California did in 2018, the Human Rights Law should

      20      require state agencies and departments and local

      21      jurisdictions, public housing authorities, and other

      22      public entities, receiving state or federal funds

      23      for housing and community development, to

      24      affirmatively further fair housing, and take no

      25      action that is materially inconsistent.







                                                                   61
       1             Thank you for these hearings, and I am happy

       2      to answer any questions.

       3             SENATOR SKOUFIS:  Thank you both very much

       4      for your contributions today, and, quite frankly,

       5      more importantly, your work filling a vacuum that

       6      ought to have been filled over the past many, many

       7      years by different agencies.

       8             I have a number of questions I'd like to

       9      start with.

      10             First, as a question on the onset here:

      11             You're both experts, your organizations are

      12      experts, in pair testing.

      13             Can you speak to "Newsday's" testing, and

      14      confirm or, I guess, deny, whether "Newsday's"

      15      testing is similar or identical to testing that

      16      enforcement organizations employ and academic

      17      researchers employ?

      18             FRED FREIBERG:  Yes, the pair-testing

      19      methodology employed by "Newsday," and I helped them

      20      develop it, is very similar, if not identical, to

      21      paired testing that we do in the enforcement realm.

      22      And it's also similar to testing that's done by

      23      national research organizations, like the

      24      Urban Institute in the periodic HUD studies that

      25      are conducted nationally every 10 or 12 years.







                                                                   62
       1             So it's very similar.

       2             SENATOR SKOUFIS:  Okay.  Thank you.

       3             You noted, Mr. Freiberg, and I agree, that

       4      one of the lessons learned from this expos� is that,

       5      enforcement agencies need to be more proactive, and

       6      cannot rely on complaints before taking action.

       7             That said, how do we better encourage

       8      complaints?

       9             Clearly, if -- you know, if we have to wait

      10      for news organizations, or organizations like yours,

      11      to expose discrimination, we're not going to be able

      12      to expose all of it via complaints.

      13             How -- how do we get on the ground, people

      14      who are not involved in testing, average people who

      15      are being discriminated against, to know that they

      16      should complain, know how to complain; how do we

      17      better encourage it?

      18             FRED FREIBERG:  Well, there are obviously

      19      things that can be done.  Campaigns -- advertising

      20      campaigns, social media, and so forth, where you can

      21      elicit people to file complaints.

      22             But, again, I harken back to my testimony,

      23      which was, that the real lesson, the underlying

      24      lesson, of the "Newsday" investigation, was that,

      25      most of the time, and it would be true of most of







                                                                   63
       1      the testers who were involved in the "Newsday"

       2      investigation, they did not know they were being

       3      treated differently than other people.

       4             If you don't know you're being treated

       5      differently, all the advertising in the world isn't

       6      going to compel you to file a complaint.

       7             So we have a problem that's more hidden.

       8             We have a problem: violators have gotten more

       9      sophisticated.

      10             I talk to groups all the time about this.

      11             You know, it shouldn't come as a great

      12      surprise to us that some violators are clever enough

      13      to disguise their practices now.

      14             I mean, it's true of all -- all law

      15      enforcement.

      16             There's a reason why bank robbers wear masks.

      17             There's a reason why burglars wear gloves, so

      18      their fingerprints aren't found.

      19             And there's a reason we all slow down on the

      20      expressway when we see a squad car on the side of

      21      the road, because we don't want to get caught

      22      speeding.

      23             Well, why do we think people who are involved

      24      in the housing industry are any different.

      25             They don't want to get caught, so they found







                                                                   64
       1      ways to elude detection.

       2             So, therefore, my suggestion to you, is that,

       3      what has to be done, is there has to be more

       4      proactive testing done, people who pose,

       5      essentially, as surrogates of real homeseekers to

       6      ferret out this kind of illegal conduct.

       7             It's what we do all the time, but it needs to

       8      be done on a much larger scale.

       9             And if I can take just one more minute,

      10      I would say, if you look at examples, I mean, one

      11      person once said to me, who was an aide for a

      12      federal legislator:  Well, government is mostly

      13      reactive.  We're not -- we're not inherently

      14      proactive as a body.  We tend to just react to

      15      complaints.

      16             Well, my response to that is, that isn't

      17      always true.

      18             I've lived in multiple cities around the

      19      country, and I've gotten food poisoning four times,

      20      only in New York City.

      21             I've never had food poisoning before in any

      22      other place.

      23             Now, if -- it's interesting to note, there

      24      are 27,000 real estate agents on Long Island.

      25             There are 26,000 restaurants in







                                                                   65
       1      New York City.

       2             The City pays the department of health enough

       3      money to hire 100 investigators who are required to

       4      make one unannounced visit every year to every

       5      restaurant.

       6             I dare say, if they did not do that, we would

       7      not be here today, because --

       8                [Laughter.]

       9             FRED FREIBERG:  -- because the abuses are so

      10      great and there's a serious health hazard involved.

      11             Well, we have to see this the same way.

      12             There's a serious hazard out there that's

      13      preventing people, based upon their race, their

      14      national origin, their disability, their source of

      15      income, from gaining access to a fundamental

      16      necessary part of our lives: shelter.

      17             So we've got to see it in the same

      18      life-or-death kind of situation.

      19             This is -- this is not something to be taken

      20      lightly.

      21             And so my big answer to your question is:

      22             It's fine to do what we can to elicit more

      23      complaints.

      24             But we actually will not eliminate

      25      discrimination unless we take a more proactive







                                                                   66
       1      stance, and go out and affirmatively identify

       2      violators.

       3             ELAINE GROSS:  And I would also add that,

       4      because people know that nothing is being done,

       5      because there are so many -- I hear, personally, so

       6      many stories about how a person of color, for

       7      example, has been discriminated against.  They might

       8      have filed a complaint, they might have tried to get

       9      something done about it.

      10             And the story is:  Nothing happened.  Why did

      11      I bother?

      12             And so it almost makes it worse, pretending

      13      that there is a system in place to deal with this

      14      issue, and then have that system be so broken, that

      15      both the perpetrators know that nothing will happen

      16      to them, and the victims know, don't bother, because

      17      nothing is going to be done, after they are

      18      discriminated against, even if they try to file a

      19      complaint or try to do something about that.

      20             SENATOR SKOUFIS:  And to that point, surely,

      21      the department of state; surely, law enforcement

      22      agencies, know that testing works, just like you

      23      know that testing works.

      24             FRED FREIBERG:  Yes.

      25             SENATOR SKOUFIS:  Why do you think that these







                                                                   67
       1      enforcement organizations do not employ more

       2      testing?

       3             FRED FREIBERG:  Well, that -- that is the

       4      94,000-dollar question, but here -- there are

       5      reasons.

       6             One is, that government agencies,

       7      particularly at the local and state level, are often

       8      subject to the political winds, and, as leadership

       9      changes, and so forth.

      10             We know the department of state at one time

      11      had a testing program, and they proactively had

      12      people calling and investigating real estate agents,

      13      and they were sanctioning real estate agents.

      14             Why is that gone today?

      15             I mean, it will be interesting to hear from

      16      them today.

      17             I think, you know, the problem with a lot of

      18      local government agencies, and state agencies too,

      19      is there's not the political will to actually

      20      sustain it.  The resources are not devoted.

      21             I helped the New York Attorney General's

      22      Office start its own testing program in 2008.

      23             How many cases have you read about recently

      24      based on testing done by the New York Attorney

      25      General's Office?







                                                                   68
       1             I dare say, none.

       2             You know, the government procurement

       3      processes, hiring policies, and so forth, make it

       4      very difficult for them to hire 165 professional

       5      actors like I have, to operate on a part-time basis.

       6             And you need a very large diverse pool of

       7      people to do be able to do this -- do this kind of

       8      testing.

       9             So, I think there are a lot of practical

      10      obstacles.  Sometimes there are political obstacles.

      11             But it is shameful that we know what works to

      12      ferret out discrimination.

      13             Government knows what works, and yet it

      14      doesn't support it.

      15             I mean, no fair housing -- there are six

      16      fair-housing groups in the city of -- or, in the

      17      state of New York, and not a single one gets a dime

      18      from the State of New York to support its

      19      activities.

      20             We're in the city of New York, and we -- we

      21      get a small contract to do some source-of-income

      22      testing for $20,000.

      23             The Los Angeles fair-housing group gets

      24      almost $900,000 from the City and County of

      25      Los Angeles.







                                                                   69
       1             So we're in a fair-housing desert here when

       2      it comes to resources and funding for testing.

       3             ELAINE GROSS:  And I would add that, in all

       4      of these agencies, we have people, and people have

       5      their own conscious and unconscious biases.

       6             I can't tell you the number of times I've

       7      been told:  Elaine, there really is no more housing

       8      discrimination.  It's only based on income.

       9             And, also, the sort of combination is:  You

      10      know that you know Black people only want to live

      11      with other Black people.

      12             So we contracted with the survey research

      13      firm to do telephone survey research in communities

      14      on Long Island that were 60 percent or more

      15      African-Americans.

      16             And the findings of that survey indicated,

      17      number one, that it's not true that Blacks only want

      18      to live with other Blacks.  Only 1 percent responded

      19      in that way.

      20             Blacks prefer to live in communities that

      21      were multiracial.

      22             The other thing that we found when we did

      23      some research, looking at census data, and the

      24      American Community Survey, is that it is true that

      25      some populations, Whites, Asians, have higher







                                                                   70
       1      incomes, in general, than Blacks and Hispanics.

       2             However, it's not true, when you look at the

       3      residential patterns, that all of the high-income

       4      Blacks and all of the high-income Whites and all of

       5      the high-income Asians and Hispanics, they live in

       6      certain census tracts.  And then all of the middle

       7      income, et cetera, et cetera.

       8             What you see is that, in fact, it is about

       9      race; that the Whites, whether they are sort of

      10      wealthy, or less wealthy, are grouped in certain

      11      tracts.  And the Blacks, whether it's kind of

      12      wealthy, or less wealthy, are grouped in certain

      13      tracts.

      14             Et cetera.

      15             So, the myths are there, and sometimes people

      16      don't even realize it, they're not thinking of it

      17      consciously, but I think it influences how seriously

      18      they take this issue.

      19             If you have another narrative going on in

      20      your head, that tells you this isn't really a big

      21      deal, that it doesn't really happen, et cetera, you

      22      will not be aggressive in your work.  You will not

      23      choose to put the resources that are required to do

      24      the [indiscernible] -- to take care of the task.

      25             SENATOR SKOUFIS:  I have one final question,







                                                                   71
       1      briefly.

       2             You made it clear that you don't believe the

       3      department of state, the division of licensing

       4      services, is taking this seriously enough.

       5             For the record, on a scale of 1 to 10,

       6      "1" being the, basically, not serious at all, and

       7      "10" being serious -- the most serious, how would

       8      you rate the department of state in their taking

       9      discrimination -- housing discrimination in

      10      New York State seriously?

      11             ELAINE GROSS:  I would put it at a minus 1.

      12             FRED FREIBERG:  I would agree.

      13             I -- I think it depends on when you're

      14      talking.  But, right now, as of this moment, I'd say

      15      it's a zero.

      16             I don't think it's -- their efforts have

      17      really demonstrated any success in this area.

      18             Thank you very much.

      19             Senator Thomas.

      20             SENATOR THOMAS:  Thank you both for your

      21      testimony.

      22             I have a question for Fred, and for Elaine.

      23             I'll start with Fred, first.

      24             Compared to the other tests that you have

      25      conducted, is there anything about the results from







                                                                   72
       1      Long Island testing that stand out?

       2             FRED FREIBERG:  No, I don't think so.

       3             I mean, I -- I sort of cut my teeth in this

       4      field on doing sales testing back in 1976 in

       5      Milwaukee, Wisconsin.

       6             We did a large sales investigation, very much

       7      like this, as part of a national HUD study.  And we

       8      found a 63 percent level of race discrimination in

       9      that study.

      10             Compare -- not that these studies can be --

      11      you know, they're not apples and apples in terms of

      12      comparison.  But it certainly is shameful, if all

      13      the progress we've made is, from 63 percent, to

      14      49 percent, in 40-some years.

      15             I don't think there's anything remarkable

      16      about them.

      17             Some of the tests were very similar to tests

      18      I saw back in 1970.

      19             Some of them are more subtle, but yet still

      20      show the disparate treatment in some ways.

      21             I mean, fortunately, testing can ferret that

      22      out even when there aren't remarks made, or, you

      23      know, direct evidence of discrimination.

      24             SENATOR THOMAS:  I heard from both of you, in

      25      terms of the lack of action by state agencies and







                                                                   73
       1      municipalities.

       2             You were here when both County Executive

       3      Steve Malone and Laura Curran were testifying to

       4      what they are now doing to mitigate all of this.

       5             What are your thoughts on their testimony?

       6             ELAINE GROSS:  Well, certainly, their

       7      testimony suggests that they are at the very

       8      beginning of a process.  And so there are, you know,

       9      we would like to plan to do this.  We are intending

      10      to hire more investigators.  We are intending to,

      11      et cetera, et cetera.

      12             So I think that these are definitely good

      13      steps to take.

      14             And I do believe, and maybe this is, you

      15      know, the conservative aspect of my personality,

      16      but, I do think the -- you have to see the -- you

      17      know, the proof in the pudding.

      18             So, I'm very pleased to have the county

      19      executive step forward at this time, in a relatively

      20      short period of time, and to say that they wish to

      21      take action.

      22             But I just caution everyone:  This is not --

      23      this is not a sprint.

      24             This is more like a marathon, hopefully, a

      25      fast marathon, a very fast marathon.







                                                                   74
       1             But I do believe that we have some -- we have

       2      some evidence that we can begin to make -- make

       3      change.

       4             But it does -- sometimes it sounds a little

       5      bit too much, like, let's see what we can do around

       6      education.  Let's see what we can do to -- you know,

       7      to get people together.  And -- and that kind of a

       8      thing.

       9             And we need legal action.  People who are the

      10      bad actors need to be held accountable, and that

      11      include local governments.

      12             So, I don't want us to forget that aspect of

      13      it.

      14             SENATOR THOMAS:  Both of you testified about

      15      the importance of testing.

      16             Now, would you recommend that there be that

      17      kind of testing in the plan of both the county

      18      executives that testified today on what they would

      19      be doing, going forward?

      20             ELAINE GROSS:  Absolutely.

      21             There should be more systematic testing, not

      22      necessarily saying that the counties should do that.

      23             It would be good, perhaps, for them to

      24      commission those that have done work like this in

      25      the past, to do it, to continue to do it, and to do







                                                                   75
       1      it more robustly.

       2             But there should be funds made available for

       3      this work.

       4             FRED FREIBERG:  I would agree.

       5             SENATOR SKOUFIS:  Senator Kavanagh.

       6             SENATOR KAVANAGH:  Thank you both for your

       7      testimony today, and for your -- your tremendous

       8      work in many aspects of our housing markets, and our

       9      continued effort to ensure fairness.

      10             And I particularly commend you for -- as

      11      someone who's worked on the non-discrimination

      12      [indiscernible] source-of-income campaign.

      13             Congratulations on that.  A great achievement

      14      earlier this year.

      15             ELAINE GROSS:  Thank you.

      16             SENATOR KAVANAGH:  Just, you --

      17      Mr. Freiberg, you mentioned, you called it the

      18      "94,000-dollar question," which I think is inflation

      19      from the old show.

      20                [Laughter.]

      21             SENATOR KAVANAGH:  But I actually would like

      22      to get a sense, just -- let me start:

      23             Is there -- is there a jurisdiction -- you

      24      mentioned Los Angeles has a substantially larger

      25      financial [indiscernible].







                                                                   76
       1             Are there jurisdictions beyond Los Angeles,

       2      that you're aware of from your many years in this

       3      field, that do this well?

       4             FRED FREIBERG:  Well, there are jurisdictions

       5      that support local fair-housing groups to do

       6      testing, and partner with organizations to do

       7      testing, yes, there are a number of them.

       8             But there is a general, and I've seen it come

       9      and go over the years.

      10             I mean, there was a time when the

      11      Massachusetts Commission Against Discrimination had

      12      a very aggressive program.  But then when leadership

      13      changed, it stopped being so aggressive.

      14             So, again, the political winds, again,

      15      dictate whether -- you know, the posture of the

      16      local enforcement agencies.

      17             I -- so I -- I -- I see good examples, but

      18      how long are they going to be there?

      19             And -- and that's always a fundamental

      20      concern of mine.

      21             There has to be an ongoing commitment to

      22      carry on this work, and not just an occasional

      23      dabbling in -- in fighting housing discrimination.

      24      It should be sustained.

      25             So I -- I think that's -- that's my real







                                                                   77
       1      concern.

       2             The only people that have been able to

       3      sustain this kind of activity have, generally, been

       4      those involved in private civil rights

       5      organizations, because we know it works.

       6             Government knows it works too.

       7             I mean, HUD, for all the resources they've

       8      spent on testing nationally, they know that it's

       9      more likely a complaint filed with them will end up

      10      with a probable cause if there's a test done on the

      11      complaint, yet they do not have a testing program.

      12      They don't have one internally with their

      13      enforcement program.

      14             So there is this disconnect between what we

      15      know works and what we actually commit resources to,

      16      to do.

      17             SENATOR KAVANAGH:  And just to be clear:

      18      You -- my understanding from your testimony is that,

      19      testing is an important component of two different

      20      aspects of this.

      21             First of all, when there is a complaint, as

      22      an appropriate means of investigating and

      23      corroborating and validating that complaint.

      24             But, also, given the nature of this field,

      25      where, as was testified earlier, people often can't







                                                                   78
       1      be aware -- you testified to this, and Mr. Brown as

       2      well, it's difficult for people to be aware that

       3      they are experiencing discrimination, until -- and

       4      because they're not present to see how other clients

       5      might be treated.

       6             FRED FREIBERG:  That's correct.

       7             And it should be used in both contexts.

       8             SENATOR KAVANAGH:  And do either of you have

       9      a -- an opinion on, sort of, an appropriate scale of

      10      funding?

      11             If we wanted this kind of work to be done,

      12      noting -- you note that it takes lots of resources,

      13      it takes lots of people.

      14             What would be the scale of a statewide

      15      program that does adequate testing to identify these

      16      issues as they arise?

      17             FRED FREIBERG:  Well, the curious thing is,

      18      I mentioned HUD has funded testing for a number of

      19      years.  They have a fair-housing initiatives

      20      program.  And they give a one-size-fits-all grant to

      21      every fair-housing group in the country, $300,000.

      22             So if you're in expensive New York City, or

      23      you're in Grand Rapids, Michigan, or Bend Harbor,

      24      you get $300,000.

      25             So, our dollars don't go very far in







                                                                   79
       1      New York.

       2             And that number's actually gone down.  It

       3      used to be closer to $350,000 HUD was giving.  So

       4      it's actually decreased over the years.

       5             That barely sustains fair-housing groups

       6      around the country.

       7             It's a small part of our budget, but it's

       8      90 to 95 percent of many fair-housing groups in the

       9      country.

      10             So, it has to be something above that amount

      11      if we really want to get serious about this problem.

      12             I think it -- it really has to be gauged,

      13      based on how serious and aggressive you want to be

      14      in fighting housing discrimination.

      15             The City has determined it takes

      16      100 investigators to visit all 26,000 restaurants.

      17             When you consider lenders and real estate

      18      companies and management companies and -- and

      19      rental-housing providers, and so forth, all involved

      20      in these activities, we have to talk about a

      21      significant amount of money to sustain testing.

      22             So, I would -- I'm hesitant to say this, but

      23      if was a million dollars a year, it would only make

      24      a dent in the problem right now.

      25             So, I mean, I think we have to think big







                                                                   80
       1      about this issue, and what kinds of resources would

       2      really make a difference in getting compliance.

       3             We've had relatively modest resources and

       4      we've gotten significant results with individual

       5      housing providers, sometimes large providers.

       6             But it's still a very fraction of the market

       7      that we've been able to impact.

       8             SENATOR KAVANAGH:  Ms. Gross, do you have

       9      anything to add to that?

      10             ELAINE GROSS:  I don't.  Not -- not -- but

      11      I'm sure that, Fred, if he were given an opportunity

      12      to, and you said, Well, "give me a number, how much

      13      would you like?" he'll come up with something.

      14                [Laughter.]

      15             SENATOR KAVANAGH:  Okay, well, kidding aside,

      16      you know, a hundred -- about 108 days or so the

      17      state budget is due.  And so we are beginning that

      18      the process very soon.

      19             So we look forward to having further

      20      conversations with you and your organization and

      21      your coalition about this topic.

      22             FRED FREIBERG:  Great.

      23             SENATOR KAVANAGH:  Thank you.

      24             SENATOR SKOUFIS:  Senator Kaminsky.

      25             SENATOR KAMINSKY:  Thank you, both.







                                                                   81
       1             Just want to dig into some of the questions

       2      about what is, and then see how we can move forward.

       3             So, in New York, let's take, in the last five

       4      years, aside from "Newsday", how much undercover

       5      testing was done at all?

       6             FRED FREIBERG:  In the New York City region?

       7             SENATOR KAMINSKY:  Yeah.

       8             FRED FREIBERG:  I can only speak to my

       9      organization, but we usually are able -- we've got

      10      three investigative coordinators who coordinate the

      11      testers; they go out.

      12             So it's largely dependent on how much of a

      13      load those three people can take.

      14             So it's about 200 -- 200 or so tests a year

      15      that go out.

      16             Some of those are in response to complaints,

      17      but the vast majority are part of planned systemic

      18      investigations.

      19             SENATOR KAMINSKY:  Okay, so the -- the State

      20      does not do this themselves?

      21             In other words, they don't have --

      22             FRED FREIBERG:  No.

      23             SENATOR KAMINSKY:  -- okay.

      24             Are there other states that actually do it,

      25      undertake it themselves?







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       1             FRED FREIBERG:  There have been, over time,

       2      there was a time when the State of Kentucky did.

       3      There was a time when the State of Massachusetts had

       4      a very aggressive program.

       5             It is very -- they've come and gone --

       6             SENATOR KAMINSKY:  Okay.

       7             FRED FREIBERG:  -- through different

       8      administrations.

       9             SENATOR KAMINSKY:  And out of these 200 or so

      10      tests, the State does not -- State, nor county,

      11      funds any of these?

      12             FRED FREIBERG:  No, no.

      13             SENATOR KAMINSKY:  Okay.  And that test

      14      represents what type of impact on the whole market?

      15             Is that, this "200," a robust number, or is

      16      it a pittance?

      17             What does it mean?

      18             FRED FREIBERG:  Well, for us, it's --

      19      we're -- we probably file more lawsuits based on

      20      testing than any fair-housing group in the country.

      21             So we've had some impact, we've opened up a

      22      lot of doors, and so forth.

      23             But as -- and when you're talking about the

      24      New York City region, and the number of housing

      25      providers, I mean, there's 300,000 co-ops in







                                                                   83
       1      New York City alone -- or, 300,000 co-op units in

       2      New York City alone.  There's tens of thousands of

       3      property management companies.

       4             It's very hard to tell you that we've had a

       5      massive impact, but we've impacted, where we have

       6      found discrimination, we have changed the practices

       7      of those housing providers.

       8             SENATOR KAMINSKY:  And what's happening

       9      across the state?

      10             Are people doing this in Syracuse, in

      11      Buffalo, and Albany, and to what extent?

      12             FRED FREIBERG:  There are testing programs in

      13      Syracuse, Buffalo, and Rochester.

      14             SENATOR KAMINSKY:  Okay.

      15             So I think you've kind of -- without actually

      16      saying this, but you've kind of equated this to,

      17      like, an undercover officer.  Like, someone going to

      18      sell drugs, perhaps, would be on the lookout for

      19      that.  And it's obviously a deterrent that they

      20      might be selling to an undercover officer, or,

      21      someone in organized crime may have their phone

      22      wiretapped, et cetera.

      23             You -- you're saying that, on the whole, that

      24      disincentive to do wrong is not very prevalent in

      25      the real estate industry because the chance of being







                                                                   84
       1      detected in one of these tests is very low?

       2             FRED FREIBERG:  You're absolutely correct.

       3             SENATOR KAMINSKY:  Okay.

       4             And if -- is there an example throughout the

       5      country of a real estate company itself testing

       6      itself?

       7             FRED FREIBERG:  There are lenders and

       8      real estate companies that have their own

       9      self-testing programs.

      10             And that's our recommended best practice.

      11             If I owned a real estate company, or a bank

      12      or financial institution, I would do testing, to

      13      make sure that my employees were complying with the

      14      law.

      15             I think it just makes good sense.

      16             SENATOR KAMINSKY:  Okay.  And should one of

      17      the things we be looking at, possibly requiring them

      18      do that within their -- their own practices?

      19             FRED FREIBERG:  Yes.

      20             However, you know, it's a little -- I mean,

      21      I absolutely think it's a good practice.

      22             Whether it will deter all of the

      23      discrimination that's out there, though, that's --

      24      that's another issue.

      25             I think --







                                                                   85
       1             SENATOR KAMINSKY:  Yeah --

       2             FRED FREIBERG:  -- you still need enforcement

       3      action.

       4             SENATOR KAMINSKY:  -- right.

       5             I mean, I would like to think that, if one is

       6      going to commit a crime within the confines of a

       7      corporate structure or within a company, that you

       8      not only be worried about outside forces, but you'd

       9      like to think someone inside the company wouldn't

      10      want you doing it either.

      11             FRED FREIBERG:  Correct.

      12             SENATOR KAMINSKY:  Okay.

      13             And has there been a system, that you know

      14      of --

      15             Because I -- I like the idea of this in my

      16      own head, I'm about to say it out loud.

      17             -- but why don't we have some of the

      18      real estate companies that are contributing to the

      19      racist outcomes help pay for testing from

      20      organizations like yours?

      21             FRED FREIBERG:  Well, in our case, we do

      22      often file as a co-plaintiff in the case, and we are

      23      entitled to recover damages.

      24             So that is part of the revenue we take in a

      25      year from violators.  So that is how -- how we've







                                                                   86
       1      helped sustain ourselves.

       2             I've suggested, however, that the State might

       3      find one -- one way to raise money to pay for

       4      systemic testing across the state, is to raise the

       5      fees for licensees.

       6             And because it's a very modest rate right --

       7      right now, and I think a fairly modest raise could

       8      actually generate a great deal of revenue across the

       9      state, that could be used for testing.

      10             So I agree with your -- your concept.

      11             SENATOR KAMINSKY:  Okay.

      12             Now, this is for both Elaine and Fred, very

      13      difficult question.

      14             But when -- what is your sense of what is

      15      happening, when a minority couple walks into an

      16      office, a real estate agent, just in a -- in a

      17      disparate fashion, steers them to a community they

      18      think would be more -- you know, more along their

      19      lines of where they think they should go, not

      20      exactly where the buyers would go if they had full

      21      choices presented on them?

      22             What -- what -- what is -- what is happening

      23      in that room?

      24             What is the real estate agent trying to

      25      accomplish?







                                                                   87
       1             Where is this coming from?

       2             And why, in 2019, are we -- are we -- are we

       3      talking about this as if this is 50 years ago?

       4             What's happening in that room?

       5             What's happening in their mind?

       6             What's happening in this room?

       7             Where's this coming from?

       8             ELAINE GROSS:  So first of all, I would say

       9      it's not possible for me to be inside the mind to

      10      understand exactly what real agents are doing it,

      11      and why it's motivating them.

      12             But I can say that we do know that there are

      13      a lot of people who have not, for example, taken one

      14      of our two-day "Unravel the Racism" training

      15      programs, where you really begin to look at

      16      yourself, and understand, where have you gotten the

      17      ideas that you have about people who are different

      18      from you?

      19             When was the first time that you learned that

      20      people were treated differently based on race?

      21             And where did you get those messages?

      22             We get those messages not only from our

      23      families, but from the media, big time.

      24             And so it's all around us.

      25             And unless you've been trained to understand







                                                                   88
       1      that, you assume -- you know, we're well-meaning

       2      people, we assume that everything's just fine.

       3             But we don't know the narrative that's going

       4      on in the back of our head, that is telling us

       5      things that are going to have a disparate impact on

       6      people.

       7             And so that's part what's going on, I think,

       8      with the real estate agents.

       9             You know, they are -- some of them may be

      10      assuming that, as I said, in terms of our survey

      11      work:  This is where they want to go, this is where

      12      they want to live.  I'll take them over there.

      13             Some of them may be intentionally saying, we

      14      know that sometimes they have said, "I don't want

      15      them" -- you know, "I don't want them in my

      16      community, so I'll take them over there."

      17             So it's a lot of different things.

      18             SENATOR KAMINSKY:  And -- and is it your

      19      impression that one can become a real estate agent

      20      on Long Island and have never been having this

      21      discussion within their own company, within their

      22      training, within their manuals, at all?

      23             ELAINE GROSS:  Absolutely.

      24             SENATOR KAMINSKY:  So that seems, to me, a

      25      critical place where we want to focus; that one can







                                                                   89
       1      be in the position to have such an important, almost

       2      influence in what happens in our society, yet never

       3      have a conversation about diversity or race or

       4      ethics within their own company before they get to

       5      be in that position?

       6             ELAINE GROSS:  That's right, because, as a

       7      society, we don't want to talk about race anyway,

       8      you know.

       9             FRED FREIBERG:  And if [indiscernible

      10      cross-talking] --

      11             ELAINE GROSS:  It -- it's -- it is really

      12      considered -- I mean, some people even think, if you

      13      talk about race, you must be racist.

      14             I mean, it's crazy.

      15             So, we -- there is a lot that needs to

      16      happen, so that we are ready to have what is

      17      obviously an uncomfortable conversation for folks.

      18             But, they need to understand our history

      19      around race, and how race has been enshrined in

      20      government, in our policies, in our geography, and

      21      how it is a part of all of us, whether we are

      22      consciously aware of it at any given moment, or not.

      23             So that kind of understanding is very

      24      important for these gatekeepers.  I mean, they are

      25      the ones that are -- really take the -- the







                                                                   90
       1      opportunities that people would have, they have that

       2      in their hands.

       3             And what they do -- what happened to me

       4      personally, when I wasn't allowed to access housing

       5      that would have been cheaper for me, and nicer for

       6      me, and I was sent to a place that had vermin, had a

       7      big impact.

       8             So this is not something that is just on

       9      paper.  This is something that is real.

      10             SENATOR KAMINSKY:  And -- and I -- I know,

      11      Ms. Gross, I speak for all of us when we say that

      12      we're so grateful to have you at the helm,

      13      helping -- helping fight back.

      14             And your expertise is going to be very

      15      important to us, going forward, and your experience

      16      has helped guide us today.

      17             Lastly, Fred and Elaine, what -- what happens

      18      to the enforcement side?

      19             Let's say we're able to get money for

      20      testing, let's say we're able to get good training

      21      in place.

      22             What happens when we find out someone is

      23      operating improperly?

      24             Do we have enough?

      25             Is the system set up to do something, where







                                                                   91
       1      that, something will matter, something impactful

       2      will happen?

       3             Or, do we not have the penalties and/or

       4      enforcement in place to do something if we're -- if

       5      we're good enough to get to where you'd like us to

       6      be?

       7             FRED FREIBERG:  Well, I think there's a

       8      number of ways to answer that.

       9             There -- the laws that exist right now, state

      10      and federal laws, fortunately, have the private

      11      right of action.

      12             So when we have evidence of discrimination,

      13      we could go to one of the government agencies that

      14      enforce the laws and present our complaints there.

      15             But we've had a dismal experience, frankly,

      16      with that.  Every time we've gone to the state

      17      division of human rights, we practically had to go

      18      to an Article 78 in state court and have their

      19      decisions overturned.  And we succeed each time,

      20      too.

      21             SENATOR KAMINSKY:  Can you stop for a second?

      22             So you'll go to a state agency and say, "Look

      23      what our testers found," and they will say, what?

      24             FRED FREIBERG:  And -- and they will come out

      25      with a finding that completely obliterates any sense







                                                                   92
       1      that there was disparate treatment, even though it's

       2      obvious.

       3             So we have to take it to state court to

       4      overturn decisions.

       5             And this happens time and time again.

       6             The state agencies that are set up -- and

       7      yous got a glimpse of this a little bit.

       8             If you listened to the county executives, you

       9      heard them say:  We're going to get some staff now

      10      for our human rights commission.  We're going to get

      11      an advisory board.

      12             Well, is that to suggest that it was just

      13      cosmetics before that?

      14             And I think you'll find at the local level

      15      that's often the case.

      16             At the state level, however, you have real

      17      agencies that, potentially, could enforce the law.

      18             But, for instance, the state agency is very

      19      consumed with employment discrimination, with other

      20      kinds of discrimination.

      21             Housing has been a fairly low priority for

      22      them, and they haven't shown a real aptitude to

      23      investigate and -- and actually sanction housing

      24      providers.

      25             We generally get six figures, seven figures,







                                                                   93
       1      in our cases as part of damages and remedies.

       2             Show me the recovery from the state agency.

       3             I'll match our list to their list any day of

       4      the week.

       5             And if you want to deter discrimination in a

       6      capitalist society, you've got to have stiff

       7      financial penalties to really dissuade people from

       8      continuing to engage in this activity.

       9             SENATOR KAMINSKY:  I appreciate you assuming

      10      the capitalist society.

      11             FRED FREIBERG:  Well, I think that's fair to

      12      assume.

      13             SENATOR KAMINSKY:  Thank you.

      14             SENATOR SKOUFIS:  Thank you.

      15             I want to acknowledge that

      16      Senator Monica Martinez has joined us.

      17             One very brief follow-up on

      18      Senator Kaminsky's question -- or, request rather.

      19             Could you supply our committees with the data

      20      that you have about just how often your

      21      organizations have overturned state decisions in

      22      court on these matters?

      23             FRED FREIBERG:  Sure.

      24             SENATOR SKOUFIS:  Okay.  Thank you.

      25             Next up, Senator Gaughran.







                                                                   94
       1             SENATOR GAUGHRAN:  Thank you, Mr. Chairman.

       2             And thank you both, not just for being here,

       3      but for your advocacy and what I know is your life

       4      work.

       5             I recognize that there is a lot that we have

       6      to do in this area.

       7             First of all, it's not a problem that's going

       8      to be solved simply by the State of New York.

       9             This is an area where we have federal law, we

      10      have state law.  We have counties.  We have towns

      11      and villages that control the zoning.

      12             So it's got to be done at different levels.

      13             And I also recognize that, and that's why

      14      these hearings I think are good, because we're

      15      probably going to have to pass a variety of new laws

      16      to deal with this, as well as, perhaps, you know,

      17      and I would be supportive, of trying to get

      18      something in the budget, so that we can really help,

      19      particularly with the testing issue.

      20             But when I first read the "Newsday" articles,

      21      the first thing I did was look at the law.  And

      22      I saw that the section of the law that licenses the

      23      sales people, as well as the brokers, did not have

      24      any specific language in it that would allow the

      25      department of state to actually suspend or revoke a







                                                                   95
       1      license.

       2             I mean, there's some language there.  You

       3      know it speaks of fraud, misrepresentation, and

       4      trustworthiness, and competency.

       5             So perhaps there's -- there's sort of some

       6      threads that could be used, but it seemed to me that

       7      there was nothing explicit.

       8             So that's why I introduced legislation that

       9      would add to the law, that a real estate broker or

      10      sales person's license could be suspended or revoked

      11      by the department of state.

      12             I recognize it's not the whole solution to

      13      the problem, but I guess my question is, on your

      14      thoughts on that?

      15             And it would also seem to me that, in my

      16      mind, it would deal with the issue of, when you're

      17      talking about, Fred, when we slow down when we see

      18      the police officer, that, in the back of the minds

      19      of some somebody in the industry who, you know, may

      20      want to see what they can away with, at least they

      21      will always have in the back of their head, you

      22      know, I could lose my license, I could lose my

      23      livelihood.

      24             And -- but I think it also goes to the

      25      question that was raised before, in terms of, but







                                                                   96
       1      how would this work if we're not getting people

       2      filing complaints?

       3             So, you know, perhaps that's where, in

       4      conjunction with some funding, we would be able to

       5      do that.

       6             What -- what's your, both you, thoughts

       7      [indiscernible cross-talking] --

       8             FRED FREIBERG:  Absolutely.

       9             First of all, I commend you for the

      10      legislation that you proposed, because I think it

      11      makes it unambiguous then, that they have a duty and

      12      a responsibility to investigate claims of

      13      discrimination filed against licensees.

      14             And I think that's important.

      15             It was done, as you suggest, previously,

      16      based on trustworthiness, misrepresentations, and so

      17      forth, which is often part of the acts of

      18      discrimination that occur.  So they were on solid

      19      ground to make those assumptions.

      20             But I think your -- your law would make it

      21      unambiguous, and I think that's a good thing.

      22             I think where it could help, because,

      23      actually, when I came to New York in 2004, by 2006,

      24      we already had some recordings of agents, licensees,

      25      who were involved in discrimination.  And we went







                                                                   97
       1      and filed with the division of licensing services.

       2             And lo and behold, investigators came to our

       3      office.  They were professional, they were thorough.

       4      They listened to the recordings.  They actually

       5      wrote up findings.  And they took back -- they took

       6      it back to actually propose disciplinary action.

       7             And we thought, well, this is a -- this a new

       8      day.  This is -- this is great.

       9             And -- and then we proceeded to say, okay,

      10      we've got some more licensees we've caught engaged

      11      in illegal activities, so let's bring it to

      12      licensing.

      13             And then, by that time, we were told, Oh, no,

      14      no, no.  We can't do that anymore.  If you come to

      15      us with a judgment from a court, or a finding from

      16      the state division on human rights, then we'll look

      17      at it.  But we're not just going to take your

      18      recording and -- and investigate that.

      19             Well, that really shouldn't be the case.

      20             They should be able to look at any compelling

      21      evidence, such as the recordings in the "Newsday"

      22      investigation, and make some call as to whether that

      23      constitutes a violation of the licensee's

      24      responsibilities, or not.

      25             SENATOR GAUGHRAN:  So this is a follow-up.







                                                                   98
       1             So in that particular instance, do you think

       2      this change in law would have given them the tools

       3      to be able to act?

       4             FRED FREIBERG:  I would hope so.  I would

       5      hope that your law suggests that they don't have

       6      complete discretion and options as to whether to

       7      investigate acts of discrimination, but that there's

       8      a "shall" in there somewhere.

       9             And if there is, I think that's -- that would

      10      be a sea change.

      11             SENATOR GAUGHRAN:  Okay.

      12             Ms. Gross, did you have any thoughts?

      13             ELAINE GROSS:  Yeah, I don't have anything to

      14      add to that, other than to thank you for putting the

      15      law forward.

      16             Being more explicit is always better.

      17             I just don't want anyone to think that there

      18      wasn't plenty of opportunity and evidence, in terms

      19      of ethical, professional behavior, to bring forward

      20      charges against those agents that were being

      21      discriminatory.

      22             SENATOR GAUGHRAN:  Thank you, both.

      23             SENATOR SKOUFIS:  Senator Boyle.

      24             AUDIENCE MEMBER:  Excuse me.

      25                [Inaudible comments from audience member.]







                                                                   99
       1             SENATOR SKOUFIS:  Please we're not taking

       2      comments from audience members.  I'm sorry.

       3                [Inaudible comments from audience member

       4        continues.]

       5             SENATOR SKOUFIS:  We'll be happy to follow up

       6      with you after the hearing.

       7             AUDIENCE MEMBER:  Thank you.  But I need

       8      everyone to know [inaudible comments from audience

       9      member continues.]

      10             SENATOR SKOUFIS:  Please, we can't -- we

      11      can't have this interrupted.  I apologize.

      12                [Inaudible comments from audience member

      13        continues.]

      14             SENATOR SKOUFIS:  With all due respect,

      15      ma'am, please, we have -- we have witnesses who are

      16      waiting.  We have witnesses here who are testifying.

      17                [Inaudible comments from audience member

      18        continues.]

      19             SENATOR THOMAS:  Let --

      20                [Inaudible comments from audience member

      21        continues.]

      22             SENATOR THOMAS:  -- ma'am --

      23                [Inaudible comments from audience member

      24        continues.]

      25             SENATOR THOMAS:  -- ma'am, let us -- let us







                                                                   100
       1      continue with --

       2             SENATOR SKOUFIS:  We are -- we are trying to

       3      do the work that you're advocating for.

       4             You're disrespecting the witnesses who are

       5      here.

       6             Please.

       7                [Inaudible comments from audience member

       8        continues.]

       9             SENATOR SKOUFIS:  Senator Boyle --

      10             SENATOR BOYLE:  Thank you.

      11             SENATOR SKOUFIS:  -- apologize for that

      12      delay.

      13             AUDIENCE MEMBER:  I don't apologize.

      14             SENATOR KAVANAGH:  Let me just say, that's --

      15      that's what we're here for.

      16             SENATOR BOYLE:  First, I'd like to thank

      17      "Newsday" for their landmark series, and the Chairs

      18      for holding this hearing.

      19             And thanks, obviously, to the panelists

      20      today.

      21             My question is very specific, actually.

      22             One of the things I noticed, that -- since

      23      the series came out, I've talked to a number of

      24      advocates and real estate groups.  Long Island Board

      25      of Realtors wants to be very proactive in this.







                                                                   101
       1      We're all very concerned about it.

       2             And one of the things that was in the series

       3      was that, a realtor might be asked by a tester --

       4             Or, in actuality, I do a lot of real estate

       5      law.

       6             -- you know, "What about the school

       7      district?"

       8             Right?

       9             That seems to be the number-one question that

      10      people -- that the people ask when they're going to

      11      realtors, whether they have kids, or whether they're

      12      older and they're going to sell their house at some

      13      point, going, "What about the school district?"

      14             And I got the impression from the article

      15      that perhaps they were thinking, Is this a code, or

      16      a buzzword, or a dog whistle, as to who lives there

      17      and what's their ethnic make-up, about the school

      18      district?

      19             Can you just tell me and the other panel --

      20      panelists here, what -- what's the appropriate way

      21      of saying that without being racist or

      22      discriminatory?

      23             FRED FREIBERG:  Well, I guess I'll take the

      24      first step, but I imagine you'll have something to

      25      say about this too.







                                                                   102
       1             I -- I think the real -- real estate industry

       2      know -- has known for a long time that references to

       3      schools, particularly in areas like New York City

       4      and Long Island where the schools are very

       5      segregated, that it can become a proxy for race.

       6             SENATOR BOYLE:  Right.

       7             FRED FREIBERG:  And so the problem with a lot

       8      of the conduct we viewed on the recordings, and in

       9      the tests that were conducted, was agents -- and in

      10      those cases, incidentally, just so you know, the

      11      testers did not bring up the subject of, How are the

      12      schools? or anything like this.

      13             You may be describing the situation that a

      14      real homeseeker might do, but that's not what

      15      happened here.

      16             The agents affirmatively brought up the

      17      subject.

      18             So I think the general rule of thumb is, that

      19      agents are not experts on schools, and they ought

      20      not to be rendering opinions on the qualities of

      21      schools.

      22             If they want to direct someone to a website

      23      or to information, I think that's -- and they direct

      24      everybody to the same information, then I think

      25      they're on pretty solid ground.







                                                                   103
       1             But when they start offering their personal

       2      opinions, "This school is bad," you know, "Elmont is

       3      a terrible place for schools," even though the

       4      Elmont High School is a 96 percent graduation rate,

       5      and -- you know, has -- you know, has -- has a great

       6      track record, I think they get into trouble, and

       7      because they're really talking about the race of the

       8      students, not -- not the performance of the school.

       9             SENATOR BOYLE:  Thank you.

      10             ELAINE GROSS:  Yeah, and I would just echo

      11      that, and also say that, you ask about, "Is it a dog

      12      whistle? or something."

      13             And it goes back to the prior comment that

      14      I said:  Usually, when the realtors get into that,

      15      they aren't giving everybody the same information.

      16             And so, while you can't get into the head of

      17      that realtor, the reality is, that they're using

      18      that to talk about race.

      19             And so -- and -- and it's clear, they're not

      20      supposed to be doing that.

      21             SENATOR BOYLE:  Thank you.

      22             SENATOR SKOUFIS:  Next up, Senator Liu.

      23             SENATOR LIU:  Thank you, Chair Skoufis.

      24             Thanks for being here.

      25             I feel like -- I feel like it's 1950.







                                                                   104
       1             And that some of the things that I'm hearing

       2      from the two of you, and reading in this report,

       3      it's just -- it's an awakening.  A rude -- a rude

       4      and nauseating awakening, is what it is.

       5             So I want to thank the Chairs for having this

       6      hearing.

       7             You know, "Newsday," and Arthur Brown and his

       8      team --

       9             And I've been on the receiving end from

      10      Arthur Brown myself, so...

      11             -- but, his report, their report, stop at the

      12      confines of the Long Island borders.  They don't --

      13      they don't go beyond that [indiscernible] -- in

      14      Suffolk counties.

      15             But you -- the two of you are experts on this

      16      matter.

      17             What I would ask you:  If this kind of

      18      project was conducted anywhere else in the state of

      19      New York, would you expect similar results?

      20             I mean, this is not a problem that's isolated

      21      on Long Island.

      22             ELAINE GROSS:  It's not a problem that's

      23      isolated on Long Island, but Long Island's history,

      24      which Senator Thomas spoke to at his opening

      25      remarks, that history means that Long Island is







                                                                   105
       1      particularly pernicious.

       2             And so -- you know, and we haven't had the

       3      kind of investigation that "Newsday" did.  I don't

       4      believe that that's happened anywhere else in

       5      New York State, certainly not in recent history.

       6             So, you know, maybe we don't have that kind

       7      of evidence, but I do think that, wherever it's

       8      happening, and if it's a little better somewhere

       9      else, or a little worse somewhere else, it doesn't

      10      matter.  It's -- it's all bad.

      11             FRED FREIBERG:  My answer to your question

      12      would be:  I think you could replicate this in most

      13      metropolitan areas around the country and get the

      14      same results.

      15             It might be, as Elaine said, some slightly

      16      worse, some slightly better.  But I think you'll

      17      find that the real estate industry has been given a

      18      pass for many years.

      19             The last big racial steering cases were

      20      actually brought in the 1980s in this country.  And

      21      since then, there's been sort of a tacit assumption,

      22      or, I don't -- I don't what -- you know, what the

      23      actual word is here, but it strikes me that they --

      24      they've not been scrutinized the way they should

      25      have been.







                                                                   106
       1             And I've suspected all along the

       2      discrimination is just as pervasive everywhere.

       3             From my experiences in working in other

       4      markets around the country, and the rental testing

       5      I've done in Detroit and Miami and Los Angeles, and

       6      other places, when I was with the department of

       7      justice, told me that there weren't a lot of

       8      variations between these metropolitan regions.

       9             If they're very segregated, there's a good

      10      chance that there are violators operating in the

      11      housing market, and that race still infects, in a

      12      systemic way, housing-market practices.

      13             SENATOR LIU:  So, we're going to hear from

      14      some real estate executives, shortly.

      15             I think, my guess, is that they will probably

      16      say that they're complying with the laws.  And to

      17      the extent that they have violaters among the ranks

      18      of their agents, they're bad apples and they'll be

      19      dealt with.

      20             Do you think that -- do you think the

      21      companies, the real estates companies themselves --

      22      I mean, we have small -- small brokerages or

      23      agencies, but we have some very large companies

      24      all -- as well, that -- that either give out

      25      franchises, or operate their own company-run







                                                                   107
       1      brokerages.  They provide training.

       2             Are those companies responsible for some of

       3      this, or, is it just bad apples?

       4             FRED FREIBERG:  Well, the companies are

       5      responsible for the bad apples.

       6             So if they have -- if they have agents who

       7      are violating the fair-housing laws, the principal

       8      brokers are -- are going to have to be looking at

       9      the potential that they will be accused of

      10      discrimination as well, because they're responsible.

      11             If you run a business, and you have people

      12      doing business on your behalf, you're responsible

      13      for what they do.

      14             So, it's incumbent upon these companies to

      15      have solid policies in place, not just the three

      16      credits of training that real estate licensees are

      17      required to get, but internal policies.

      18             If you or I ran a company, presumably, we

      19      would want to make sure that our employes are

      20      following our rules.

      21             And I'm not so sure that companies are always

      22      as conscientious about adopting solid fair-housing

      23      policies internally and enforcing them with their

      24      employees.

      25             SENATOR LIU:  Well, it was mentioned before







                                                                   108
       1      that, you know, part of the problem could be that

       2      it's -- it's very difficult to be caught, or, it

       3      would rare for some in -- either an agent or a

       4      company to be caught in this kind of discriminatory

       5      practice.

       6             Is it -- is -- should the fines or penalties,

       7      therefore, much more substantial than they currently

       8      are?

       9             And should it fall the individual agents, or

      10      the companies more so?

      11             FRED FREIBERG:  Well, the --

      12             ELAINE GROSS:  I think --

      13             FRED FREIBERG:  -- yeah, go ahead.

      14             ELAINE GROSS:  I think it's -- it's critical

      15      that we not try to say that, somehow, real estate

      16      companies are different than other companies.

      17             Companies would not say, Well, it's okay if

      18      I have these people working here, and they're in the

      19      finance department, but they really don't have

      20      finance skills.

      21             You know, no one would say that.

      22             But, somehow, it's okay to have people

      23      working in real estate companies, and -- you know,

      24      but they're really up on what they can do, and can

      25      do -- can't do, or what they're supposed to be







                                                                   109
       1      doing.

       2             They really don't have a full appreciation

       3      for what it means to offer quality service to

       4      everybody who walks in your door; ethical service,

       5      non-discriminatory service.

       6             So, somehow, you know, there's a real

       7      disconnect, that real estate companies, it's -- you

       8      know, the agents are -- you know, they're just on

       9      their own and they'll do what they do.

      10             So, yes, the companies are definitely

      11      responsible.

      12             And if it was a priority, like it was a

      13      priority for some other aspect of their

      14      qualifications, then they would see to it that all

      15      of the agents were doing what they're supposed to.

      16             FRED FREIBERG:  Let me offer one more

      17      explanation.  I was going to flip -- flip this on

      18      its head with another question that was asked of me

      19      before, but I think it's -- this is probably a good

      20      opportunity to do it, and that is:

      21             When you look at the history of real estate

      22      from the very beginning, 1908 was the beginning of

      23      the organized real estate industry in this country.

      24             By 1913, they were advising all of their

      25      members to not contribute to race mixing.







                                                                   110
       1             By 1970, they -- '17, they were handing out

       2      race-restrictive covenants, and ordering their

       3      members to comply.

       4             By 1924 to 1950, they had their code of

       5      ethics, which actually obligated a real estate -- a

       6      realtor to discriminate.  It was an ethical

       7      obligation to discriminate.  And they sanctioned

       8      agents who didn't comply with that.

       9             Not only did the industry do that, but then

      10      they developed a model agreement, and sent it around

      11      to all the state licensing agencies, and said,

      12      "Adopt our code of ethics, and sanction licensees

      13      the same way."

      14             And 32 states adopted that code, [microphone

      15      turned off] and did, in fact, sanction real estate

      16      agents who did not comply with the requirement to

      17      discriminate.

      18             By 1927, they were circulating model

      19      race-restrictive covenants.

      20             By 1928, half of all homes owned by White

      21      people in the United States have race-restrictive

      22      covenants.

      23             Now that's compliance.

      24             [Microphone turned on.]

      25             They know how to get compliance with their







                                                                   111
       1      membership, if they want to, because they did it in

       2      segregating this society.

       3             Now it's time to flip this on its head and

       4      say to them, Show the same zeal now in enforcing

       5      your code of ethics, which now requires agents not

       6      to discriminate.

       7             SENATOR LIU:  So I'm not -- I'm detecting a

       8      slight lack of confidence on your part about the

       9      real estate [microphone turned off] industry.

      10             [Microphone turned on.]

      11             My question is:  Should penalties be raised?

      12             FRED FREIBERG:  Penalties --

      13             SENATOR LIU:  Should they be --

      14             FRED FREIBERG:  Penalties for the division of

      15      license and services certainly shouldn't be at

      16      $1,000.  Those should be raised.

      17             But the penalties under the fair-housing laws

      18      are actually sufficient.  It's just the lack of

      19      enforcement that is the problem.

      20             SENATOR LIU:  Thank you.

      21             Thank you, Mr. Chair.

      22             SENATOR SKOUFIS:  Next up, Senator Brooks.

      23             SENATOR BROOKS:  Thank you, Mr. Chairman.

      24             A lot of comments that was made by several

      25      people this morning, already, in terms of the number







                                                                   112
       1      of complaints and violations, is the fact that most

       2      consumers don't recognize they've been discriminated

       3      against.

       4             How do we change that?

       5             How do we get the folks that are dealing with

       6      realtors, at whatever level, better understand what

       7      services and what actions they should be expecting?

       8             ELAINE GROSS:  Well, there certainly can be

       9      much more aggressive effort to tell people about

      10      their rights, and to -- you know, there should be,

      11      you know, the PSAs on television and the radio.

      12      And the agencies responsible for enforcing fair

      13      housing, and the licensing, you know, the realtors

      14      as well, should be very up front.

      15             Everybody needs to be much more vigilant and

      16      persistent in letting the general public know that

      17      they have rights, and what to do about it.  And to

      18      make it -- you know, make it easier for people to

      19      file complaints, and that kind of thing.

      20             But I think as Fred has said several times,

      21      it's very hard for an individual, even if they knew

      22      they had rights.

      23             You know, when I was discriminated against,

      24      the person was very nice to me.

      25             I only found out about it after the fact,







                                                                   113
       1      that I had been discriminated against.

       2             SENATOR BROOKS:  Do we need a consumer's bill

       3      of rights-type situation when dealing with realtors?

       4             FRED FREIBERG:  The problem, Senator, again,

       5      I think is that, if -- if I was to send you out into

       6      the housing market, and I had an African-American

       7      man your age go out opposite you, and you went in

       8      and you requested housing, and it was given to you,

       9      you were shown units, and so forth, and your

      10      African-American counterpart was treated very

      11      nicely, very friendly, given all the courtesies, but

      12      told, Uhm, I've got nothing here, but maybe I've got

      13      another building somewhere else; who -- you wouldn't

      14      file a complaint in this situation.  And your

      15      counterparty wouldn't either, because he would have

      16      no knowledge that you were shown those apartments,

      17      or shown those homes.

      18             And that's -- that -- I apologize for

      19      harkening back to that constantly, but this is the

      20      point of the "Newsday" story:  You can't know that

      21      you're being discriminated against.

      22             No amount of education.

      23             I have worked with people with high

      24      degrees -- educational degrees, who came back and

      25      said, I didn't know I was treated differently than







                                                                   114
       1      my counterpart.

       2             It has nothing to do with your awareness or

       3      education, or anything.

       4             It really has to do with the nature of the

       5      discrimination itself, which has now been reduced to

       6      a point where people, consumers, can no longer

       7      detect that discrimination is occurring.

       8             SENATOR BROOKS:  It's absolutely something we

       9      have to address.

      10             I think, too, as many of these problems are

      11      being identified, we have to look at

      12      continuing-education requirements that have to go to

      13      the realty community.

      14             And there's been a quick discussion here in

      15      terms of penalties.

      16             And I think, Elaine, in your response to one

      17      of the questions you had, your emotional reaction

      18      demonstrates, clearly, the real damage that's being

      19      done here, from an emotional standpoint.

      20             And I think, realistically, when we look at

      21      this, and we realize how flagrant it is in the end,

      22      I think the penalty has to truly fit the crime.

      23             ELAINE GROSS:  And the best thing to do, is

      24      that those individuals cannot be licensed real

      25      estate agents.  That's the best penalty.







                                                                   115
       1             And I understand, you know, there are

       2      processes, and, et cetera, but that's where it needs

       3      to end up, and it needs to get there in a fairly

       4      speedy way.

       5             SENATOR BROOKS:  Thank you, Mr. Chairman.

       6             SENATOR SKOUFIS:  Thank you.

       7             Rounding out this series of questions,

       8      Assemblyman Lavine.

       9             ASSEMBLYMAN LAVINE:  I'd like to thank the

      10      Senate for convening this critically important

      11      hearing.

      12             And I'd also like to thank my colleagues and

      13      friends in the Senate for allowing me, as a mere

      14      member of the Assembly, to participate.

      15             And I want to thank as well, Elaine and Fred,

      16      for your commitment to justice, and for being at the

      17      frontline of the battle for human rights, not just

      18      today, but for years.

      19                [Applause.]

      20             ASSEMBLYMAN LAVINE:  That's a good applause

      21      line.

      22             Fred, you referenced the need, perhaps you

      23      suggested the need, for a statewide zoning and

      24      appeals board.

      25             How would you -- and this is a question for







                                                                   116
       1      both of you:  How would you imagine or envision such

       2      an entity would function?

       3             FRED FREIBERG:  Well, we have a recent

       4      example of a community right here in Nassau County

       5      who was actually found liable for engaging in race

       6      discrimination in their -- in exclusionary zoning

       7      practices: Garden City.

       8             It's taken 14 years to get an outcome on that

       9      case.

      10             Is this how we propose to override and deal

      11      with exclusionary zoning on a community-by-community

      12      basis?

      13             I would hope not, because there aren't enough

      14      attorneys to bring 14 years of litigation against

      15      each community that's engaged in these practices.

      16             We have to find way to create a state agency

      17      that could -- would have the authority to override

      18      local zoning where it appears that decisions are

      19      being made for discriminatory reasons, or just to

      20      delay and stall in order to elude their obligations

      21      to produce some affordable housing.

      22             And -- and we see this time and time again.

      23             You just celebrated, I guess, the development

      24      in East Northport that had been languishing for

      25      40 years.







                                                                   117
       1             And now, at the end of the day, eight units

       2      of affordable housing for people with disabilities

       3      is the outcome.

       4             That's pretty sad, when it started out as an

       5      all-affordable development, and it took 40 years to

       6      actually get any housing built at all.

       7             This -- this can't be the way we provide

       8      affordable housing on Long Island, or any anywhere

       9      else in the state.

      10             So our belief is -- and there was a zoning

      11      appeals board in place at one point in our state's

      12      history, but it was actually -- its authority was

      13      taken away from it.

      14             And -- and I know a little bit about the

      15      history.

      16             And I think we need to look at it again

      17      because, without having -- there are cases where

      18      people, even as of right, have an ability to build

      19      housing, and there are delays by the locality to

      20      give permits, to get back to developers, and they

      21      try to stall as long as they can until the developer

      22      loses interest or financing.

      23             And that's got to stop.

      24             There has to be a way to short-circuit that

      25      process if it's known that it's being done







                                                                   118
       1      deliberately to try and avoid allowing this housing

       2      in the community.

       3             We need to expand housing choices for people

       4      at all income levels.  And -- and we have to find

       5      some mechanism at the state level to facilitate

       6      that.

       7             And I know this is controversial, and I know,

       8      in Long Island certainly it would be.

       9             But I think this is a serious problem.

      10             It's a problem in Westchester County.

      11             It's a problem in Rockland County.

      12             It's not peculiar to Long Island.

      13             ELAINE GROSS:  I'll just add just one other

      14      footnote.

      15             It was only a week ago, or two weeks ago,

      16      when I was offering testimony, when the final piece

      17      of funding to support the affordable-housing project

      18      that Fred was referring to, in Huntington, came

      19      before the Suffolk County Legislature.

      20             And even after 30 years, after the

      21      Supreme Court ruled that the Town had discriminated

      22      against the developer trying to build the housing,

      23      for that 30-year period, you would think that a

      24      Supreme Court case would make everybody stand at

      25      attention and do what they're supposed to do.







                                                                   119
       1             But it was 30 years later, and we also

       2      weren't sure, at that Suffolk County hearing, when

       3      they were voting on funding for infrastructure, that

       4      would be the last little financial piece to allow

       5      that development to move forward, it was not clear

       6      up until the day that we had the votes.

       7             So that just tells you that the -- the

       8      persistence of being determined, that we are going

       9      to keep that community White, you'll have to walk

      10      over us in our grave before we'll change, I mean,

      11      that is the -- that's the attitude.

      12             ASSEMBLYMAN LAVINE:  So let me -- let me say

      13      this:

      14             You have both highlighted the absolute need

      15      for government involvement here to address this

      16      crisis.

      17             And after all, it's only fair because,

      18      government, along with other major institutions,

      19      certainly played a role in getting us to where we

      20      are today.

      21             But -- and you quoted some of the giants of

      22      the twentieth century, Einstein and Dr. King.

      23             I want to just add one other quote, that

      24      I hope you'll use, and that is a quote of America's

      25      greatest lawyer of the twentieth century,







                                                                   120
       1      Thurgood Marshall, who said, "Yes, laws really do

       2      change the hearts of men and women."

       3             And, finally, Elaine, you described what had

       4      occurred to you with great emotion.

       5             And we have -- we have felt that.

       6             And, perhaps, and especially perhaps, given

       7      what's going on in our nation today with hate,

       8      hatred running rampant, and reasons for that lie

       9      elsewhere other than this hearing today, but,

      10      perhaps, each and every American of good faith must

      11      rise to the occasion, and become not just someone

      12      who has an interest in fairness, but become an

      13      actual anti-racist.

      14             Our nation depends on that.

      15             And thank you both.

      16             ELAINE GROSS:  Thank you.

      17             FRED FREIBERG:  Thank you.

      18             SENATOR SKOUFIS:  I want to sincerely thank

      19      you for your contributions today.

      20             And I strongly suspect that in the coming

      21      weeks and months we will continue to be speaking

      22      with one another.

      23             ELAINE GROSS:  Okay.  Thank you.

      24             FRED FREIBERG:  Thank you.

      25







                                                                   121
       1             SENATOR KAVANAGH:  Next up we have -- excuse

       2      me -- Ryan Gorman, president and CEO of NRT, LLC.

       3             Thank you, Mr. Gorman, for your -- first of

       4      all, just to begin:  Do you solemnly swear or affirm

       5      to tell the truth, the whole truth, and nothing but

       6      the truth?

       7             M. RYAN GORMAN:  I do.

       8             SENATOR KAVANAGH:  Great.  Thank you.

       9             Okay, so, Mr. Gorman, first of all, you -- so

      10      you understand you have an obligation to testify

      11      truthfully here today.

      12             Is there in you reason you cannot meet that

      13      obligation?

      14             M. RYAN GORMAN:  No.

      15             SENATOR KAVANAGH:  Thank you.

      16             Are you represented by counsel here today?

      17             M. RYAN GORMAN:  I have counsel here today.

      18             I also have a written statement [inaudible].

      19             SENATOR KAVANAGH:  Okay.

      20             Okay, thank you.

      21             Why don't you begin with your open statement.

      22             M. RYAN GORMAN:  Sure.

      23             Good morning, and thank you for the

      24      opportunity to appear before you today, and to

      25      participate in this important process.







                                                                   122
       1             My name is Ryan Gorman.  I'm the president

       2      and chief executive officer of NRT, LLC, the

       3      company-owned real estate brokerage operations of

       4      Realogy Holdings Corporation, headquartered in

       5      Madison, New Jersey.

       6             I've been with Realogy since 2004, serving in

       7      a variety of strategic development and operational

       8      roles.

       9             I've served in my current role since January

      10      of 2018, and I'm a member of Realogy's Corporate

      11      Executive Committee.

      12             Realogy is a global real estate services

      13      firm, with both company-owned and franchised real

      14      estate brokerages across six main brands:

      15      Better Homes & Gardens Real Estate, Century 21,

      16      Coldwell Banker, Corcoran, ERA, and

      17      Sotheby's International Realty.

      18             Realogy also offers a variety of real

      19      estate-related services beyond brokerage, including

      20      relocation, title, settlement services.

      21             Finally, we maintain a residential

      22      mortgage-lending joint venture.

      23             While Realogy operates globally, the U.S. is

      24      our largest market, and we have more than

      25      10,000 employees and nearly 200,000 U.S.-based







                                                                   123
       1      independent-contractor real estate agents affiliated

       2      with either our company-owned brokerages or our

       3      independently owned and operated franchisees.

       4             Realogy's company-owned real estate

       5      brokerage, NRT, operates as Coldwell Banker

       6      Residential Brokerage, the Corcoran Group,

       7      Citi Habitats, and Sotheby's International Realty in

       8      the state of New York.

       9             In total, for those NRT brokerages, there are

      10      4,300 real estate agents affiliated with our

      11      company, operating out of 58 offices across the

      12      state of New York.

      13             Within those statewide numbers, on

      14      Long Island, there are approximately

      15      1,240 affiliated agents, and approximately 25 office

      16      locations of our company-owned brokerages.

      17             In short, Realogy is a global, national, and

      18      local leader in residential real estate services.

      19             And, as a leader, we embrace our implied

      20      obligation to lead the industry in crucial areas of

      21      both consumer service and consumer protection, both

      22      in word and in deed.

      23             For instance, fair-housing awareness and

      24      acknowledgment have long been important components

      25      of NRT's agent onboarding procedures.







                                                                   124
       1             As an example, when a real estate agent

       2      affiliated with one of our company-owned

       3      Coldwell Banker brokerages on Long Island,

       4      affiliates, they're required to sign a fair-housing

       5      pledge, in which they commit to provide equal

       6      professional service to all, without regard to race,

       7      color, religion, sex, handicap, familial status,

       8      national origin, sexual orientation, gender

       9      identity, or other protected status of any

      10      prospective client, consumer, or resident of any

      11      community.

      12             Each of NRT's agents is also required to

      13      maintain his or her real estate license with

      14      New York State.

      15             Accordingly, each agent must attend

      16      fair-housing continuing-education classes to satisfy

      17      the requirements of the New York State real estate

      18      licensing regulations.

      19             At present, the regulations require each

      20      agent to complete three hours of fair-housing

      21      training every two years.

      22             [Audio malfunction begins.]

      23             NRT agents also contractually agree to comply

      24      with all federal, state, and local laws, including

      25      fair-housing laws.







                                                                   125
       1             We take fair housing -- we take the recent

       2      fair-housing-related reporting by "Newsday" very

       3      seriously.

       4             While many of the real estate agents tested

       5      by "Newsday" served all testers well and equally, we

       6      were deeply concerned with the actions and

       7      statements of those agents featured in the report,

       8      and did not [indiscernible].

       9             Realogy does not, and will not, tolerate any

      10      notion of illegal housing discrimination.

      11             Realogy supports the Long Island Board of

      12      Realtors' investigation of any members identified in

      13      the "Newsday" report, so that all the facts and

      14      circumstances can be assessed [indiscernible].

      15             It's the realtor's duty to provide services

      16      to all people consistent with New York law.

      17             Realogy also fully supports the actions

      18      announced by Governor Andrew Cuomo, Long Island

      19      [indiscernible], and will participate in any

      20      continuing dialogue with state and local lawmakers

      21      [indiscernible].

      22             [Audio malfunction resolved.]

      23             While we await results of the investigation

      24      of the Long Island Board of Realtors, we are also

      25      conducting our own inquiry, with the assistance of







                                                                   126
       1      an independent third party, and we will take

       2      appropriate action based on our findings regarding

       3      any of the agents affiliated with any company-owned

       4      brokerage.

       5             Further, these events have afforded us an

       6      opportunity to evaluate the training NRT provides

       7      and requires of its independent-contractor real

       8      estate agents and employees in New York and around

       9      the United States.

      10             We'll be taking additional action to augment

      11      that [indiscernible] require today, specifically

      12      focused on fair housing and, potentially, other

      13      consumer protections.

      14             Beyond compliance, we will work to grow our

      15      companies' and our industry's understanding of

      16      unconscious bias, as well as unintended consequences

      17      of even well-meaning actions that may be driven, in

      18      part, by assumptions or stereotypes.

      19             We also believe more can be done to expand

      20      the scope and impact of existing fair-housing

      21      regulations.

      22             For example, Realogy is a committed and

      23      active supporter of the Fair Housing Act, and is

      24      actively advocating for the expansion of these

      25      protections with the Equality Act.







                                                                   127
       1             In fact, we are proud to be the first

       2      residential brokerage to sign on to the Equality Act

       3      in HR 1447, to amend the Fair Housing Act to include

       4      LGBTQ+ as a protected class.

       5             We're also a major supporter of many industry

       6      groups specifically focused on underrepresented

       7      populations within our communities and within our

       8      sales offices, working to help grow these

       9      organizations and move their missions forward.

      10             Realogy is proud to receive the "World's Most

      11      Ethical Company" designation by Ethisphere Institute

      12      for eight consecutive years, and we continuously

      13      encourage, and expect, our independent-contractor

      14      real estate agents who choose to affiliate with us

      15      to uphold and prioritize the same commitment to

      16      ethics, including the ethical imperative of

      17      equality.

      18             Realogy is committed to serving all consumers

      19      well and equally during an important milestone

      20      moment in their lives: the buying or selling of a

      21      home.

      22             We're proud that the work of our agents, and

      23      that the work of our company, helps New Yorkers find

      24      a place to call home, and helps the communities

      25      across the state grow, prosper, and move forward.







                                                                   128
       1             As the largest residential real estate

       2      brokerage and franchisor in the United States, we

       3      accept our responsibility to lead the industry in

       4      recommitting to understanding and upholding both the

       5      letter and spirit of fair-housing laws, and, to

       6      doing our part to ensure communities we serve have

       7      equal and fair access to home ownership.

       8             Thank you again for the opportunity to

       9      testify, and I do welcome any questions.

      10             Thank you.

      11             SENATOR KAVANAGH:  Thank you very much for

      12      your testimony.

      13             And just to note, we'll discuss this later,

      14      but we -- there were a number of participants

      15      [indiscernible] that were invited here today to

      16      testify.  And we'll be discussing, later in hearing,

      17      our efforts to, you know, get that -- get them

      18      before us.

      19             But, you know, we do acknowledge that you are

      20      a -- voluntarily here today to speak about these

      21      very important issues, and -- and your company's

      22      role in -- in the industry.

      23             So we thank you for that.

      24             Have you had a chance to review the

      25      "Newsday's" reporting on its investigation in its







                                                                   129
       1      entirety?

       2             M. RYAN GORMAN:  In its entirety, I'm not

       3      sure I have reviewed the "Newsday" reporting.

       4             It's entirety, I'm not positive.  There was

       5      quite a bit of video.

       6             So I'm not sure [indiscernible

       7      cross-talking] --

       8             SENATOR KAVANAGH:  You reviewed it

       9      extensively and thoroughly.  Okay.

      10             M. RYAN GORMAN:  Yes.

      11             SENATOR KAVANAGH:  And did you, in

      12      particular, have the opportunity to review the --

      13      there were about four or so hours of videos

      14      regarding employees or agents of NRT companies,

      15      including Coldwell Banker Residential Brokerage?

      16             M. RYAN GORMAN:  Well, I can't speak to any

      17      individual agents today.

      18             I can say that I did review the video in the

      19      main store, as well as, I believe, the follow-up

      20      videos related to those agents.

      21             SENATOR KAVANAGH:  Okay, good.

      22             Arthur Brown, the project director of

      23      "Newsday's" investigations, testified earlier that

      24      "Newsday" offered all companies the opportunity to

      25      view videos and other evidence gathered during the







                                                                   130
       1      investigation, before publication.

       2             Did you, or to your knowledge, anyone else at

       3      NRT, take that opportunity before publication of

       4      this article?

       5             M. RYAN GORMAN:  No.

       6             I saw the videos when it was published.

       7             We're, as I outlined, a large company.

       8             I was not reached out to directly by

       9      "Newsday," but I do believe individuals in the

      10      company were.

      11             And I did not take advantage of seeing the

      12      videos.  I don't think anyone in the company did.

      13             SENATOR KAVANAGH:  Okay.  So you -- just --

      14      to make sure I caught that, you're saying that you

      15      believe that that opportunity was offered, but that

      16      nobody from NRT took that opportunity, to your

      17      knowledge?

      18             M. RYAN GORMAN:  I believe so, yes.

      19             SENATOR KAVANAGH:  Okay.

      20             I'd like to move to a discussion of the

      21      actions of some particular real estate agencies who

      22      worked with NRT's companies, who are subject of the

      23      investigation.

      24             So, first -- we're going to show a video clip

      25      in just a moment.







                                                                   131
       1             So first up, this is Akhtar Somekh of

       2      Coldwell Banker Residential Brokerage of Great Neck.

       3             And on August 16, 2016, Ms. Somekh met with

       4      Kimberly Larkin-Battista, who was looking for a home

       5      in the North Shore, near the water, at a price of up

       6      to $2 million.

       7             And Ms. Larkin Battista was a "Newsday"

       8      tester.

       9             Have you -- maybe we should show the -- let's

      10      just show -- can we show Clip Number 10?

      11                [Start of Video Clip 10.}

      12                [Unable to transcribe video clip; poor

      13        audio quality and acoustics.]

      14                [End of Video Clip 10.]

      15             SENATOR KAVANAGH:  First of all, let me

      16      begin, the sound quality was not pristine.

      17             Were you able to make out the dialogue in

      18      that?

      19             M. RYAN GORMAN:  I believe much of it, yeah.

      20             SENATOR KAVANAGH:  Okay.

      21             So just -- I would just note that:

      22             Ms. Larkin Battista is a White woman.

      23             And that the same comments made by the agent

      24      there were not made to the paired tester, who was

      25      Hispanic -- of Hispanic background.







                                                                   132
       1             So just -- let me just begin by asking:

       2      What's your reaction to what you just saw and heard?

       3             M. RYAN GORMAN:  So I'm happy to participate

       4      today, and speak to the larger issue, and what we

       5      should do, moving forward.

       6             But, with the ongoing attorney general

       7      investigation, as well as Long Island Board of

       8      Realtor investigation, and our own inquiry, I won't

       9      speak directly to any individual agents today.

      10             SENATOR KAVANAGH:  So, just, you aren't

      11      willing to comment today on whether what you saw

      12      comports with the law or the standards of NRT?

      13             M. RYAN GORMAN:  Some of the topics that were

      14      lifted up by that video, one was referenced earlier

      15      today, in terms of school districts, as well as what

      16      the real estate agent's role would be related to

      17      school districts.

      18             And I concur with some of the earlier

      19      testimony, that real estate agents should be able to

      20      point to alternative resources.

      21             Real estate agents are not experts in school

      22      districts, and should point to alternative resources

      23      that a consumer can use to learn the information

      24      they want to learn about those districts.

      25             SENATOR KAVANAGH:  Okay.







                                                                   133
       1             And just -- just to be clear, and, you know,

       2      I'm not sure -- since it's a big room, I'm not sure

       3      all of the audio was entirely clear, but, among the

       4      statements, we just saw this quote:

       5             "Recently we got a lot of Chinese/Oriental

       6      coming in Great Neck.

       7             "In the beginning they start going to south

       8      because they have their friends and family,

       9      everybody south, and it became overwhelmed.

      10             "Usually, the great thing about Great Neck,

      11      is they keep their amount of students smaller

      12      than 20.

      13             "They tried do it, but South School, when it

      14      became very crowded, so they gave Kensington and

      15      Great Neck a choice of North or South.

      16             "This is the new rule."

      17             And just to be clear:  Do you believe that

      18      that kind of commentary is appropriate?

      19             M. RYAN GORMAN:  So, again, while I can't

      20      speak the to any individual agents, certainly, you

      21      raised another topic, in terms of demographic

      22      information, which is another topic where real

      23      estate agents should not be participating in the

      24      general discussion of demographic information.

      25             SENATOR KAVANAGH:  Okay.







                                                                   134
       1             To your knowledge, has NRT or Coldwell Banker

       2      taken any action with respect to Ms. Somekh

       3      concerning this incident?

       4             M. RYAN GORMAN:  So with respect to any

       5      individual agent today, I won't be speaking to

       6      individual actions.

       7             SENATOR KAVANAGH:  Okay.  Can I -- I'm just

       8      going to give you a copy of some commentary from the

       9      "Newsday".  We'll call this Exhibit A.

      10             M. RYAN GORMAN:  Thank you.

      11             SENATOR KAVANAGH:  And can you just read the

      12      highlighted portion?

      13             M. RYAN GORMAN:  The Post-It note?

      14             OFF-CAMERA SPEAKER:  Correct.

      15             M. RYAN GORMAN:  And you would like me to,

      16      what, read this into the record?  Is this not --

      17             SENATOR KAVANAGH:  Yes, if you would.

      18             M. RYAN GORMAN:  -- okay.

      19             So this is from the "Newsday" -- I guess

      20      "Newsday" report, under "Agent and Company

      21      Responses":

      22             "Agent Akhtar Somekh did not respond with

      23      an" -- "did not respond to an invitation to view

      24      video recordings of her meetings with testers or to

      25      follow up e-mails and phone calls requesting







                                                                   135
       1      interviews."

       2             "The company provided the following

       3      statement" -- I'm sorry.

       4             "The company provided the following

       5      statement:

       6             "Incidents reported by "Newsday," that are

       7      alleged to have occurred more than two years ago,

       8      are completely contrary to our long-term commitment

       9      and dedication to supporting and maintaining all

      10      aspects of fair and equitable housing.

      11             "Upholding the Fair Housing Act remains one

      12      of our highest priorities, and we expect the same

      13      level of commitment of the more than 750 independent

      14      real estate salespersons who choose to affiliate

      15      with Coldwell Banker Residential Brokerage on

      16      Long Island.

      17             "We take this matter seriously, and have

      18      addressed the alleged incidents with the sales

      19      persons."

      20             I believe that's the conclusion of it.

      21             SENATOR KAVANAGH:  All right.  Thank you.

      22             And just -- so the question is:  You stated

      23      publicly that NRT and Coldwell have, quote,

      24      addressed the alleged incident with the salesperson.

      25             Can you just tell us what sort of action that







                                                                   136
       1      would entail?

       2             M. RYAN GORMAN:  Again, with respect to any

       3      individual agent or circumstances of this inquiry,

       4      I won't be speaking to individual agents.

       5             SENATOR KAVANAGH:  So just -- again, just --

       6      we're trying to get some clarity of a statement the

       7      company's already made publicly to the media.

       8             You're unable to tell us how -- how, in what

       9      manner, that the company has -- has addressed the

      10      alleged incident, as you've said [indiscernible

      11      cross-talking] --

      12             M. RYAN GORMAN:  I believe this statement is

      13      a statement that preceded the publishing of the

      14      story, if I'm not mistaken --

      15             And someone from "Newsday" could perhaps

      16      verify that.

      17             -- where we were provided with letters, with

      18      certain excerpts.

      19             And based upon those letters, as outlined

      20      here in this statement, action -- inquiry and action

      21      was taken.

      22             Subsequent to this, the videos were posted,

      23      as you've mentioned, extensive videos were posted,

      24      which we -- have now made their way into our

      25      inquiry, and will make their way into our actions.







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       1             SENATOR KAVANAGH:  Okay, again -- so just to

       2      be -- just to be clear, you can't answer today

       3      any -- anything about any inquiry or action that was

       4      taken with respect to this agent?

       5             M. RYAN GORMAN:  Correct.

       6             SENATOR KAVANAGH:  Okay.

       7             I'd like to turn to the actions of a second

       8      agent who worked with NRT's companies as well.

       9             This is Rose Marie Mirando [ph.] of

      10      Coldwell Banker Residential Brokerage of

      11      East Setauket.

      12             Forgive my pronunciation.  I'm

      13      geographically-challenged on Long Island.

      14             This is on May 27, 2016.

      15             Ms. Mirando met with Lawrence Samuels, who's

      16      seeking to purchase a home within 30 minutes of

      17      Port Jefferson, for up to $500,000.

      18             Why don't we roll Clip Number 27, please.

      19                [Start of Video Clip 27.]

      20             THE AGENT:  [Indiscernible] bath, basement,

      21      two-car garage, you know, something like that.  Yes,

      22      so I'm already, in my head, thinking of certain

      23      inventory for you.

      24             [Indiscernible] Stoney Brook, it's okay.

      25             I just -- I -- you know, you may -- you don't







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       1      really know certain areas --

       2             THE TESTER:  Uh-huh.

       3             THE AGENT:  -- what you're going to get next

       4      door.

       5             THE TESTER:  Right.

       6             THE AGENT:  That's the problem.  And there's

       7      pockets [indiscernible] too, you know, down by the

       8      train, any area there.

       9             What I say is, always to women, Follow the

      10      school bus.

      11             You know, that's what I always say:  Follow

      12      the school bus.  See the moms that are hanging out

      13      on the corners.

      14             Wherever you're going to buy diapers, you

      15      know, during the day, go at 10:00 at night, and you

      16      see if you like [indiscernible].

      17             I mean, really, that's the way to really take

      18      a look at.

      19             I tell women this all the time.

      20             THE TESTER:  Right, right.

      21             THE AGENT:  There was one fellow who would --

      22      like, insisted on this house.  And the wife was

      23      pregnant, had a little one, and I said to him,

      24      I can't say anything, but I encourage you, I want

      25      you to go there at 10:00, with your wife, and buy







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       1      diapers.  Go to that 7-Eleven.

       2             He didn't buy there.  [Laughing.]

       3             THE TESTER:  No, that's great.

       4             THE AGENT:  I have to say it without saying

       5      it.

       6             You know, you have the knowledge of the

       7      areas, you know.

       8             THE TESTER:  Yes.

       9             THE AGENT:  And, look, I care for families.

      10      I'm a family person.

      11             THE TESTER:  Right.

      12             THE AGENT:  I care for my children.

      13             And, you know, when you're putting them in

      14      other people's care, I take first-time homebuyers

      15      there all the time.

      16             I don't want to use the word "steer," but

      17      I try to --

      18             THE TESTER:  No, that's [indiscernible] --

      19             THE AGENT:  -- [indiscernible] I educate in

      20      the areas, you know.

      21             THE TESTER:  Absolutely.  That's

      22      [indiscernible] --

      23             THE AGENT:  I was a first-time homebuyer

      24      myself one time, and I remember what the first agent

      25      told us, I don't know, 30 years ago.







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       1             And I'm, like, what a creep.

       2             When you think about it now, you know, and

       3      how much I've learned over the years, I mean, it's

       4      all about the location.

       5             THE TESTER:  Right.

       6             THE AGENT:  And you're going to want to have

       7      good resale value.

       8             THE TESTER:  Right.

       9                [End of Video Clip 27 stops.]

      10             SENATOR KAVANAGH:  Okay.  So, again, this was

      11      during a 26-minute conversation between Ms. Mirando

      12      and Mr. Samuels.

      13             And can I ask just for your reaction to what

      14      we just saw?

      15             M. RYAN GORMAN:  So with regard to any

      16      individual agent, I won't be speaking about the

      17      content or the company's reaction or action related

      18      to the individual agents.

      19             SENATOR KAVANAGH:  Okay.

      20             Without commenting on the -- on the specific

      21      treatment of this agent, do you believe that the

      22      activity you just saw, that kind of exchange, is

      23      appropriate?

      24             M. RYAN GORMAN:  So generally speaking, it's

      25      inappropriate for a real estate agent to comment on







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       1      individual areas in ways that involve demographics

       2      and, in some cases, school information.

       3             That is a segment that was just shown of

       4      something larger.

       5             So I can say, with regard to demographics and

       6      school districts, it would be inappropriate to

       7      reference.

       8             SENATOR KAVANAGH:  If a -- if an agent says

       9      something as we just heard, like, "I don't want to

      10      use the word 'steer,' but I try to -- I educate in

      11      the area," do you think that the substitution of the

      12      verb "educate" for the verb "steer" alters the basic

      13      nature of that interaction?

      14             M. RYAN GORMAN:  So, again, I won't speak to

      15      individual commentary of agents, but, certainly,

      16      "steering," and any euphemisms for "steering," or

      17      any proxies for "steering," are inappropriate and

      18      unacceptable.

      19             SENATOR KAVANAGH:  Okay.

      20             And I won't hand you Exhibit B, which is a

      21      similar text from "Newsday".

      22             But, again, this company stated that it

      23      took -- it takes this matter seriously, and have

      24      addressed the alleged incidents with the

      25      salespersons in question.







                                                                   142
       1             Again, can you -- can you confirm that NRT

       2      has, in fact, addressed the incidents with respect

       3      to the salespeople in question, as you stated in a

       4      comment to "Newsday"?

       5             M. RYAN GORMAN:  So, again, that statement

       6      was prior to the release of the article, as well as

       7      the video.

       8             And I believe, subsequent to the video, the

       9      commentary we provided to the committee, was that we

      10      have launched our own inquiry, and we're also

      11      participating here today with the attorney general's

      12      process, as well as the Long Island Board of

      13      Realtors process.

      14             SENATOR KAVANAGH:  But you had taken some

      15      action in advance of publication, as you stated, in

      16      the -- to "Newsday"?

      17             M. RYAN GORMAN:  Yeah, the statement made is

      18      accurate.

      19             SENATOR KAVANAGH:  Can you tell us what, if

      20      anything, was done in that stage, before the --

      21      before the publication and the investigation?

      22             M. RYAN GORMAN:  No.

      23             With regard to an any individual agent or

      24      circumstance, I won't be commenting on that.

      25             SENATOR KAVANAGH:  Okay.







                                                                   143
       1             We'll continue that dialogue, going forward.

       2             Can you speak to your -- some of your

       3      prepared remarks touched on this, but I want to

       4      discuss in more detail, NRT's actions, or your

       5      subsidiary's actions, that you've taken to assure

       6      compliance with federal, state, and local laws that

       7      bar discrimination.

       8             So you mentioned that -- I'll quote you here:

       9      Fair-housing awareness and acknowledgment have long

      10      been important components of NRT's agent onboarding

      11      procedures.

      12             Can you tell us how that works?

      13             M. RYAN GORMAN:  Sure.

      14             In that particular instance, when an agent

      15      joins our organization, they, literally, sign and

      16      attest to a number of things, one of which is, their

      17      current and enforced license, which, of course,

      18      would require them to abide by New York State law.

      19      And, having taken initial licensure, as well as

      20      continuing-education courses that include Fair

      21      Housing Act.

      22             Two is, the signature to the -- our own

      23      fair-housing policy, and acknowledgment, based on

      24      our fair-housing pledge, that they would separately

      25      acknowledge, separate and apart from the State







                                                                   144
       1      requirements.

       2             And then ongoing from there, we have a number

       3      of programs and procedures, and we touch on, of

       4      course, fair housing, as well as other ethics and

       5      compliance topics, throughout the year.

       6             SENATOR KAVANAGH:  And can you provide this

       7      committee with a copy of that document that's

       8      pledged, that your agents are asked to sign at the

       9      beginning of their relationship with NRT or

      10      [indiscernible cross-talking] --

      11             M. RYAN GORMAN:  I'm sure we can follow up.

      12             It is publically available on all of our

      13      websites as well.

      14             SENATOR KAVANAGH:  Do you -- is there a

      15      standard process and a standard pledge throughout

      16      all of the NRT companies, or is there -- does

      17      that -- does that process vary among different

      18      affiliates?

      19             M. RYAN GORMAN:  So NRT is an entity that's

      20      grown through acquisition.  And, so, as different

      21      companies have become part of our organization,

      22      they've adopted the approach that I just outlined.

      23      But there is some variation among the different

      24      entities.  For instance, Sotheby's, Cocoran, and

      25      Coldwell Banker in the state of New York have some







                                                                   145
       1      degree of variation.

       2             SENATOR KAVANAGH:  Can you talk about what

       3      kind of variation that would be?

       4             M. RYAN GORMAN:  In terms -- for the most

       5      part, it relates to what is augmented, in terms of

       6      fair-housing-awareness training; programs that are

       7      put on during the year.

       8             They may vary.

       9             For instance, between New York City and

      10      Long Island, New York City has a specific set of

      11      laws, I'm sure you're aware, and the training

      12      related to those laws is specific to New York City;

      13      where, Corcoran and Sotheby's operate, largely, and

      14      Coldwell Banker, largely, does not on the

      15      owned-brokerage side.

      16             SENATOR KAVANAGH:  So just -- just with

      17      respect -- we'll talk a little bit more about

      18      training in a minute.

      19             But just with respect to this policy of

      20      ensuring that everybody signs a pledge at the

      21      beginning of their relationship, that -- you're

      22      testifying that that is a -- a standard practice

      23      across all of your -- your affiliates?

      24             M. RYAN GORMAN:  I can't say the same pledge

      25      is standard across all of owned-brokerage







                                                                   146
       1      components.

       2             The majority I can attest to, yes.

       3             But I want to answer honestly, and I can't

       4      say that it is every one of the divisions are

       5      signing the exact same pledge.  I don't know that.

       6             SENATOR KAVANAGH:  So it's standard practice

       7      to have a pledge, and have it signed, but some

       8      var -- perhaps some variation [indiscernible

       9      cross-talking] --

      10             M. RYAN GORMAN:  Standard practice to have

      11      acknowledgment of the fair-housing obligations and

      12      procedures, but it may vary between the entities.

      13             SENATOR KAVANAGH:  Does NRT take any steps to

      14      confirm affiliates' compliance with that policy?

      15             M. RYAN GORMAN:  I'm sorry, the agents who

      16      affiliate to confirm it?

      17             It is part of the onboarding procedure.

      18             So, for instance, our onboarding team has a

      19      checklist that they'll go through, and then make

      20      sure that the files are as complete as they need to

      21      be when an agent joins.

      22             So this would be part of that -- that

      23      compliance procedure.

      24             SENATOR KAVANAGH:  So there would be a review

      25      of -- I mean, I guess I'm asking:  So, Coldwell, for







                                                                   147
       1      example, which is one of the [indiscernible], is

       2      there somebody reviewing whether Coldwell is

       3      complying with that across their many agents?

       4             M. RYAN GORMAN:  So our

       5      independent-contractor relations and licensing teams

       6      would likely be the teams that are ensuring the

       7      files are complete.

       8             SENATOR KAVANAGH:  Have you -- so let's talk

       9      about training.

      10             Actually, can you describe the training that

      11      is available at that stage of their relationship.

      12             M. RYAN GORMAN:  At the onboarding?

      13             There's not a specific training at the point

      14      of onboarding.

      15             There's training throughout the year, and

      16      over the year.

      17             So the number-one obligation, of course, is

      18      that an agent maintains their license, and completes

      19      whatever training is required by the State, which

      20      I think you're aware of what that is at this point

      21      in New York.

      22             So that's required.

      23             Additionally, throughout the year, there's,

      24      both, continuing-education credit, you know,

      25      eligible, as well as non-eligible, training that







                                                                   148
       1      will take place.

       2             It does vary considerably over different

       3      points in time and different areas, but fair housing

       4      is a component of a lot of different -- of our

       5      training programs.

       6             Beyond that, we have partnerships with

       7      industry organizations that focus on different

       8      segments, and, typically, underrepresented segments,

       9      of our population.

      10             We're often attending those conferences, and

      11      inviting individuals from those groups in.

      12             We also have a number of programs, an example

      13      of which, on the Coldwell Banker Residential

      14      Brokerage side, is Agents of Change, which is an

      15      inclusivity-focused program, that is sort of an

      16      evolution of a program we've had for a while.

      17             So, as an example, we've put on, I believe

      18      six -- five or six of those in the last few months.

      19      And we'll be doing more shortly.

      20             Just -- that's a program that's evolved more

      21      recently.

      22             SENATOR KAVANAGH:  Do you confirm -- I mean,

      23      do you have -- you have brokers sort of certifying

      24      that they've done the training, or do you sort of

      25      affirmatively confirm that agents are receiving the







                                                                   149
       1      training they need, and that --

       2             M. RYAN GORMAN:  So for the State training,

       3      the State's obligation would be to ensure that they

       4      have completed the continuing-education

       5      requirements.  And our obligation is to ensure

       6      they've met the State requirements.

       7             In terms of beyond that, obligatory training

       8      beyond that, that is, as I mentioned in my opening

       9      remarks, something that we're looking at, to -- as a

      10      potential augmentation to our current procedures, to

      11      add additional obligatory training, not just in

      12      New York, but nationally.

      13             Today, that's not the case; there's not

      14      obligatory additional training beyond their -- their

      15      [indiscernible cross-talking] --

      16             SENATOR KAVANAGH:  Beyond -- beyond the

      17      minimum required for the State -- the State's

      18      licensing program?

      19             M. RYAN GORMAN:  Right.

      20             There's considerable training provided, and

      21      available, but not obligatory.

      22             SENATOR KAVANAGH:  And the -- from the

      23      "Newsday" reporting, it sounds like most agents in

      24      this area are meeting their training requirements

      25      through Long Island Board of Realtors training







                                                                   150
       1      that's offered by that entity.

       2             Is that your sense?

       3             M. RYAN GORMAN:  I can't speak to that.

       4             Certainly, the Long Island Board could speak

       5      to it.

       6             Continuing-education eligible training is

       7      available in a variety of places, both, online,

       8      in-person, at conferences, and at state and

       9      national.

      10             So I can't speak to what the makeup is of it

      11      today.

      12             SENATOR KAVANAGH:  There was some discussion

      13      in the "Newsday" reporting about the quality of that

      14      training, the extent to which the training included

      15      the components that are required regarding fair

      16      housing.

      17             Has your -- have your companies ever made any

      18      effort to assess the quality of that training --

      19      the -- the quality of the training that's available,

      20      the extent to which it meets minimum legal

      21      requirements?

      22             M. RYAN GORMAN:  No, we've not eval -- to my

      23      knowledge, we've not evaluated the specific training

      24      available through Long Island Board of Realtors.

      25             I can say that this process has led me to







                                                                   151
       1      believe that we need to have our own training, to

       2      augment that which may be available or required from

       3      the State.

       4             SENATOR KAVANAGH:  Okay.

       5                [No audio/microphone turned off.]

       6             M. RYAN GORMAN:  [No audio/microphone turned

       7      off.]

       8             SENATOR KAVANAGH:  [Microphone turned on at

       9      very low volume.]

      10             Is there any company policies that instruct

      11      staff to report information that someone may be

      12      working in violation of fair-housing laws?

      13             M. RYAN GORMAN:  Certainly.

      14             So I mentioned earlier that ethics is

      15      obviously core to us as a company; has been for a

      16      very long time.  And we speak extensively about

      17      that, all manner of ethics.

      18             So all of our employees receive training that

      19      is obligatory about ethics, including how and when

      20      to report complaints, how and when to field

      21      complaints, and what action should be taken when a

      22      complaint, or any ethical concern, frankly, you

      23      know, arises.

      24             SENATOR KAVANAGH:  Including complaints about

      25      fellow -- about colleagues in the industry, and







                                                                   152
       1      behavior --

       2             M. RYAN GORMAN:  Of course.

       3             SENATOR KAVANAGH:  -- they might --

       4             M. RYAN GORMAN:  In fact, those are the

       5      specific instances we use in training, to make sure

       6      awareness and understanding are high.

       7             SENATOR KAVANAGH:  Okay.  Would you be

       8      willing to share with the Committee the materials

       9      you use for that training, and the -- and any

      10      policies -- any formal policies that are distributed

      11      to employees and affiliates around that?

      12             M. RYAN GORMAN:  We can certainly follow up

      13      with the Committee's staff that we've been in touch

      14      with already.

      15             I believe there have been some requests for

      16      information already.

      17             SENATOR KAVANAGH:  Have -- has NRT or your

      18      affiliates received complaints of violations of

      19      fair-housing standards?

      20             M. RYAN GORMAN:  I can't speak to individual,

      21      you know, complaints, or sort of a number of

      22      complaints.

      23             We certainly are very large, and have

      24      operated for a very long time.  But I can't speak to

      25      a specific, you know, number or set.







                                                                   153
       1             SENATOR KAVANAGH:  Okay -- okay, can you

       2      answer, to your knowledge, has NRT or its affiliates

       3      received any complaints of violations of fair

       4      housing in the last year, say?

       5             M. RYAN GORMAN:  And, truly, in terms of time

       6      frame, I can't speak to that.

       7             So I won't be speaking to individual

       8      complaints that we've -- that we have received.

       9             SENATOR KAVANAGH:  Yeah, I mean, I'm not --

      10      maybe we'll get there, but I'm not actually asking

      11      you about the details of any individual complaints.

      12             Just, has NRT or your affiliates received

      13      complaints about any of your agents beyond --

      14      outside of this "Newsday" investigation, have you

      15      received any complaints of violations of

      16      fair-housing laws and standards?

      17             M. RYAN GORMAN:  We as a company certainly

      18      received complaints in -- of all manner.

      19             So I -- forgive me if I won't get into

      20      details about fair housing, or what was potentially

      21      a component of a larger complaint regarding fair

      22      housing.

      23             But we have certainly received complaints.

      24             SENATOR KAVANAGH:  Received complaints about

      25      fair-housing issues?







                                                                   154
       1             M. RYAN GORMAN:  I think it's fair to say

       2      that the scope our company, that's likely been the

       3      case.

       4             I can't speak individually to it.

       5             I did attest to answer honestly, and I cannot

       6      answer this question [indiscernible

       7      cross-talking] --

       8             SENATOR KAVANAGH:  No, I appreciate that.

       9             And I would -- I'm certainly not asking to

      10      you attest to things that you're not familiar with.

      11             Is there somebody in your company who would

      12      know the extent to which the company has received

      13      that kind of complaint?

      14             M. RYAN GORMAN:  Well, certainly, we take

      15      complaints extremely seriously, both in the action

      16      we take and the records we keep.

      17             SENATOR KAVANAGH:  But is there some person

      18      in your company that you -- I mean, if you wanted to

      19      find out that information, presumably there's

      20      somebody you would ask --

      21             M. RYAN GORMAN:  I can defer to our in-house

      22      counsel and the committee staff, if you'd like to

      23      follow up.

      24             SENATOR KAVANAGH:  Okay.

      25             Who -- just -- who is the in-house counsel?







                                                                   155
       1             M. RYAN GORMAN:  Depending upon the part of

       2      the company, in terms of realty, we have a

       3      relatively extensive legal staff.

       4             So, for instance, NRT, my legal counsel, a

       5      gentleman by the name of Ken Hoffert, is our general

       6      counsel at NRT.

       7             SENATOR KAVANAGH:  Okay.

       8             All right, thank you.

       9             Do you have a formal practice of

      10      investigating complaints about fair housing and

      11      other matters?

      12             M. RYAN GORMAN:  We have formal practices

      13      about complaints in general.

      14             We don't specify complaint type separately.

      15             But we have former -- formal policies

      16      regarding complaints, how they should be handled,

      17      how they should be followed up.

      18             SENATOR KAVANAGH:  Can you just explain a

      19      little bit about that, how that prac -- that policy

      20      and practice works?

      21             M. RYAN GORMAN:  Sure.

      22             In general, if a complaint is lodged, for

      23      instance, related to a real estate agent, we have an

      24      independent-contractor relations team, as well as a

      25      legal team, each of which would be involved.







                                                                   156
       1             At their discretion, and honoring whatever

       2      confidentiality is necessary for that -- that

       3      inquiry, they would pull in the operations and

       4      brokerage team as well, as necessary, to ascertain

       5      additional facts, and then to either determine or

       6      recommend what action should be taken from there.

       7             SENATOR KAVANAGH:  And are all -- all -- any

       8      complaint is -- is the subject of at least a

       9      preliminary investigation?

      10             M. RYAN GORMAN:  The term "any" being very

      11      broad, I can tell you we have a robust complaint

      12      procedure.

      13             So, to my knowledge, any complaint that

      14      appears to be a legitimate complaint of any kind, we

      15      take very seriously, yes.

      16             SENATOR KAVANAGH:  Do you have any -- is

      17      there anything that you can say today about -- from

      18      your knowledge, about results of investigations,

      19      actions taken by the company, with respect to

      20      complaints about fair-housing matters?

      21             M. RYAN GORMAN:  Sure.

      22             We've -- we've absolutely taken action

      23      related to complaints, and into the broad scope of

      24      ethics, for instance, which I would say this is, you

      25      know, under the broad category of "ethics," we have







                                                                   157
       1      taken action, from training, additional explanation

       2      and clarification, to separation, whether they be

       3      employees or independent contractors, to additional

       4      action even beyond that.

       5             SENATOR KAVANAGH:  So just to be clear, you

       6      would -- when you say "separation," you're talking

       7      about terminating the relationship between your

       8      companies and a given agent, in response to a

       9      fair-housing complaint, if that would be one

      10      potential consequence if the complaint were

      11      substantiated?

      12             M. RYAN GORMAN:  As a potential consequence.

      13             So employees, of course, there would be

      14      termination.

      15             With regard to independent contractors, it

      16      would be disassociation.

      17             SENATOR KAVANAGH:  Can you just answer, do

      18      they have -- has -- have you, or -- to your

      19      knowledge, has your company, or any of your

      20      affiliated companies, actually terminated the

      21      relationship or ended the relationship with an agent

      22      based a fair-housing complaint?

      23             M. RYAN GORMAN:  I won't be speaking

      24      specifically to that.

      25             I'm happy to follow up and, you know, field







                                                                   158
       1      inquiries with the attorney general and others.  But

       2      I won't be speaking directly to actions we've taken

       3      with regard to specific complaints.

       4             SENATOR KAVANAGH:  Okay, I'm not asking for

       5      the action of a specific [indiscernible].

       6             I'm asking whether your company has taken

       7      that action in -- in any circumstance, that you're

       8      aware of, without -- without asking you for the

       9      specific agent involved, or even the specific

      10      affiliate company involved?

      11             M. RYAN GORMAN:  Yeah, so speaking more

      12      generally, in an attempt to be as helpful as I can,

      13      with regard to ethics complaints, we certainly have

      14      terminated relationships with both employees and

      15      independent contractors.

      16             SENATOR KAVANAGH:  Thank you.  That's

      17      helpful.

      18             Have you ever conducted paired testing, or

      19      any other kind of proactive program, to determine

      20      whether employees are, and agents are, complying

      21      with fair-housing law?

      22             M. RYAN GORMAN:  So I've been in this

      23      position since January of last year.  And over that

      24      time, no, I am not aware of any.

      25             I believe, though -- again, I want to attest







                                                                   159
       1      honestly -- we as a company have in the past.

       2             But since I've been in this position since

       3      January of last year, no, we have not.

       4             SENATOR KAVANAGH:  Okay, so you believe --

       5      you believe that your companies have actually --

       6      have done that kind of proactive testing at some

       7      point, but not since you've been there

       8      [indiscernible] -- you said -- when you say "last

       9      January," you mean January of two thousand and...?

      10             M. RYAN GORMAN:  '18.

      11             SENATOR KAVANAGH:  -- eighteen?

      12             M. RYAN GORMAN:  Yes.

      13             SENATOR KAVANAGH:  Okay, so in the last

      14      couple years.

      15             M. RYAN GORMAN:  Yes.

      16             SENATOR KAVANAGH:  Who in the company would

      17      be familiar with that longer history of that

      18      practice within the company?

      19             M. RYAN GORMAN:  We can follow up.

      20             Like, truly, I do not know.

      21             We are -- our company is of considerable

      22      scope, so we would have to do some work on that.

      23             But, truly, I'd have to follow up.

      24             SENATOR KAVANAGH:  Okay, but you're willing

      25      to provide this com -- these committees with







                                                                   160
       1      additional information about that practice in the

       2      past?

       3             M. RYAN GORMAN:  I'm willing to have

       4      additional conversation with the Committee staff

       5      about that.

       6             I want to be just very cognizant of the

       7      additional investigations that are going on, with

       8      the attorney general, as well as LIBOR, and others,

       9      and make sure we take the appropriate steps.

      10             SENATOR KAVANAGH:  Okay.  Thank you.

      11             Moving on to a new topic, how many offices do

      12      you and your affiliates have on -- in -- on

      13      Long Island?

      14             M. RYAN GORMAN:  In terms of the

      15      owned-brokerage operation, I believe it's 25 offices

      16      on -- that would qualify Long Island-specific.

      17             And I do not as have the total affiliate

      18      count, meaning the franchisee count, on Long Island

      19      with me today.

      20             SENATOR KAVANAGH:  And how do you -- how does

      21      NRT and your affiliated companies choose office

      22      locations?

      23             M. RYAN GORMAN:  So NRT -- I'll take the two

      24      separately, if you don't mind.

      25             NRT being the owned-brokerage segment, we







                                                                   161
       1      have history of growth through acquisitions.  So,

       2      for the most part, we have not opened new offices,

       3      but, rather, acquired offices over time.

       4             The most typical path would be for a

       5      broker-owner -- an existing broker-owner to reach

       6      out to us, to seek to be acquired, and for to us

       7      evaluate that opportunity, and then decide whether

       8      or not to move forward with the acquisition.

       9             On the franchise side, the non-company-owned

      10      side of the business, similarly, it would be an

      11      existing broker-owner, typically.

      12             We, typically, are not starting new

      13      brokerages.  We're, typically, a -- what we would

      14      refer to as a "conversion franchise."

      15             An existing broker-owner reaching out and

      16      wanting to explore the opportunity with one of our

      17      franchise brands, and then for them to meet with our

      18      team, explore the brand, and decide whether or not

      19      they want to sign up for a franchise.

      20             SENATOR KAVANAGH:  And just -- just to be a

      21      little more specific, what factors determine whether

      22      you choose to make an acquisition?

      23             M. RYAN GORMAN:  Well --

      24             SENATOR KAVANAGH:  To affiliate.

      25             M. RYAN GORMAN:   -- sure.







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       1             A lot of factors go into determining whether

       2      or not to make an acquisition, including our

       3      existing market presence, and what market presence

       4      we desire.

       5             But the financial profile and operations of

       6      the company being one of the most determinative.

       7             SENATOR KAVANAGH:  Just any other factors

       8      that you'd like to mention at this stage?

       9             M. RYAN GORMAN:  Myriad factors, but, no, I'd

      10      probably not like to list them all.

      11             SENATOR KAVANAGH:  Okay.

      12             So in terms of -- you said that, you know,

      13      the market -- the market -- your current market

      14      presence, and the markets you'd like to be in, do

      15      your off -- do you have any other office in

      16      communities where most residents are individuals --

      17      people of color?

      18             M. RYAN GORMAN:  I honestly don't know the

      19      racial breakdown of all the communities of our

      20      offices.  It's not something we've ever -- I've ever

      21      seen.

      22             SENATOR KAVANAGH:  Okay.  So I'm going to

      23      list a few communities that are mentioned

      24      specifically in the "Newsday" article.

      25             Just, if you -- if you have -- if you can







                                                                   163
       1      say, yes or no, whether you have a presence in those

       2      communities, that would be appreciated.

       3             So, Fremont?

       4             M. RYAN GORMAN:  Forgive me, my answer is

       5      going to be frustrating here.

       6             I don't know all of the locations of our

       7      affiliates, for sure.

       8             We can definitely follow up on that.  And,

       9      obviously, feel free to list them.

      10             But we can follow up with answers about where

      11      our affiliates are.

      12             SENATOR KAVANAGH:  Okay.

      13             So I just -- I -- we would ask about Fremont,

      14      Elmont, Hempstead, Brentwood, Central Islip,

      15      Union Dale, Roosevelt, and Wyandanch.

      16             OFF-CAMERA SPEAKER:  Wyandanch (correcting

      17      pronunciation).

      18             SENATOR KAVANAGH:  Wyandanch.  Forgive me.

      19             I'm originally from Staten Island, not

      20      Long Island, and I'm a Manhattan boy now.

      21             But, Wyandanch.  Thank you.

      22             So, again, just to -- just to make a point,

      23      "Newsday" noted that there was a lack of

      24      larger-scale brokerage businesses in the market in

      25      any of the communities in New York that -- in







                                                                   164
       1      Long Island that are predominantly minority.  And

       2      that those are serviced by smaller localized

       3      brokers, and then, your company, and other

       4      companies, have chosen not to locate there.

       5             M. RYAN GORMAN:  Chose not to locate offices

       6      there [indiscernible cross-talking] --

       7             SENATOR KAVANAGH:  Or locate office

       8      [indiscernible cross-talking] --

       9             M. RYAN GORMAN:  -- [indiscernible.]

      10             The function of a real estate office today,

      11      of course, being, for the most part, to service the

      12      business of the real estate agent.

      13             Consumers, typically, not spending much time

      14      in our real estate offices.  And there being fewer

      15      of those offices every day, as agents are more

      16      mobile, and as consumers prefer to interact with our

      17      agents when shopping with home -- for homes, or

      18      working in those agents' homes as well.

      19             SENATOR KAVANAGH:  But the off -- yeah, but

      20      the offices do serve a role within your business of

      21      providing access to your services?

      22             M. RYAN GORMAN:  The -- in terms of

      23      consumers?

      24             SENATOR KAVANAGH:  Yes.

      25             M. RYAN GORMAN:  Yes.







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       1             So there was point in time where consumers

       2      would definitely avail themselves of an agent's

       3      services, primarily through the sales office.

       4             That's definitely not the case today.

       5             But they are a component of a larger service

       6      profile, yeah.

       7             SENATOR KAVANAGH:  Yeah, but you're still

       8      provide -- I mean, so if I, for example, were to

       9      walk down the main street of West Hampton, and to

      10      note that there are, you know, five or six brokerage

      11      offices with storefronts there, I might conclude

      12      that those companies -- and I don't know whether any

      13      of your affiliates -- but I might conclude those

      14      companies believe that that's a place where there

      15      might be customers who are looking for services, and

      16      want to avail themselves of a kind of an in-person

      17      meeting in an office.

      18             Is that a fair assumption?

      19             M. RYAN GORMAN:  It's certainly a fair

      20      assumption the way the industry worked historically,

      21      more so than today.

      22             So, for instance, my decision on whether or

      23      not to relocate an office, or shrink an office, or,

      24      frankly, today, to consolidate an office, relates

      25      much more to our real estate agent's work process,







                                                                   166
       1      and whether they work more in an office and prefer a

       2      location as opposed to work more remotely.

       3             SENATOR KAVANAGH:  Yeah, and I'm less

       4      concerned about the difference between working from

       5      home and working from the office, so much as the

       6      decision about locating particular offices in

       7      particular places.

       8             So, again, if you have -- you're saying, if

       9      you have agents that want to work in particular

      10      communities, you're more likely to have an office

      11      there.

      12             And you're -- I mean [indiscernible

      13      cross-talking] --

      14             M. RYAN GORMAN:  [Indiscernible

      15      cross-talking] --

      16             SENATOR KAVANAGH:  -- and you're -- I mean,

      17      wherever this industry is going, you have dozens of

      18      offices currently, so one presumes they're serving

      19      some purpose?

      20             M. RYAN GORMAN:  Yep.

      21             Yes, sir.

      22             SENATOR KAVANAGH:  Okay.

      23             What steps, if any, do you take to promote

      24      diversity among the agents working for you?

      25             M. RYAN GORMAN:  Considerable, I should note,







                                                                   167
       1      first, we don't know the racial profile of either

       2      our employees or our agents.

       3             It is a voluntary self-identification process

       4      that we honor with regard to both.

       5             The National Association of Realtors has done

       6      some, I assume, mostly survey-generated work, that

       7      shows that, in general, the profile of the average

       8      real estate agent today lags behind the increasing

       9      diversity of the country.

      10             And I would argue, given our size, we

      11      probably are somewhat akin to the National

      12      Association of Realtors' profile.

      13             We believe that that's a -- behind where it

      14      needs to be, and we have a significant imperative to

      15      grow that.

      16             So some of the ways that we work, are

      17      partnering with industry organizations that focus

      18      specifically on groups that are underrepresented in

      19      our industry, not solely on racial lines, but there

      20      certainly are significant groups that do so.

      21             For instance, the National Association of

      22      Real Estate Professionals, National Association of

      23      Real Estate Brokers, NAGLREP, AREEA, there are a

      24      number of groups that focus on these groups.

      25             We participate very close with them.







                                                                   168
       1             I personally participate very closely with

       2      them.

       3             But we, as a company, sponsor events,

       4      participate in events, and bike groups, and partner

       5      with them on things, like, our Agents of Change

       6      initiatives, which are more locally based, but also

       7      partnered nationally at our national and global

       8      conventions as well.

       9             So, it's certainly an imperative for us.

      10             And we'll be doing, you know, more tomorrow

      11      than we did yesterday, and, hopefully, more the day

      12      after that.

      13             But we have considerable work to do as an

      14      industry and as a large industry player.

      15             SENATOR KAVANAGH:  Can you just quantify, or

      16      at least give us a sense, of how far you think that

      17      the industry is from being representative

      18      [indiscernible cross-talking] --

      19             M. RYAN GORMAN:  I can't.

      20             I mean, the only thing -- honestly, the only

      21      thing that I've ever seen, to go on, is the National

      22      Association of Realtors' member profile.

      23             And I -- while I don't have that with me,

      24      that is -- that is readily available, and we can

      25      certainly follow up with it.







                                                                   169
       1             It -- I -- I can't say the percentage, sort

       2      of, difference between the population served and the

       3      population of the sales associates.

       4             But I do believe it lags significantly across

       5      a few major groups that I can recall, in terms of

       6      African-American real estate agents, Hispanic real

       7      estate agents, and Asian real estate agents.

       8             SENATOR KAVANAGH:  Thank you.

       9             So in your testimony you stated that you are,

      10      quote, conducting your own in -- NRT is conducting

      11      its own inquiry with the assistance of an

      12      independent third party.

      13             Can you, with -- again, without getting into

      14      the specific results or the specific findings about

      15      agents, can you talk about -- a little bit about

      16      what the inquiry would entail?

      17             M. RYAN GORMAN:  So without speaking directly

      18      about these, I can say that, one, I and we are

      19      taking extremely seriously the use of, for instance,

      20      independent third parties, to ensure that we're

      21      doing so in as clear-eyed and unbiased way as

      22      possible, so that we can then determine what action

      23      we need to take.

      24             So while we're taking this event seriously,

      25      and the agent's profile in this piece very







                                                                   170
       1      seriously, there's a much larger opportunity we see

       2      here, to improve as a company and as an industry.

       3             And so I'm quite focused on the actions that

       4      would then flow from this, to try to change the

       5      outcomes in the future.

       6             SENATOR KAVANAGH:  And when -- upon

       7      conclusion of that investigation, would you be

       8      willing to share the results with these committees?

       9             M. RYAN GORMAN:  I'd have to follow up on

      10      that.

      11             Again, I -- I -- I am unlikely to want to

      12      share details of the internal investigations, for a

      13      variety of reasons, including the attorney general's

      14      inquiry.  But -- but we can follow up.

      15             SENATOR KAVANAGH:  Okay.

      16             I will note, we will be hearing from the

      17      attorney general's office later today about this

      18      matter as well.

      19             Just -- Mr. Freiberg testified earlier about

      20      the long and profoundly disturbing history of the

      21      real estate industry affirmatively promoting

      22      discrimination and exclusion as a matter of official

      23      policy and practice.

      24             Are you familiar with that history?

      25             M. RYAN GORMAN:  I think the level







                                                                   171
       1      familiarity in this room probably varies

       2      significantly.

       3             I don't know where I am in that spectrum.

       4             I certainly have a relatively deep awareness

       5      of our industry's history.

       6             SENATOR KAVANAGH:  Okay.

       7             You testified that you are -- have been

       8      designated among the world's most ethical companies.

       9             That's quite a designation.

      10             And you're, obviously, a major participant in

      11      this industry.

      12             Do you believe that NRT and your affiliates

      13      an ethical obligation to affirmatively promote

      14      inclusion beyond minimal standards set by federal,

      15      state, and local fair-housing laws?

      16             M. RYAN GORMAN:  Yes.

      17             SENATOR KAVANAGH:  Okay.

      18             And -- so that obligation would go beyond

      19      being neutral with respect to race and ethnicity and

      20      other protected classes, but, you know,

      21      affirmatively working to ensure that our communities

      22      in places like Long Island and elsewhere are

      23      inclusive?

      24             M. RYAN GORMAN:  Yes, absolutely.

      25             SENATOR KAVANAGH:  Okay.







                                                                   172
       1             Is -- just -- you've testified for a while,

       2      and I do want to allow my colleagues to -- to ask

       3      questions.

       4             Are there just any other activities or steps

       5      that you haven't mentioned, that you'd like to

       6      share, that are intended to promote that -- to

       7      comply with that ethical obligation?

       8             M. RYAN GORMAN:  Well, I think the -- one of

       9      the best ways to comply with the ethical obligation,

      10      is to ensure that our real estate agent sales force

      11      is diverse and reflective of the communities that

      12      they serve.

      13             The vast majority of consumers today select

      14      their real estate agent based upon personal

      15      relationships, as opposed to, you know, overtly

      16      seeking them outside of their, sort of, you know,

      17      sphere of friends and family and recommendations.

      18             So, one of the best ways to make sure that

      19      we're serving the full community is to make sure

      20      that we reflect the full community.

      21             So that is where a great deal of our efforts

      22      are focused today, not just in our real estate

      23      sales, independent contractors, but also our

      24      employee population.

      25             We have considerable work that has been done,







                                                                   173
       1      and will be done, on both fronts, to make sure that

       2      we're making ourselves open and available to every

       3      community, and overtly and proactively trying to be

       4      a partner with communities, especially, that we

       5      think have been underserved to date.

       6             SENATOR KAVANAGH:  Okay, so thank you.

       7             And I'm going to -- yeah, I'm going to -- I'm

       8      going to first defer to my colleague

       9      Senator Skoufis, and I know we'll have other

      10      senators with questions as well.

      11             SENATOR SKOUFIS:  Thank you.

      12             And thank you for your appearance this

      13      afternoon.

      14             My first question:  Did you or anyone you

      15      know within NRT direct or advise your real estate

      16      agents to not appear at this hearing today?

      17             M. RYAN GORMAN:  No.

      18             To not appear today, no.

      19             SENATOR SKOUFIS:  Okay.

      20             Would you describe the discrimination

      21      revealed in the "Newsday" investigation as

      22      systematic?

      23             M. RYAN GORMAN:  Based upon the percentages

      24      of the story, it certainly would appear to be

      25      pervasive, based upon the testing.







                                                                   174
       1             I don't know the definition necessarily of

       2      "systematic," but it certainly seems to be severely

       3      problematic, deeply concerning, and requiring

       4      urgency of action.

       5             SENATOR SKOUFIS:  Just to dig into that a

       6      little bit further, you know, unless one believes

       7      that 49 percent of people -- or, real estate agents,

       8      are racist or have unconscious bias, surely, this

       9      must be systematic, because that is the percentage

      10      of real estate agents here on Long Island in the

      11      "Newsday" expos� that discriminated against

      12      African-Americans.

      13             And so can you speak to how in the world

      14      49 percent of real estate agents have taken

      15      discriminatory actions against African-Americans

      16      here on Long Island?

      17             Clearly, this must be systematic.

      18             How did it get to that level here on

      19      Long Island?

      20             M. RYAN GORMAN:  Well, I can't speak to

      21      necessarily the percentages.

      22             I can speak to what action we think needs to

      23      be taken from here.

      24             This morning, for me, frankly, was, I spent

      25      listening, and learning, to some of the best







                                                                   175
       1      practices that are recommended by professionals who

       2      spent their careers focused on this matter.

       3             And it seems likes there's a lot of work for

       4      many to do.

       5             We as a company are certainly focused on

       6      taking action and raising, not just awareness, but

       7      understanding, of not just the law, but the spirit

       8      behind the law, and especially focusing on things

       9      like unconscious bias and the implications of

      10      actions.

      11             So that's where we'll be focusing our

      12      training efforts, our requirements, as we move

      13      forward, and our actions.

      14             SENATOR SKOUFIS:  I appreciate your focus on

      15      being prospective, and I think that's certainly an

      16      important element of this, for not only the industry

      17      and your company and affiliates, but, certainly,

      18      here in the Legislature as well.

      19             But I do think it is important to reflect

      20      upon how this is happening and how this happened.

      21             So I don't want to move on from this just

      22      quite yet.

      23             Do you believe that real estate agents, among

      24      themselves, communicate about avoiding the word

      25      "steering" and using this language instead?







                                                                   176
       1             Do you believe that even directives come down

       2      from executives, or, you know, higher-ups,

       3      management, to their real estate agents, Here's how

       4      you avoid fair-housing laws?

       5             To reach 49 percent discriminatory --

       6      49 percent of real estate agents discriminating

       7      against African-Americans here on Long Island,

       8      clearly, you know, this is not a coincidence --

       9      right? -- where half of agents are doing,

      10      effectively, the same exact thing.

      11             Do you believe these practices are shared

      12      amongst one another, or are directed to agents?

      13             Can you speak to that?

      14             M. RYAN GORMAN:  So the portion of your

      15      question related to, for instance, directives,

      16      I believe I can speak to at least for our

      17      organization.

      18             So, I have no awareness of ever, ever, any

      19      directive of that nature occurring.

      20             And, certainly, if it did, we would treat it

      21      with the gravest of seriousness and take significant

      22      action.

      23             While we are one player, we are a large

      24      player.

      25             I don't know that that's reflective of the







                                                                   177
       1      larger population, but it's certainly reflective of

       2      us as a company.

       3             SENATOR SKOUFIS:  Do you believe that, at the

       4      agent level, these practices are shared amongst one

       5      another?

       6             M. RYAN GORMAN:  I honestly can't -- can't --

       7      can't speak to it.

       8             I think fair-housing training takes place.

       9             And as part of the story, there was an

      10      examination of the efficacy of fair-housing

      11      training, which appeared lacking, and in need of

      12      considerable attention.

      13             But I can't speak to what, you know, beyond

      14      that.

      15             SENATOR SKOUFIS:  Is it fair to say that,

      16      given that nearly half of agents discriminated in

      17      the "Newsday" expos�, that it's not a coincidence

      18      that this many agents are discriminating?

      19             That they're all, effectively, exhibiting

      20      some shared practices here, this is not a

      21      coincidence?

      22             M. RYAN GORMAN:  Well, it's certainly fair to

      23      say that this requires action.

      24             And if it were not pervasive, or were not

      25      concerning, it wouldn't require action.







                                                                   178
       1             So, I think it's very fair to say that this

       2      requires action beyond pinpoint action; but, rather,

       3      pervasive, probably, relatively sweeping, action.

       4             We as a company will certainly be looking

       5      into what we require broadly, not just in New York,

       6      but across the entire country, as we move forward.

       7             SENATOR SKOUFIS:  Do you believe that NRT

       8      and, quite frankly, the industry, owes an apology to

       9      people of color here on Long Island?

      10             M. RYAN GORMAN:  I honestly don't know what

      11      is owed.

      12             I can say what I personally will give, which

      13      is the deepest apology for not having done more.

      14             And the best apology I think I can give is

      15      doing more, and that's exactly what we're committed

      16      to doing.

      17             SENATOR SKOUFIS:  Thank you very much.

      18             SENATOR KAVANAGH:  I think Senator Thomas has

      19      some questions.

      20             SENATOR THOMAS:  I just have one question.

      21             We had panels prior to this.  You probably

      22      heard their testimony.

      23             They talked about needing testing of

      24      real estate agents.

      25             Do you agree or disagree with that?







                                                                   179
       1             M. RYAN GORMAN:  I believe any action that

       2      would prove to be effective in progressing the

       3      spirit and mission of the Fair Housing Act is

       4      something that should absolutely be considered.

       5             If the assumption is that, that testing is an

       6      effective means of doing so, which I realize was

       7      somewhat debated this morning, but, if it was viewed

       8      as effective, then we would fully support effective

       9      measures to progress the mission of the Fair Housing

      10      Act.

      11             SENATOR THOMAS:  Do you believe that state

      12      agencies have not done enough to stop the

      13      discrimination and segregation of localities?

      14             M. RYAN GORMAN:  I think what was uncovered

      15      in the "Newsday" investigation was severely

      16      disappointing.

      17             Who is specifically to blame, or what group

      18      and groups are to blame for that, I can't say.

      19             I can say that it would appear, from the

      20      testimony earlier of experts, far more expert than

      21      I am in terms of fair housing, they appear to have a

      22      strong belief that it requires State action to

      23      really get the kind of outcomes that I think we all

      24      seek.

      25             SENATOR THOMAS:  But in your opinion, do you







                                                                   180
       1      believe that state agencies have failed communities

       2      when it comes to this?

       3             M. RYAN GORMAN:  I believe the "Newsday"

       4      investigation demonstrated that we as a society have

       5      failed.

       6             I personally don't know which components of

       7      those.

       8             I can say we, as a company, will do more, for

       9      sure.  And we'll certainly support the State in

      10      exploring what more the State should -- should and

      11      could do.

      12             SENATOR THOMAS:  All right.  Thank you.

      13             SENATOR KAVANAGH:  Senator Kaplan.

      14             SENATOR KAPLAN:  Thank you.

      15             So, first of all, I want to thank everyone

      16      here for their testimony today.

      17             As it's mentioned, it is a big problem, and

      18      there's no single way to solve this.  So we really

      19      have to look at this in many different ways, and all

      20      different, really, stakeholders to take action on

      21      this.

      22             You talked about, a little bit, that your

      23      affiliates and your agents come -- when they come

      24      on board, they sign a pledge; a fair housing pledge.

      25             How about, possibly, would you consider,







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       1      adding a new policy that they would sign this pledge

       2      every year?

       3             Because just signing it once when they come

       4      on board, and then it goes on file, and just stored

       5      away somewhere, maybe is not enough.  But possibly

       6      doing this every year brings a certain amount of

       7      reminder how important this commitment is, and bring

       8      more awareness.

       9             M. RYAN GORMAN:  It's certainly one of the

      10      things that we'll be considering.

      11             So what we want is a really effective outcome

      12      in raising not just awareness, but understanding.

      13             Awareness may, in fact, even be high, but

      14      understanding an action may still be lacking.

      15             And so we'll be exploring additional training

      16      requirements, additional attestation requirements,

      17      as part of that.

      18             What specifically we'll land on, I cannot

      19      say, but it's certainly part of that exploration.

      20             SENATOR KAPLAN:  And you talk about that they

      21      have to go through this training every two years.

      22             Possibly, maybe, if it's a three-hour

      23      training, maybe this could be down a yearly basis

      24      again.

      25             Something that could --







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       1             M. RYAN GORMAN:  It's possible.

       2             I think the -- I think it's a very healthy

       3      debate about what should be required of licensees,

       4      and over what time period, as well as, in that

       5      portfolio of requirements, what weight fair housing

       6      should have, as well as, some of the components of

       7      fair housing are mentioned by some of the earlier --

       8      the earlier witnesses providing testimony, that it

       9      may be not just awareness of law, but, really, the

      10      underlying, you know, spirit behind the law, the

      11      biases, the unconscious biases, and stereotypes.

      12             SENATOR KAPLAN:  Thank you.

      13             SENATOR KAVANAGH:  Senator Kaminsky.

      14             SENATOR KAMINSKY:  Thank you.

      15             So we're being tough, and are going to

      16      continue to be tough, on you today.

      17             But it's shameful that you are the only

      18      person who showed up out of the myriad companies and

      19      agents that were requested to be here today.

      20             And in a moment Chairman Skoufis is going to

      21      opine on that.

      22             But, for now, I just want to state for the

      23      record, that it's completely shameful that, at a

      24      table of, you know, a number of seats that are

      25      empty, you're sitting there with no one surrounding







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       1      you.

       2             No one bothered to come.

       3             Everyone, obviously, thought it was their

       4      duty to either look out for themselves or to ignore

       5      this completely, and that is just unacceptable.

       6             That being said, my understanding is that, we

       7      are not the only body asking questions, and there

       8      are other enforcement agencies that are

       9      investigating this as well.

      10             Is that your understanding?

      11             M. RYAN GORMAN:  So right now I'm aware of

      12      the attorney general, as well as the Long Island

      13      Board of Realtors.

      14             If there are others, I'm not yet aware of

      15      those.

      16             SENATOR KAMINSKY:  Okay.  And have you

      17      received subpoenas or search warrants from the

      18      attorney general's office?

      19             M. RYAN GORMAN:  I know we've received

      20      communication from the attorney general's office.

      21             What specifically that communication

      22      included, I'm -- I'm not certain.

      23             SENATOR KAMINSKY:  Okay, but you haven't, for

      24      example, seen agents with, like, raid jackets,

      25      pulling computers out of your office?







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       1             M. RYAN GORMAN:  I have not; I have not seen

       2      that, no.

       3             SENATOR KAMINSKY:  Okay.

       4             SENATOR KAVANAGH:  You would have noticed

       5      that.

       6             M. RYAN GORMAN:  I probably would have

       7      noticed that, yes.

       8                [Laughter.]

       9             SENATOR KAMINSKY:  And is it your intention,

      10      or is it your current position, to be complying or

      11      cooperating with the attorney general's

      12      investigation?

      13             M. RYAN GORMAN:  Absolutely.  We have every

      14      intention of cooperating, to the extent that we can,

      15      with all of the work that's being done on this

      16      front.

      17             And that's inclusive of third-party

      18      organizations that are just working to improve the

      19      outcomes in general.

      20             SENATOR KAMINSKY:  What does that mean?

      21             M. RYAN GORMAN:  So, for instance, there's

      22      a -- there are other groups, including industry

      23      trade groups, that we work with, who are taking this

      24      as an opportunity to shine a light on a problem that

      25      needs attention.







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       1             SENATOR KAMINSKY:  What is -- what are the

       2      communications from your office to your employees

       3      about how to deal with investigators?

       4             M. RYAN GORMAN:  Any investigation that came

       5      in would likely be leveled up to our -- likely our

       6      legal team, for guidance on how and who should

       7      respond.

       8             SENATOR KAMINSKY:  And is your legal team

       9      telling the attorney general's office not to

      10      interview employees without their attorneys present?

      11             M. RYAN GORMAN:  I'm not certain the attorney

      12      general's office has asked questions to which that

      13      would even be a viable answer.

      14             So I don't know.

      15             SENATOR KAMINSKY:  And are you providing

      16      attorneys for -- private attorneys for clients;

      17      like, are you funding their defense?

      18             M. RYAN GORMAN:  So any -- any employee or

      19      independent contractor associated with our company

      20      is entitled to defense, depending upon the reason

      21      for the inquiry.

      22             As you can imagine, there are things that

      23      live outside of that entitlement, depending upon the

      24      actions that the individuals took.

      25             SENATOR KAMINSKY:  Let me ask you about your







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       1      reaction to the videos we saw today, and the

       2      evidence, overall, documented in the "Newsday"

       3      story.

       4             What was -- what was your reaction?

       5             Were you appalled? shocked? stunned? -- any

       6      of those things?

       7             M. RYAN GORMAN:  I'm here today because

       8      I believe that the "Newsday" story shone a light on

       9      serious, serious, issues that we have, that are not,

      10      to the early discussion, individual in nature, but

      11      are larger and more pervasive, and require more

      12      serious action.

      13             We as a company, regardless of this hearing

      14      or other procedures, would be taking action based

      15      upon merely what we learned in the "Newsday" story.

      16             But certainly, now, this gives us an

      17      opportunity to hear from other experts, and partner

      18      with other organizations who can lift up best

      19      practices, of which, perhaps, I wasn't aware, that

      20      we can then implement not just locally, but

      21      nationally.

      22             SENATOR KAMINSKY:  Okay.  And the

      23      compensation structure for the agents, like the

      24      agents we saw in the video, is based on, I assume,

      25      some form of, "the more you sell, the better you







                                                                   187
       1      do"?

       2             M. RYAN GORMAN:  So an individual agent is

       3      compensated -- an individual independent-contractor

       4      sales associate, typically --

       5             I can speak to our organization, and this is

       6      a good proxy for the industry.

       7             -- on a per-transaction basis.

       8             That transaction closes.

       9             The consumers involved in the transaction

      10      paid a commission.

      11             That commission is paid to a real estate

      12      brokerage.  And then that commission is split or

      13      shared between the real estate agent, who typically

      14      receives the majority of that commission, and the

      15      real estate brokerage.

      16             SENATOR KAMINSKY:  So that's a long way of

      17      saying "yes"?

      18             M. RYAN GORMAN:  Well, your question was,

      19      I think, more about the progressive nature of it.

      20             It's a transaction-by-transaction basis.

      21             SENATOR KAMINSKY:  Okay.  But if you're an

      22      agent who has more transactions, you're -- you're --

      23      you're -- you receive --

      24             M. RYAN GORMAN:  Oh, certainly --

      25             SENATOR KAMINSKY:  -- a more lucrative pay?







                                                                   188
       1             M. RYAN GORMAN:  -- yes.  All compensation is

       2      per transaction.

       3             SENATOR KAMINSKY:  And is there any

       4      compensation -- is there any measure of

       5      compensation, without your company, for agents who

       6      either act more ethically than other agents, or work

       7      toward more inclusive practices, or anything other

       8      than raw sales factored into it?

       9             M. RYAN GORMAN:  No.  The

      10      independent-contractor relationship with the sales

      11      associate, we honor that in all its many forms.

      12             In other words, the compensation is clear:

      13             It's based upon their work, and we have

      14      supervisory obligations.  But it is their work.

      15             And so when they -- when they conduct their

      16      business and close the transaction, they're entitled

      17      to the compensation that was in the original

      18      agreement with them.

      19             There's not other forms of, sort of, to your

      20      point, the valuation, or more subjective analysis,

      21      that would adjust their compensation.

      22             SENATOR KAMINSKY:  Does your company have

      23      like corporate good-citizen requirements, like,

      24      doing things in the community?  Showing up to -- you

      25      know, I know sometimes you'll see a whole







                                                                   189
       1      community -- a whole company wearing the same

       2      T-shirts, cleaning up a given area.

       3             They must have --

       4             M. RYAN GORMAN:  Sure.

       5             SENATOR KAMINSKY:  -- some type of thing they

       6      need to check the box on.

       7             Like, where do you go?

       8             M. RYAN GORMAN:  Oh, well, we certainly have

       9      no "check the box," we have no requirement.

      10             We are extensively involved in our

      11      communities.

      12             I think, most likely, many of you have seen

      13      us in your communities.

      14             So the very practice of real estate is all

      15      about communities.  And so it's a large part of

      16      [indiscernible cross-talking] --

      17             SENATOR KAMINSKY:  Well, I think we see today

      18      it's all about some communities.

      19             M. RYAN GORMAN:  So -- you know,

      20      unfortunately, we are examining some unfortunate

      21      elements of the work.

      22             But there is a lot of work, that, hopefully,

      23      all of you have taken advantage of at some point in

      24      time, that our real estate agents do in building

      25      their communities, shaping their communities.







                                                                   190
       1             Well outside of the work that they do,

       2      they're typically involved in community

       3      organizations, community work, philanthropic and

       4      voluntary work, throughout the world.

       5             It's something we support very strongly.

       6             SENATOR KAMINSKY:  Okay.  Can we have a

       7      commitment to you today, that those who engage in

       8      these discriminatory processes will be held

       9      accountable, and that you will have a way, going

      10      forward, to ensure compliance with best ethical

      11      practices, going forward?

      12             M. RYAN GORMAN:  So we stand firmly on the

      13      side of ethics, firmly on the side of compliance; we

      14      always have.

      15             What is true today, after reviewing some of

      16      the "Newsday" stories and videos, that we can,

      17      should, and will do more, very specifically, and

      18      very soon.

      19             SENATOR KAMINSKY:  Hey, look, in all

      20      fairness, before I conclude, I think I would say --

      21      I would underscore that a lot more than you have in

      22      a calm, cool fashion.

      23             But, clearly, there's a lot going on in your

      24      company that you guys have no idea about, that is

      25      extremely troubling, and that is obviously occurring







                                                                   191
       1      far more than the random examples that happen to be

       2      test and documented.

       3             So I would urge you guys to turn everything

       4      upside down to try to get this thing in order.

       5             M. RYAN GORMAN:  Absolutely, it's an

       6      opportunity for us to improve dramatically as a

       7      company and industry.

       8             SENATOR KAVANAGH:  Thank you,

       9      Senator Kaminsky.

      10             Senator Liu.

      11             SENATOR LIU:  Well, thank you,

      12      Mr. Chairman.

      13             And I want to thank Senator Kaminsky for

      14      being kind and generous, which he is not always kind

      15      and generous.

      16             You should hear him behind closed doors.

      17             And you may actually still have the chance to

      18      do so.

      19             But, you know, I -- earlier, I think you

      20      said, you know, you weren't sure if it was

      21      systematic, but certainly be -- it certainly seems

      22      to be a pervasive problem, as opposed to an isolated

      23      incident, or a couple of isolated incidents.

      24             I mean, I imagine that the videos you saw

      25      probably made you cringe a little bit, even though







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       1      you were kind of cool on the exterior?

       2             Inside you were, like, cringing, trying to

       3      hide somewhere?

       4             It was embarrassing.

       5             Right?

       6             I certainly would be embarrassed if I was the

       7      president and chief executive officer, and I saw my

       8      employees conduct themselves this way.

       9             M. RYAN GORMAN:  As an individual, and as an

      10      industry, this is embarrassing, and requires,

      11      obviously, urgent action.

      12             SENATOR LIU:  And so these -- these

      13      individuals, they are facing sanctions; legal

      14      sanctions? other sanctions by your company?

      15             M. RYAN GORMAN:  So I can't speak to

      16      individual --

      17             SENATOR LIU:  I know, I know, you're taking

      18      the Fifth on pretty much everything.

      19             However, my question is, like:

      20             You say -- say one of these -- these agents

      21      has -- has been doing this for a long time.  Over

      22      the years, even the last few years, they've

      23      generated a number of sales.  You know, they

      24      probably get half their commiss -- half of the

      25      commission, and the company gets half the







                                                                   193
       1      commission.

       2             So if this person gets fired by your company

       3      or faces other legal sanctions, you know, what kind

       4      of penalties will your company face?

       5             Because you've already taken at least tens of

       6      thousands of dollars of commissions generated by

       7      that person who is guilty of this wrongdoing.

       8             Does the company face any kind of penalty?

       9             M. RYAN GORMAN:  If you could clarify the

      10      question, penalty of what nature?

      11             SENATOR LIU:  Okay, well, I mean, I --

      12      I think that your company will fire some of these

      13      employees.

      14             That's just me.  I don't have to take the

      15      Fifth here.

      16             But I think that's what -- I think that's

      17      what you will probably have to do, even just to

      18      cover yourselves.

      19             But say that employee is fired.

      20             They've already generated huge amounts of

      21      commissions based on these, to put it kindly,

      22      unsavory practices.

      23             What consequence is there to NRT once this

      24      person is fired, other than you lose potential

      25      revenue from this agent that you probably could







                                                                   194
       1      replace with other agents?

       2             Is there any consequence to the company?

       3             M. RYAN GORMAN:  So I can say a decision

       4      related to an independent-contractor sales

       5      associate, continuing to be affiliated with our

       6      company, when I'm evaluating, for instance, an

       7      ethical issue under the broad category of "ethical

       8      issue," I do not take into account the productivity

       9      of that individual agent.

      10             We take into account the actions that were

      11      taken, and whether or not we need to take actions as

      12      a result.

      13             SENATOR LIU:  I mean -- all right.

      14             Well, you know what?

      15             To be fair to you, Mr. Gorman, you said

      16      earlier that this is a problem that is not --

      17      really, not just the fault of your company, but

      18      society as a whole.

      19             We have failed on a number of fronts,

      20      including government, including state government,

      21      I'll be very frank with that.

      22             Which is why our Chairs have convened this

      23      hearing.

      24             We feel some responsibility to take action.

      25      Since we're legislators, we feel responsibility to







                                                                   195
       1      take some kind of legislative action.  Perhaps,

       2      strengthen the law to prevent this kind of thing

       3      from happening.  Perhaps, increased penalties on

       4      companies such as NRT.

       5             Because as I -- as I'm listening to all this

       6      stuff, and reading the report, it doesn't seem like

       7      NRT faces any kind of consequence, other than having

       8      to fire employees.

       9             The company has already reaped lots and lots

      10      of commission dollars from these said employees.

      11             And all the company has to do, going forward,

      12      is fire these employees, but NRT doesn't really face

      13      any kind penalties whatsoever, as far as I can tell.

      14             And so what that leads me to is that, you

      15      know, Senator Kaminsky was -- was kind to let you

      16      off the hook, allowing you to say that -- that,

      17      maybe, you know, the company didn't know of these

      18      practices.

      19             Unfortunately, sir, I'm not that generous.

      20             I think NRT has been fully aware of all these

      21      practices, and has, at best, been turning a blind

      22      eye to this, because, what consequence do you face

      23      when your employees do this?

      24             If you -- if someone gets caught, which they

      25      have, the company just fires those employees, faces







                                                                   196
       1      no other consequence.

       2             Maybe some reputational risk.

       3             But because you have such a large market

       4      share, it doesn't really do that much in terms of,

       5      finding new customers, finding new homebuyers and

       6      sellers.

       7             So I think that this is a much more pervasive

       8      problem.

       9             And -- and -- and the company, you know,

      10      I don't want to personalize this, Mr. Gorman, but

      11      I -- I have no doubt that executives at NRT are

      12      aware of what's happening, and turned a blind eye.

      13             And I think that, legislatively,

      14      Mr. Chairman, Mr. Chairman, and Mr. Chairman,

      15      we need to take some action.  We need some

      16      penalties.  We need some kind of consequence that

      17      will dissuade this kind of activity from happening

      18      in the first place.

      19             And executives, such as yourself -- and

      20      I don't mean to personalize this -- such as

      21      yourself, you need to face some kind of reality as

      22      to what's happening.  You cannot -- the penalty

      23      cannot only be limited to, embarrassment, or some

      24      minor reputational risk.

      25             There has to be some real penalty.







                                                                   197
       1             And -- and the last point I'll -- I'll --

       2      I'll make, since it's not really a question, is:

       3             You know, according to the letter that you

       4      responded to, to the Senate invitation with, it does

       5      appear that you're here on behalf of all the people

       6      who work for you.

       7             We sent invitations to many of the people

       8      affiliated with NRT, to testify, to tell us what's

       9      happening.

      10             Maybe -- maybe they didn't really know what

      11      was happening.

      12             But you're here, basically, in lieu of all of

      13      them.  I think those were your own words.

      14             Your testimony "will be in lieu of multiple

      15      company employees appearing to testify."

      16             So you're here to take the Fifth,

      17      collectively, on their behalf.

      18             And that's why you're in the hot seat, and

      19      you're going to continue to be in the hot seat, and

      20      we're going to need to take some legislative action.

      21             That is my opinion.

      22             Thank you.

      23             SENATOR KAVANAGH:  Thank you, Senator Liu.

      24             M. RYAN GORMAN:  I appreciate your comments.

      25             May I?







                                                                   198
       1             SENATOR KAVANAGH:  Yes.

       2             M. RYAN GORMAN:  So for clarification

       3      purposes, I want to make sure that we're on the same

       4      page.

       5             I am appearing in lieu of the employees that

       6      were noted.

       7             The independent-contractor sales associates,

       8      which I believe was part of the question, I am not

       9      here in lieu of anyone else, or anyone else in the

      10      industry, or franchisees; but, rather, our

      11      employees.

      12             I was not asked to appear.

      13             Some of our other employees, who report up

      14      through the organization to me, were asked to

      15      appear.

      16             I decided to appear.

      17             So just a clarification on that.

      18             I appreciate your hesitancy to make it

      19      personal, but I also appreciate that this issue is,

      20      in fact, personal.

      21             It's deeply personal for those who are

      22      negatively impacted by it, and they're taking it

      23      personally, as they should, and we all should, for

      24      sure.

      25             What more needs to be done?







                                                                   199
       1             I completely agree, vastly more needs to be

       2      done.

       3             I will say, on the record, and under oath,

       4      definitely, I, and to my knowledge, we, were not

       5      aware of practices of this nature, which

       6      I understand, it may not be in comporting with your

       7      perspective.

       8             But I can say that, had these been raised

       9      differently, or earlier, we would have taken action

      10      then, and it's action that we will be taking now.

      11             SENATOR LIU:  So something that happens

      12      pervasively within your company, you have no idea

      13      about?

      14             M. RYAN GORMAN:  So this particular issue

      15      that's highlighted, that does appear in the

      16      "Newsday" reporting to have been pervasive, is not

      17      unknown to the industry; however, the practices that

      18      we have undertaken to try and ensure that we are

      19      leading the industry in compliance with not just the

      20      letter, but the spirit of the law, do appear to have

      21      failed to be effective.

      22             And that is something that I realized from

      23      this reporting.

      24             SENATOR LIU:  So you're prob -- you're aware

      25      this probably happens in the rest of the industry,







                                                                   200
       1      but not in your company?

       2             M. RYAN GORMAN:  We certainly take action to

       3      ensure that we're leading.  We are a large company.

       4      That means we can have a significant impact on the

       5      industry.

       6             And that's what we intend to do.

       7             SENATOR LIU:  Okay.  Thank you.

       8             Thank you, Mr. Chair.

       9             SENATOR KAVANAGH:  Thank you, Senator Liu.

      10             Just for the record, I'll stipulate that

      11      Senator Kaminsky is not overly generous or nice

      12      person.

      13             SENATOR KAMINSKY:  I appreciate that.

      14             Next up, Senator Gaughran.

      15             SENATOR GAUGHRAN:  Thank you, Mr. Chairman.

      16             Some perspective buyers walk into a real

      17      estate office, one that's -- that, you know, your

      18      organization is affiliated to.

      19             So I presume buyers may have some

      20      preconceived notion that they would express of, you

      21      know, what they're looking for in terms of a house,

      22      size, et cetera.

      23             Somebody comes in from out of town.

      24             Are there any standard practices in terms of

      25      questions that an agent would ask a buyer?







                                                                   201
       1             Like, I presume you would ask them size of a

       2      house, something about property?

       3             M. RYAN GORMAN:  Yeah, so every agent will

       4      have their practice, but there are many checklists,

       5      for lack of a better term, that an agent might walk

       6      through with a prospective buyer.

       7             SENATOR GAUGHRAN:  So what would some of the

       8      things that would be on a checklist?

       9             Size of property?  Number of bedrooms?

      10             M. RYAN GORMAN:  Yeah, for most part, trying

      11      to get a sense of the consumer.

      12             So their -- their timeline.

      13             The reason for their desire to move.

      14             The reason for their contact with this agent

      15      in this particular area.

      16             What their knowledge is of the area, if they

      17      have friends or family in the area, that may help

      18      the agent to have a better understanding of what

      19      level of knowledge, you know, they're dealing with.

      20             What type of home they want to buy; type in

      21      all nature.

      22             So, you know, single-family detached.  What

      23      type of architecture may be important to them.

      24      Bedrooms, bathrooms.

      25             Family needs.  The -- how those needs may







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       1      change over the near term.

       2             How long they wish to stay in the property;

       3      whether they're viewing this as a potential

       4      investment property that would need rental income in

       5      the future, or an owner-occupied property.

       6             I mean, I could go on, but those are the --

       7      those are some of the key questions that may be

       8      asked.

       9             SENATOR GAUGHRAN:  Would be -- would school

      10      district be one of the questions on that checklist?

      11             M. RYAN GORMAN:  Well, certainly, school

      12      districts are often extremely important to, you

      13      know, parents.  And so that's high on the mind of

      14      lots of consumers, sure.

      15             SENATOR GAUGHRAN:  So a question might be

      16      asked:  What school district -- do you have a school

      17      district in mind that you would like your family to

      18      live in?

      19             M. RYAN GORMAN:  I think it's a very common

      20      thing put forth by consumers, and a very common

      21      question that agents may ask if they're not certain

      22      what the criteria is that the consumer is looking

      23      for.

      24             Typically, consumers will have, if they're

      25      familiar with the area, towns in mind, potentially







                                                                   203
       1      school districts in mind.  Sometimes those overlap

       2      and sometimes they don't.  So, oftentimes, agents

       3      will be directing consumers to resources where they

       4      can learn more about school districts.

       5             SENATOR GAUGHRAN:  Would it be possible to

       6      present some of these checklists to this Committee?

       7             M. RYAN GORMAN:  Well, those checklists are

       8      individual agent checklists.

       9             SENATOR GAUGHRAN:  Sure.

      10             M. RYAN GORMAN:  There could be

      11      [indiscernible cross-talking] examples.

      12             SENATOR GAUGHRAN:  Perhaps you could reach

      13      out?

      14             I would presume that there's a standard

      15      checklist that one, you know, brokerage firm might

      16      use?

      17             M. RYAN GORMAN:  So, to my knowledge, we do

      18      not have one standard checklist.

      19             Our agents have -- have many.  And there's

      20      lots available online.  [Indiscernible

      21      cross-talking] --

      22             SENATOR GAUGHRAN:  So maybe we could get

      23      samples of them from some of your --

      24             M. RYAN GORMAN:  Possibly.

      25             We can follow up.







                                                                   204
       1             I truly don't know that we have a standard.

       2             SENATOR GAUGHRAN:  And once an agent takes in

       3      all that information, what do they do with it?

       4             Do they run it through a program to come up

       5      with possible homes?

       6             M. RYAN GORMAN:  It's relatively

       7      idiosyncratic, and person-specific, how an

       8      individual agent will work with a consumer.

       9             So, for instance, some consumers want to

      10      begin looking right away, but they're comfortable

      11      doing so online.

      12             Others don't want to decide on what next step

      13      to take until they gain a very -- a more physical

      14      familiarity with an area.  So they might get in a

      15      car with an agent, to drive around and explore

      16      areas, or look at available properties to get a

      17      better sense of what the community may be.

      18             So it really does differ considerably.

      19             SENATOR GAUGHRAN:  But are there any

      20      particular sites, or software, or program, that an

      21      agent might use if somebody just comes in and has

      22      done, you know, no research ahead of time?

      23             M. RYAN GORMAN:  In order to educate consumer

      24      about --

      25             SENATOR GAUGHRAN:  In order to come up with a







                                                                   205
       1      specific list of listings to show them.

       2             M. RYAN GORMAN:  So most real estate agents

       3      in most areas will rely upon their MLS, or

       4      third-party tools that use MLS information, for

       5      existing available inventory, to then get some

       6      feedback from the consumer on what reactions are to

       7      different inventory that's available.

       8             SENATOR GAUGHRAN:  And with that MLS, they

       9      can plug in all these criteria that they may have

      10      gotten off the checklist?

      11             M. RYAN GORMAN:  Many of those that we

      12      discussed, they cannot.  Some they can, of course.

      13             Even square footage, for instance, varies

      14      dramatically by area, as to whether or not it's a

      15      criteria that's available in an MLS or on an

      16      individual listing.

      17             SENATOR GAUGHRAN:  What criteria could they

      18      not use?

      19             M. RYAN GORMAN:  Well, as an example, the

      20      size of the home, that does vary, through -- due to

      21      various litigation over time.  And some areas, size

      22      of home is not something that is an MLS criteria any

      23      longer for active listings.

      24             SENATOR GAUGHRAN:  But school district is

      25      standard?







                                                                   206
       1             M. RYAN GORMAN:  Most programs, for instance,

       2      consumer-facing websites, use third-party firms,

       3      that take the address of a home, and then match it

       4      up against third-party databases of school

       5      districts, in part, because school districts do

       6      change on occasion, and, in part, because the

       7      providers of those websites don't want to

       8      necessarily take liability for incorrect information

       9      being provided to a consumer.

      10             SENATOR GAUGHRAN:  Okay.

      11             Thank you very much.

      12             SENATOR KAVANAGH:  Thank you.

      13             So just one more question for me, and then

      14      I'm going to turn it back over to Senator Skoufis.

      15             You testified that you are considering a

      16      very, sort of, proactive [no audio] enforcement, and

      17      investigation methods, within your company.

      18             And we've had a lot of testimony today that

      19      additional enforcement and investigation is

      20      necessary, perhaps not just on Long Island, but

      21      statewide.

      22             We are, as has been noted, going into a new

      23      legislative session, with a new state budget

      24      process.

      25             And you and your industry are well







                                                                   207
       1      represented in Albany.

       2             Would you support addition -- based on what

       3      you've seen in this investigation, and your

       4      knowledge of the industry and issue, additional

       5      efforts, additional resources, provided by the state

       6      government to ensure this kind of practice is

       7      properly investigated?

       8             M. RYAN GORMAN:  In general, yes,

       9      I definitely would.

      10             Specifically, what, we would be happy to, you

      11      know, provide feedback on any individual proposals.

      12             But, any efforts that we think could be --

      13      "we," collectively, believe could be effective in

      14      achieving the outcomes that were sort of promised by

      15      the Fair Housing Act in the first place, we would

      16      fully support.

      17             SENATOR KAVANAGH:  Okay.

      18             Thank you.

      19             Back to Senator Skoufis.

      20             SENATOR SKOUFIS:  Thank you.

      21             Thank you very much for your testimony.

      22             And I don't have any -- I don't think any of

      23      us have any further questions for you.

      24             I do just want to make a note, as a matter of

      25      fairness, that, certainly, while there are a number







                                                                   208
       1      of stakeholders within your company and your

       2      affiliates who were involved in the discrimination

       3      found by the "Newsday" expos�, I believe two of your

       4      affiliates were exonerated.

       5             And I do just want to make that point for the

       6      public record.

       7             But thank you very much for your attendance

       8      today.

       9             M. RYAN GORMAN:  Thank you.

      10             Thank you all for the work you're doing.

      11             SENATOR SKOUFIS:  Before we call up the next

      12      set of witnesses, again, as my -- as my colleagues

      13      noted, we want to thank Mr. Gorman for his

      14      testimony; equally, his compliance with our request

      15      to appear.

      16             And so it's at this point I'd like to note

      17      that we issued requests for testimony to

      18      35 real estate agents and 33 representatives from

      19      real estate companies that were involved with

      20      "Newsday's" expos�.

      21             With the exception of Mr. Gorman, the

      22      remaining 67 individuals either neglected to respond

      23      to our request or outright refused to provide

      24      testimony.

      25             As is often the case, there is an easy way to







                                                                   209
       1      go about things, and there is a hard way.

       2             It's unfortunate that 67 of 68 individuals

       3      chose the hard way.

       4             Following today's hearing, subpoenas will be

       5      served to many of these 67 individuals in order to

       6      compel future testimony.

       7             We look forward to their participation.

       8             Thank you again.

       9             Next up we'll call Richard Helling and

      10      Johnny Mae Alston, who were testers in the "Newsday"

      11      investigation.

      12             And I just want to confirm Lenora Smith is

      13      not here.

      14             If she is, she certainly should come up at

      15      this time as well.

      16             Thank you for your attendance.

      17             Who would like to go first?

      18             Do you have prepared testimony --

      19             RICHARD HELLING:  [Inaudible.]

      20             SENATOR SKOUFIS:  -- you'd like to share?

      21             JOHNNIE MAE ALSTON:  No.

      22             SENATOR SKOUFIS:  No?

      23             Okay.  So then we'll jump right into

      24      questions, then.

      25             Can you briefly explain how you became







                                                                   210
       1      involved in the "Newsday" effort?

       2             JOHNNIE MAE ALSTON:  I was -- I was notified

       3      through an acting magazine.

       4             When I first got it, they asked -- you know,

       5      I -- I turned them down a couple of times.  And then

       6      I spoke with one of their representative [sic],

       7      Bill.

       8             And we were -- we went through training -- he

       9      told me what it was about, he told me to come and

      10      check it out.

      11             So I came and checked it out.

      12             And they gave us a couple of days of

      13      training.

      14             And I thought it was a great idea.  It was

      15      sort of like my kind of work.

      16             I'm a background actor, basically.

      17             And, you know, it was just a new challenge,

      18      and an exciting challenge for me.

      19             SENATOR SKOUFIS:  And you, sir?

      20             RICHARD HELLING:  Oh, for me it was, a friend

      21      of my husband's was already involved with the

      22      project.

      23             And so I met her at a party, and she talked

      24      with me about the project.  And that's how I became

      25      involved.







                                                                   211
       1             SENATOR SKOUFIS:  Very good.

       2             Did either of you or both of you have any

       3      expectations to the scope of the discrimination that

       4      was ultimately found in "Newsday," heading into this

       5      effort?

       6             JOHNNIE MAE ALSTON:  I had no idea what was

       7      out there.

       8             You know, being an African-American, you

       9      always have in the back of your head, there's always

      10      somebody trying to get over on you all the time.

      11             But I had -- I never even thought about this

      12      when I went into it.

      13             You know, I'm, like, you know -- you know,

      14      you think that there's nothing out there, but, we'll

      15      test it and see.

      16             But I didn't think anything of it, to be

      17      quite honest with you.

      18             RICHARD HELLING:  And I'm relatively new to

      19      Long Island, so I really didn't know Long Island.

      20      So, yeah, I had no expectations.

      21             SENATOR SKOUFIS:  Okay.

      22             There came a point, eventually, where the --

      23      the results of your pairing were made apparent to

      24      you.  Is that correct?

      25             JOHNNIE MAE ALSTON:  Yes.







                                                                   212
       1             RICHARD HELLING:  That's right.

       2             SENATOR SKOUFIS:  And can you describe,

       3      briefly, your feelings when you were told what

       4      happened with those you were paired with?

       5             JOHNNIE MAE ALSTON:  When I was told what --

       6      what happened, I didn't know until we actually did

       7      the taping.

       8             And even though I know in the back of my head

       9      that I'm always going to be discriminated against in

      10      some way, I really didn't think about it, because,

      11      when I went to these places, these people were

      12      absolutely wonderful.

      13             We were actors, but they were better actors,

      14      you know.

      15             And I didn't feel at all that I had been

      16      discriminated against, except for, like, one person

      17      that I had went to, that really, like, said to me,

      18      Oh, no, no, no, no, and shooed me away.

      19             That was the only one out of all the tests

      20      I did that I felt like, you know, she's kind of

      21      crabby.

      22             And -- but, otherwise, I would have never

      23      known.  I thought I was treated very well.

      24             SENATOR SKOUFIS:  And you, sir?

      25             RICHARD HELLING:  Yeah, I was shocked when







                                                                   213
       1      I saw the footage, and that was the first I really

       2      had an inkling of the scope of what the problem was.

       3             There were a few times on the individual

       4      tests that I heard sort of inappropriate comments.

       5             But, without knowing what was happening to my

       6      counterpart tester, I had no idea of how they were

       7      being treated.

       8             SENATOR SKOUFIS:  And this question is

       9      primarily for Miss Alston.

      10             So you were clearly surprised, and you were

      11      both surprised, when you were told what had

      12      happened.

      13             What were the rest of your feelings like?

      14             Did you feel betrayed?

      15             Certainly, I suspect you were personally

      16      hurt.

      17             JOHNNIE MAE ALSTON:  I was very hurt.

      18             I was very hurt.

      19             You know, it's, like, in life, things go

      20      around in a circle, and you think that everything is

      21      so good and so great, things have changed.

      22             But in reality, it just goes around in a

      23      circle and come back to where you started off in the

      24      beginning.

      25             I was very hurt.







                                                                   214
       1             It like hurts you to your heart, because,

       2      you're a human being, and everybody should be

       3      treated the same.

       4             And I felt that I wasn't treated the same.

       5      I was -- I was -- I was treated differently because

       6      of the color of my skin, which I thought is so -- is

       7      so unfair, because there's so much potential in

       8      everybody.

       9             And it's, like, one thing I had -- one job,

      10      I had $500,000 to put down.

      11             It didn't matter, didn't care, about what --

      12      how much money I had to put down.

      13             So that, to me, that was no issue at all.

      14             She was just looking at the color of my skin.

      15      She wasn't looking at nothing else.

      16             Once I walked in the door, that's all the

      17      person saw, was the color of my skin.

      18             They didn't see me.

      19             SENATOR SKOUFIS:  Thank you for sharing that.

      20             One of the tests that you were involved with

      21      was a real estate agent by the name is

      22      Anne Marie Queally Bechand.

      23             JOHNNIE MAE ALSTON:  That's the one.

      24             SENATOR SKOUFIS:  She's with

      25      Signature Premier Properties in Cold Spring Harbor.







                                                                   215
       1             I'd like to play you a clip, which I'm sure

       2      you've seen, showing a conversation between this

       3      agent and Cindy Perry.

       4             Ms. Perry is White.

       5             So if you could please play Clip Number 32.

       6             Sorry, one second.

       7             This is right, yep, yep.

       8             JOHNNIE MAE ALSTON:  No.

       9             OFF-CAMERA SPEAKER:  It's Clip 30.

      10             SENATOR SKOUFIS:  30.

      11             JOHNNIE MAE ALSTON:  That's not Cindy.

      12             OFF-CAMERA SPEAKER:  Excuse me --

      13             OFF-CAMERA SPEAKER:  This is 32.

      14             OFF-CAMERA SPEAKER:  -- this is 32?

      15             Play 32.  My apologies.

      16             OFF-CAMERA SPEAKER:  This is 30.

      17             OFF-CAMERA SPEAKER:  Are we playing 30, or

      18      32?

      19             OFF-CAMERA SPEAKER:  You're playing 32.

      20      My --

      21             OFF-CAMERA SPEAKER:  Okay, okay.

      22             [Start of Video Clip 32.]

      23             THE AGENT:  Just because we want to be on the

      24      ground here, is to start in this area, and fan our

      25      way out.







                                                                   216
       1             THE TESTER:  I'll let you [indiscernible] --

       2             THE AGENT:  Okay, so then --

       3             THE TESTER:  -- [indiscernible] --

       4             THE AGENT:  -- what I'll do is, I'm going to

       5      be sending you, obviously, an email, some houses to

       6      look at.  [Indiscernible] have photos.

       7             I also, with that, send a map of where they

       8      are.

       9             THE TESTER:  Uh-huh.

      10             THE AGENT:  So you'll get e-mails that, when

      11      you open it up, it will have a map up front, with

      12      all the little numbered houses, and then the

      13      listings below it, with the details on the house and

      14      the photos on it.

      15             THE TESTER:  Okay.

      16             THE AGENT:  It's something -- that's why

      17      photos are so important on listings.

      18             If something strikes you, or you're just a

      19      little bit curious, or you're not sure, we make an

      20      appointment.  You tell me what you want.

      21             THE TESTER:  Okay.

      22             THE AGENT:  And then the -- again, the

      23      benefit of working with an agent, is you're not

      24      going to [indiscernible] houses.  You're actually

      25      saying, okay, I'm available on Wednesday afternoon,







                                                                   217
       1      starting at twelve.  And then I just -- and I -- you

       2      know, you decide, we want to see five on in a day,

       3      we want to six in a day.  Maybe [indiscernible] more

       4      that in a day.  Maybe not.

       5             And then [indiscernible cross-talking] --

       6             THE TESTER:  How long, from your experience,

       7      does it take to --

       8                [End of Video Clip 32.]

       9             SENATOR SKOUFIS:  Can you also play 33?

      10                [Start of Video Clip 33.]

      11             THE AGENT:  How many times [skip in video.]

      12             You want to know about the taxes, and you

      13      want to go over the closing costs with him.

      14             THE TESTER:  Right, yeah.

      15             THE AGENT:  How many times have you spoken to

      16      Richard?

      17             THE TESTER:  Just once.

      18             THE AGENT:  Oh, good.  Okay, because all of

      19      that [indiscernible] next conversation will

      20      definitely be covered.

      21             THE TESTER:  Yeah, yeah, no, they just

      22      mentioned it [indiscernible cross-talking], started

      23      the process.  [Indiscernible.]

      24             THE AGENT:  Okay, so they will, next time you

      25      speak to them.







                                                                   218
       1             THE TESTER:  Uh-huh.

       2             THE AGENT:  Let's see.

       3             I'm giving you this.  This is just your

       4      [indiscernible.]

       5             THE TESTER:  [Indiscernible.]

       6             THE AGENT:  And take these, because there's

       7      my number on it, so you'll always have it with you.

       8             THE TESTER:  Okay.

       9             THE AGENT:  [Indiscernible.]

      10             THE TESTER:  Oh, that's so cool.

      11             THE AGENT:  Isn't it, though?  I know.

      12             THE TESTER:  Yeah, that's so cool.

      13             THE AGENT:  I love my pen.

      14             And, like I said, I'll send out an

      15      introductory e-mail to you, so you have my

      16      information in your phone.  And then I'll put some

      17      listings together and send them to you as well.

      18             THE TESTER:  [Indiscernible.]

      19             THE AGENT:  If you're ready this week, we'll

      20      go out later this week.

      21             If you want to wait and start fresh next

      22      week, then we'll do that.

      23             THE TESTER:  Oh, okay.  Yeah, sure.

      24             THE AGENT:  You let me know.

      25             THE TESTER:  Uh-huh.







                                                                   219
       1             THE AGENT:  If I have something, as you know,

       2      I'll tell you I have something.

       3                [End of Video Clip 33.]

       4             SENATOR SKOUFIS:  Thank you.

       5             I know the audio is a little bit foggy, but

       6      do you know how long the real estate agent there and

       7      the potential client spoke for?

       8             JOHNNIE MAE ALSTON:  That wasn't Anne Marie.

       9             OFF-CAMERA SPEAKER:  That was the clip

      10      [indiscernible] --

      11             JOHNNIE MAE ALSTON:  That wasn't Anne Marie.

      12             SENATOR SKOUFIS:  Okay, I'm getting some

      13      conflicting information here.

      14             Regardless, the conversation that took place

      15      with the real estate agent I described, do you know

      16      how long that conversation took place with, with the

      17      White tester?

      18             JOHNNIE MAE ALSTON:  No.

      19             SENATOR SKOUFIS:  Over an hour.

      20             JOHNNIE MAE ALSTON:  Oh.

      21             SENATOR SKOUFIS:  And as you probably know,

      22      she was not asked to provide a pre-certification

      23      letter -- a mortgage pre-certification letter.

      24             And I want to, hopefully, put up the clips of

      25      you speaking with the real estate agent, Marie.







                                                                   220
       1             Clip 30.

       2                [Start of Video Clip 30.]

       3             THE AGENT:  So it's just you and your

       4      husband?

       5             THE TESTER:  Yes.

       6             THE AGENT:  How many bathrooms?

       7             THE TESTER:  It doesn't matter.

       8             THE AGENT:  Okay.  So at least one and a

       9      half?

      10             THE TESTER:  Anything.

      11             I don't know.  We've never looked at houses

      12      before.

      13             THE AGENT:  Okay.

      14             Are you pre-qualified?  [Indiscernible] --

      15             THE TESTER:  My husband is working with

      16      somebody in the bank.

      17             THE AGENT:  Which bank?

      18             THE TESTER:  I am not sure.

      19             He's taking care of that.  And then he had to

      20      go out of town to do a training.

      21             So, I don't know about that.

      22             I have to get to him about that, because I've

      23      been running like a dog.

      24             THE AGENT:  I know.

      25             So I really need that.  I won't take out







                                                                   221
       1      anyone unless you have a pre-qualification letter.

       2             THE TESTER:  So that means [indiscernible] --

       3             THE AGENT:  [Indiscernible] pre-qualify for a

       4      mortgage.

       5             THE TESTER:  Oh.  So that means I can't go

       6      out to see anything --

       7             THE AGENT:  I won't -- I won't do it.

       8             You can try another person, but I don't have

       9      the time to do that --

      10             THE TESTER:  Uh-huh.

      11             THE AGENT:  -- because I need to know that

      12      you're serious.

      13             THE TESTER:  Uh-huh.

      14             THE AGENT:  I really need a pre-qualification

      15      letter.

      16             It also shows on that your price range.

      17             THE TESTER:  Yeah, my price range is, like,

      18      $500,000.

      19             THE AGENT:  Okay.

      20             So -- but I need to have the bank say, yes,

      21      that's your price range.

      22             THE TESTER:  Okay.

      23             THE AGENT:  You may think it's fast.

      24             Maybe it's a little more, maybe it's a little

      25      less.  But if we're at that range that the letter







                                                                   222
       1      says, then I know we're full steam ahead.

       2             THE TESTER:  Oh, okay.

       3             THE AGENT:  That's why -- that's why it's

       4      really important.

       5             Also, what's great about that, it tells you

       6      how much in taxes you can afford.

       7             THE TESTER:  Uh-huh.

       8                [End of Video Clip 30.]

       9             SENATOR SKOUFIS:  If you couldn't hear, the

      10      agent says, "So I really need that," meaning, a

      11      pre -- a mortgage pre-certification --

      12             JOHNNIE MAE ALSTON:  Yes.

      13             SENATOR SKOUFIS:  -- letter.

      14             "I won't take out anyone unless you have a

      15      pre-qualification letter.  So I need to know that

      16      you're pre-qualified for a mortgage."

      17             And then you note, "I didn't realize I needed

      18      that," effectively.

      19             And the agent replies, "I won't -- I won't do

      20      it.  You can try another person," and she goes on

      21      for a little bit after that.

      22             I'd like to now play the final clip here,

      23      which is Clip Number 31.

      24                [Start of Video Clip 31.]

      25             THE AGENT:  And then as soon as you get that







                                                                   223
       1      pre-qualification, that would be wonderful.

       2             THE TESTER:  Okay.

       3             THE AGENT:  And here is this [indiscernible].

       4             THE TESTER:  Oh, okay, you have a brochure.

       5             THE AGENT:  [Indiscernible.]  Here's our

       6      contracts.

       7             THE TESTER:  Okay.

       8             THE AGENT:  And, that's it.

       9             THE TESTER:  How do you say your last name?

      10             THE AGENT:  Bechand.

      11             THE TESTER:  Bechand?

      12             THE AGENT:  Yeah.

      13             THE TESTER:  And how do you spell your middle

      14      name?

      15             THE AGENT:  Anne Marie Queally.

      16             THE TESTER:  Bechand?

      17             THE AGENT:  Yeah.

      18             THE TESTER:  Okay.

      19             What is that, is that French?

      20             THE AGENT:  Yeah.  [Indiscernible.]

      21             THE TESTER:  Okay.  All right.

      22             Okay.  Thank you so much, Anne, for your

      23      time.

      24             THE AGENT:  I'm so sorry for your running

      25      around.







                                                                   224
       1             THE TESTER:  Oh, well, I made it here.

       2                [End of Video Clip 30.]

       3             SENATOR SKOUFIS:  So there, again, she

       4      requests a pre-qualification, a pre-certification.

       5             JOHNNIE MAE ALSTON:  Yes.

       6             And also, before, she did ask me for

       7      pre-qualification.  And I told her that my husband

       8      was working on it.

       9             SENATOR SKOUFIS:  Okay.

      10             What's your reaction to watching those clips

      11      again?

      12             JOHNNIE MAE ALSTON:  She really didn't like

      13      me at all.

      14             She --

      15             SENATOR SKOUFIS:  Did you know that at the

      16      time?

      17             JOHNNIE MAE ALSTON:  -- she -- you know what?

      18             She made me feel like she was annoyed.

      19             She's the only one that made me feel like she

      20      was annoyed, and that, you know, I would, like, come

      21      in there without, you know, any pre-qualifications.

      22      And, like, I don't know what I'm doing, so here's

      23      what you have to do.  You got to do this, this, and

      24      this, but I really can't.

      25             It's, like, there's no way that she was going







                                                                   225
       1      to take me out.

       2             You know, I just -- you feel it.

       3             Sometimes you just know when somebody is,

       4      like, I'm not with you at all.

       5             But she -- out of everyone, she made me feel

       6      unworthy.

       7             SENATOR SKOUFIS:  Did you know at that time

       8      that you did not need a pre-qualification letter --

       9             JOHNNIE MAE ALSTON:  Yes.

      10             SENATOR SKOUFIS:  -- to be able to see homes?

      11             JOHNNIE MAE ALSTON:  Yes.

      12             SENATOR SKOUFIS:  You did?

      13             JOHNNIE MAE ALSTON:  Yes.

      14             SENATOR SKOUFIS:  And, so, did you realize

      15      then that you were being discriminated against?

      16             JOHNNIE MAE ALSTON:  With her, yes, only

      17      because of the way that she spoke, and her adamancy

      18      about, "I'm not taking you out."

      19             SENATOR SKOUFIS:  And --

      20             JOHNNIE MAE ALSTON:  And even -- because

      21      I had been out with other people before, even

      22      without it I [indiscernible] been out.

      23             SENATOR SKOUFIS:  If you weren't a tester, if

      24      you weren't acting out a situation there, and that

      25      was actually happening to you as a real prospective







                                                                   226
       1      homebuyer, would you have filed a complaint after

       2      being treated that way?

       3             JOHNNIE MAE ALSTON:  No, I probably wouldn't

       4      have.  I probably would have just went on to

       5      somebody else, and told everybody what a lousy

       6      person she was, because I wouldn't have known that

       7      I could do anything, or could tell anybody what

       8      happened.  And I'm thinking that it's, just, it

       9      happens all the time to everybody --

      10             SENATOR SKOUFIS:  I think --

      11             JOHNNIE MAE ALSTON:  -- of color.

      12             SENATOR SKOUFIS:  I think you've -- you've

      13      hit the point here, which is, that, yes, we know the

      14      discrimination is existing.  And certainly now we're

      15      aware of the scope of that discrimination.

      16             But equally as important, we cannot -- as was

      17      noted by a couple of the previous witnesses, we

      18      can't simply rely on complaints to drive a solution

      19      here.

      20             Would you agree?

      21             JOHNNIE MAE ALSTON:  You can't, because a lot

      22      of people just get fed up and they'll go someplace

      23      else.

      24             And then, as I said, it's hard to get people

      25      to believe what you say without proof.







                                                                   227
       1             Without proof, you ain't got nothing, unless

       2      you take a tape recorder and a video camera every

       3      time you go, and say, Well, look at this.

       4             And then you send one of your White friends

       5      in and -- with the same scenario.

       6             That's the only true way you're going to find

       7      out.

       8             SENATOR SKOUFIS:  Do you recall how many

       9      agents each of you spoke with, met with?

      10             RICHARD HELLING:  Oh, I would say it was

      11      probably about 15, or so.

      12             JOHNNIE MAE ALSTON:  I would say about that

      13      many, also, yeah.

      14             SENATOR SKOUFIS:  Okay.

      15             And now knowing what you know, and seeing the

      16      results of this expos�, would you characterize this

      17      discrimination as systematic?

      18             JOHNNIE MAE ALSTON:  Yes.

      19             RICHARD HELLING:  Absolutely.

      20             SENATOR SKOUFIS:  Do you believe that these

      21      practices are shared amongst real estate agents,

      22      where they talk with one another, hey, you know,

      23      this is the way I treat these kind of situations,

      24      these are how I handle these types of people, if you

      25      will?







                                                                   228
       1             Do you think that --

       2             JOHNNIE MAE ALSTON:  Yes.

       3             SENATOR SKOUFIS:  -- those conversations

       4      happen?

       5             JOHNNIE MAE ALSTON:  Yes, yes.

       6             RICHARD HELLING:  I can't -- I can't speak to

       7      what the --

       8             JOHNNIE MAE ALSTON:  I think so.

       9             RICHARD HELLING:  -- real estate agents are

      10      thinking.

      11             SENATOR SKOUFIS:  But, surely, I -- actually,

      12      I shouldn't lead you.

      13             Do you believe that it's a coincidence that

      14      49 percent of African-Americans were found to be

      15      discriminated against, or do you think there --

      16      there is really something more there, and this is --

      17      this is truly systematic, and there are practices

      18      that are shared amongst the people who are doing

      19      this?

      20             RICHARD HELLING:  I think that it's

      21      absolutely systematic.

      22             But whether practices are intentionally

      23      shared between realtors, that's -- you know, I don't

      24      know.

      25             SENATOR SKOUFIS:  Do you feel that your







                                                                   229
       1      training was adequate?

       2             JOHNNIE MAE ALSTON:  Yes.

       3             RICHARD HELLING:  Yes.

       4             JOHNNIE MAE ALSTON:  They did -- we did tests

       5      before we even went out on tests.

       6             They questioned us about our scenarios that

       7      we had.  They would quiz us before we went out.

       8             And even with the testing that we had,

       9      I think we had a great testing -- great training.

      10             RICHARD HELLING:  Yeah, and I think the

      11      question has came up earlier, too, about the rigor

      12      of the testing.

      13             And I've been involved with research in the

      14      past.  And I was very impressed at the

      15      professionalism and the quality that the journalists

      16      put into this project, so as to -- that we -- our

      17      role was to gather information.  And -- and we did

      18      it in a very professional way.

      19             SENATOR SKOUFIS:  Thank you.

      20             And not just for your presence here, but,

      21      more importantly, certainly, on being an

      22      instrumental component of bringing this all to

      23      light, you know, quite frankly, I would say the

      24      central component of bringing all this to light.

      25             I now will turn it over to Senator Kaplan.







                                                                   230
       1             SENATOR KAPLAN:  So I have a quick question

       2      to ask you.

       3             You talked about, knowing what you know now,

       4      would you file that complaint?

       5             And you said -- at the time, you said you

       6      wouldn't have filed it.  You just moved on to the

       7      next person.

       8             Can you give us, as someone who's gone

       9      through this process, any insight what we could do

      10      to actually inform people, like yourself, when

      11      they're going through this process, to actually take

      12      that step to report this?

      13             JOHNNIE MAE ALSTON:  You know what?  I think

      14      that, you know, there's always information out

      15      there.

      16             Everything you do, there's plenty of

      17      information, but the problem is, where do you find

      18      it?

      19             You know, everybody has this information.

      20             And it's, like, now, since I've been in it

      21      and I've done a couple of jobs for a couple of other

      22      people, I would know where to go.

      23             But prior to that, like, from today,

      24      I wouldn't have known, because, since I've done it,

      25      I know.







                                                                   231
       1             That's the only thing.

       2             But I don't know if there's any way to make

       3      it better, besides putting out information so that

       4      people can see it and know about it.  That's about

       5      it.

       6             SENATOR KAPLAN:  So you've gone through it

       7      now, and now you know where to look -- correct? --

       8      at least ask the questions.

       9             If you were -- someone asked you before, do

      10      you have any suggestion how we could actually reach

      11      out to all these people who really don't want to be

      12      bothered to -- and they don't know where to look?

      13             JOHNNIE MAE ALSTON:  Well, I think every

      14      office is supposed to have a -- something up in

      15      their offices about discrimination.

      16             So that -- that would help if you would see

      17      them in the offices when you go there, that you have

      18      a right, if you feel like you were discriminated

      19      against, blah blah blah.

      20             A lot of people, they don't have the

      21      discrimination disclosure in their offices.

      22             I think that would be a good one, but it's

      23      got to be so people can see it, because sometimes

      24      the things that are posted, it's not posted where

      25      people can see it.







                                                                   232
       1             It's either on a back wall over here, so if

       2      anybody asks, they'll say, Oh, yeah, we have that

       3      discrimination notice.

       4             But, it's in the back room, so nobody gets to

       5      see it.

       6             SENATOR KAPLAN:  Thank you.  I think that

       7      actually is very helpful.  Maybe that's something we

       8      could look into, and have something that has to be

       9      posted, that's really in plain view, and readable by

      10      a lot of people who visit these offices.

      11             JOHNNIE MAE ALSTON:  Yeah, and not in tiny

      12      print.

      13             SENATOR KAPLAN:  Right.

      14             SENATOR SKOUFIS:  Senator Gaughran.

      15             SENATOR GAUGHRAN:  Well, thank you both

      16      for participating in something that looks like

      17      it's going to be something very important for

      18      Long Island.

      19             And appreciate your testimony.

      20             Ms. Alston, question for you.

      21             Did I hear you correctly that, with -- with

      22      this agent that you were talking about, you

      23      communicated that you had $500,000 --

      24             JOHNNIE MAE ALSTON:  To put down --

      25             SENATOR GAUGHRAN:  -- to put down?







                                                                   233
       1             Okay.

       2             JOHNNIE MAE ALSTON:  -- yes.

       3             That was Anne Marie, yeah.

       4             SENATOR GAUGHRAN:  Was there a price of a

       5      home that was being discussed?

       6             JOHNNIE MAE ALSTON:  No, no, no.

       7             I was telling her how much I had to put down.

       8             Like, usually you have money in your savings

       9      or checking account.

      10             SENATOR GAUGHRAN:  Right?

      11             JOHNNIE MAE ALSTON:  And then you have your

      12      money, and you say, well, I can put down $500,000.

      13             So that -- that's just to give you a hint,

      14      like, I do have money --

      15             SENATOR GAUGHRAN:  Right, I mean --

      16             JOHNNIE MAE ALSTON:  -- you know, that I can

      17      put down.

      18             SENATOR GAUGHRAN:  -- 'cause -- 'cause

      19      I think, even in today's real estate market, if

      20      you're putting down $500,000, for most homes on

      21      Long Island, you're probably going to be able to buy

      22      the house and qualify for a mortgage, because you're

      23      putting so much of your money into it.

      24             Just seemed -- that seems a real red flag to

      25      me.







                                                                   234
       1             JOHNNIE MAE ALSTON:  No, I got to change

       2      that.

       3             $100,000 down for a $500,000 house.

       4             SENATOR GAUGHRAN:  Oh, one hundred for

       5      $500,000?

       6             JOHNNIE MAE ALSTON:  Yes.

       7             SENATOR GAUGHRAN:  Okay, okay.

       8             But thank you for what you did, what you both

       9      did.

      10             SENATOR SKOUFIS:  Senator Kavanagh.

      11             SENATOR KAVANAGH:  Thank you,

      12      Senator Skoufis.

      13             So, Mr. Helling, I just want to go into a

      14      particular -- one of the particular [indiscernible]

      15      you had.

      16             You were involved in a paired test, Test

      17      Number 96, that was designated by "Newsday,"

      18      involving a real estate agent,

      19      Leanne Vicari [ph.][sic], then of Keller Williams

      20      of Hauppauge.

      21             As part of this test you were paired with

      22      Kelvin Toon [ph.] who is African-American.

      23             On November 18, 2016, Mr. Toon met with

      24      Agent Vicati [ph.], and I'd like to play the clip of

      25      that, if we can.







                                                                   235
       1             It's Clip Number 96.

       2                [Start of Video Clip Number 96.]

       3             THE AGENT:  [Indiscernible.]

       4             THE TESTER:  Hi, yes, my name is Kelvin Toon.

       5      How you doing?

       6             THE AGENT:  [Indiscernible]?

       7             THE TESTER:  Yes, [indiscernible].

       8             THE AGENT:  Hi, how are you?

       9             THE TESTER:  Me and my wife are looking to

      10      purchase a home --

      11             THE AGENT:  Okay.

      12             THE TESTER:  -- in the Brooklyn area.

      13             THE AGENT:  Okay.

      14             THE TESTER:  Do you have a couple of minutes

      15      to talk to us?

      16             THE AGENT:  Sure.  Come on in.

      17             THE TESTER:  Thank you.

      18             [Indiscernible] all those -- all those are

      19      agents that work for the company?

      20             THE AGENT:  Yes.

      21             THE TESTER:  She was told -- she thought she

      22      was that this was a big real estate agency.  Is it

      23      [indiscernible] --

      24             THE AGENT:  It is.  Actually, the largest

      25      company in the world.







                                                                   236
       1             This is the only Suffolk office.

       2             THE TESTER:  Okay?

       3             THE AGENT:  And we're actually -- I actually

       4      just looked at the market share the other day.

       5             THE TESTER:  Uh-huh, yes?

       6             THE AGENT:  So out of 978 offices in

       7      Suffolk County, we're Number 14.

       8             THE TESTER:  Wow.  Okay.

       9             She said [indiscernible].  Well, I guess you

      10      [indiscernible] --

      11             THE AGENT:  This is such a wonderful office.

      12             THE TESTER:  She didn't send me on a wild

      13      goose chase?

      14             THE AGENT:  No, she didn't.

      15             THE TESTER:  Okay.

      16             THE AGENT:  Come sit down.

      17             THE TESTER:  Okay.  Thank you.

      18             THE AGENT:  [Indiscernible.]

      19             THE TESTER:  [Indiscernible.]

      20             THE AGENT:  You live in Brentwood right now?

      21             THE TESTER:  No, I live in New York.

      22             THE AGENT:  Oh.

      23             THE TESTER:  [Indiscernible.]

      24             THE AGENT:  In the city?

      25             THE TESTER:  In the city, yes,







                                                                   237
       1      [indiscernible].

       2             THE AGENT:  What brings you out here?

       3             THE TESTER:  Well, she's found a job.

       4      [Indiscernible.]  She works for -- at NYU,

       5      [indiscernible].

       6             THE AGENT:  Oh, how nice.

       7             THE TESTER:  And she's coming here to the

       8      Brentwood area to work.

       9             THE AGENT:  But I have to tell you, my

      10      clients in Brentwood are the nicest clients.

      11             I always tell everybody that.

      12             Every time I get a new listing in Brentwood,

      13      or a new client, I get so excited because they're

      14      the nicest people.

      15             THE TESTER:  [Indiscernible.]

      16             THE AGENT:  [Indiscernible], I don't know

      17      why, [indiscernible] Brentwood is like my -- my

      18      favorite areas to work because people are so nice.

      19             THE TESTER:  Oh, okay.  This sounds good.

      20             THE AGENT:  Yeah.

      21                [End of Video Clip 96.]

      22             SENATOR SKOUFIS:  So, just again, I think

      23      that because the sound quality in the room may vary,

      24      there was just one -- one -- this is from the

      25      transcript:







                                                                   238
       1             "I have to tell you my clients in Brentwood

       2      are the nicest clients.  I always tell everybody

       3      that, every time I get a new listing in Brentwood,

       4      or a new client, I get so excited because they're

       5      the nicest people."

       6             So we have -- I'm just going to give you,

       7      I guess this is Exhibit B of this hearing, but this

       8      is the text from a text message you received from

       9      the same agent.

      10             Would you mind just reading that?

      11             RICHARD HELLING:  Sure, sure.

      12             And also, just to clarify, that the "Newsday"

      13      team were handling all the text messages at this

      14      point.

      15             I wasn't the one who was handling that --

      16             SENATOR KAVANAGH:  Oh, I see.

      17             You didn't receive it?  You were -- you

      18      were --

      19             RICHARD HELLING:  -- no, no.

      20             They were doing it on my behalf, as part of

      21      the test.

      22             SENATOR KAVANAGH:  Got you.

      23             RICHARD HELLING:  So...

      24             "Remarks made to White tester, agent in a

      25      text message:







                                                                   239
       1             "Hi, Dean.

       2             "You may want to look into recent gang

       3      killings in the Brentwood area online.

       4             "As mentioned, please kindly do some research

       5      for the gang-related events in that area, for

       6      safety."

       7             SENATOR KAVANAGH:  So how do you interpret

       8      that message relative to what was given to the --

       9      the other tester in this pairing?

      10             RICHARD HELLING:  It's disgusting.

      11             I mean, she's -- she's warning me about

      12      something that she didn't share with my counterpart.

      13             SENATOR KAVANAGH:  Fair to say you're not

      14      getting the message that they're the nicest people

      15      over in Brentwood?

      16             RICHARD HELLING:  That would be the message.

      17             I mean, if -- if I were an actual buyer and

      18      looking at this, I would pause, thinking, you know,

      19      even though part of that test was, I wanted to be in

      20      a specific area near to Brentwood.

      21             So that was -- and -- and she was -- looked

      22      like she was steering me away from Brentwood.

      23             SENATOR KAVANAGH:  Okay.

      24             Again, thank you.

      25             I don't know if we have any other?







                                                                   240
       1             Again, I'd just like to thank you for your

       2      participation today.

       3             And, also, your participation was incredibly

       4      important to the investigation.

       5             We really appreciate it.

       6             RICHARD HELLING:  Thank you very much.

       7             JOHNNIE MAE ALSTON:  Okay, thank you.

       8             SENATOR THOMAS:  All right, next up we have

       9      Panel 5.

      10             We have Kimberly Kinirons from the New York

      11      State Attorney General's Office, Suffolk Regional

      12      Office;

      13             We have Theresa Sanders, president of the

      14      Urban League, Long Island;

      15             And, Lorraine Collins, director of public

      16      policy and external affairs at Enterprise Community

      17      Partners.

      18             Welcome.

      19             Before you start -- before everyone starts,

      20      can all three please stand up?

      21             They're not paying attention.

      22             Can all three please stand up, please?

      23             Raise their right hand.

      24             Do you testify -- do you solemnly swear that

      25      you will tell the truth, the whole truth, and







                                                                   241
       1      nothing but the truth?

       2                [All three witnesses say "Yes."]

       3             SENATOR THOMAS:  All right.

       4             Take a seat.

       5             You may start.

       6             KIMBERLY A. KINIRONS:  Good afternoon,

       7      Chairs Skoufis, Kavanagh, and Thomas, as well as

       8      every other distinguished person who remains at this

       9      time.

      10             My name is Kimberly Kinirons.  I'm an

      11      assistant attorney general in charge of the Suffolk

      12      regional office of the attorney general,

      13      Letitia James.

      14             As you're aware, and as has been mentioned

      15      earlier today, our office has already announced an

      16      investigation into the allegations of discriminatory

      17      practices here on Long Island by real estate agents

      18      which are the subject of today's hearing.

      19             For that reason, I'm somewhat limited in what

      20      I'm able to say today; however, we wanted to make

      21      clear that the office of the attorney general takes

      22      these allegations seriously, and we look forward to

      23      working with all of you, and all of the players,

      24      that can help address these issues.

      25             We look forward to bringing changes, and







                                                                   242
       1      finding the appropriate set of remedies.

       2             Our office held a roundtable discussion

       3      in Melville on December 2nd, where

       4      Attorney General James and our staff had the

       5      opportunity to hear from elected officials,

       6      advocates, business leaders, and others, some of

       7      whom have come before you today.

       8             The consensus was, that while these

       9      allegations are disturbing, they are far from

      10      surprising.  Long Island remains one of the most

      11      segregated areas in the country.

      12             However, we also saw at the roundtable, the

      13      commitment, and the will, to make a real change.

      14             It is in that spirit that I'm here before you

      15      today.

      16             The civil rights bureau of the New York State

      17      Attorney General's Office enforces laws that protect

      18      all New Yorkers from discrimination in housing based

      19      on race, color, or national origin, including the

      20      Fair Housing Act and the New York State Human Rights

      21      Law.

      22             These laws generally prohibit agents from

      23      making statements about the racial makeup of a

      24      community, or providing disparate services based on

      25      a customer's race or ethnicity.







                                                                   243
       1             If your constituents have experienced such

       2      discrimination, we hope you will urge them to

       3      contact our office.

       4             We've prepared some cards that perhaps can be

       5      given out if anybody is spurred on by everything

       6      that's going on, and comes in and does wish to make

       7      a complaint.

       8             Fair access to housing is a basic civil right

       9      that all New Yorkers, including Long Island

      10      residents, are entitled to.

      11             The pattern of discrimination uncovered by

      12      "Newsday's" reporting is deeply disturbing and calls

      13      for decisive action.

      14             Along with our ongoing investigation, we look

      15      forward to working with you, and the rest of the

      16      Legislature, to find measures to better prevent such

      17      discrimination, going forward.

      18             To be clear, housing discrimination is not

      19      unique to Long Island.

      20             Just last week, our office took action to

      21      fight discriminatory housing practices that have

      22      occurred in the town of Chester and Orange County.

      23             In the town of Chester and Orange County,

      24      there are actions that have been utilized to prevent

      25      members from the Jewish community from moving into







                                                                   244
       1      that area.

       2             Attorney General James filed a motion to

       3      intervene in a lawsuit against the Town of Chester

       4      and Orange County, alleging that they have engaged

       5      in a concerted and systematic effort to prevent

       6      Hasidic Jewish families from moving to Chester by

       7      blocking the construction of a housing development.

       8             The original lawsuit that was filed in

       9      July 2019 outlined countless discriminatory and

      10      unnecessary actions that Chester and Orange County

      11      had taken to stop the homes from being built, in

      12      order to prevent Jewish families from purchasing and

      13      occupying them, which we allege constitute gross

      14      violations of the Fair Housing Act.

      15             Now, more than ever, our state must step up

      16      and fight this pernicious sort of discrimination,

      17      which bars New Yorkers from accessing a basic human

      18      right, based on fundamental identity.

      19             Over the past three years, the federal

      20      government has dramatically curtailed its

      21      enforcement of fair-housing laws, freezing fair

      22      Housing Act actions against local governments and

      23      businesses, and suspending a rule that would have

      24      required cities and towns that get federal funding

      25      to look at housing patterns for signs of racial bias







                                                                   245
       1      and discrimination.

       2             In recent months, Attorney General James led

       3      a coalition of 22 attorneys general in fighting

       4      back a rule change that would have all but

       5      eliminated disparate impact investigations under the

       6      Fair Housing Act.

       7             The current rule protects against

       8      discriminatory housing and lending practices that

       9      have the effect of harming individuals based on

      10      their race, color, religion, national origin, sex,

      11      disability, and familial status.

      12             The proposed changes would create uncertainty

      13      and make it harder for states to ensure equal

      14      housing opportunities for all Americans.

      15             In this case, as in others, we will do

      16      everything in our power under the law to protect the

      17      civil rights of New Yorkers, and ensure that no one

      18      is denied housing based on their personal

      19      background.

      20             We know that we have strong partners in the

      21      Legislature with whom we will work to protect

      22      against the type of discrimination that's the

      23      subject of this hearing.

      24             We look forward to working with you to ensure

      25      that these wrongs are righted, and that New Yorkers







                                                                   246
       1      all across this state are safeguarded against such

       2      bias, going forward.

       3             I thank you for giving me the opportunity to

       4      speak today, and for holding this hearing.

       5             SENATOR THOMAS:  Thank you.

       6             Theresa.

       7             THERESA SANDERS:  Thank you to the Chairs,

       8      Senator Kavanagh, Senator Skoufis, and

       9      Senator Thomas.

      10             Thank you for having us here, and to everyone

      11      that took time out of their schedule to attend this

      12      important hearing.

      13             I want to take this opportunity to share my

      14      views, channeling over 25 years of experience as the

      15      president and CEO of the Urban League of

      16      Long Island, and 13 years as a history professor at

      17      State University of New York, College at

      18      Old Westbury, and a resident of Long Island for the

      19      past 56 years.

      20             I was born in Harlem, New York, and my

      21      introduction to Long Island was in 1963, where my

      22      father, an NYPD officer, enlisted in the Navy, and

      23      moved his family from Harlem to a military base in

      24      East Meadow called Mitchell Field.  I was enrolled

      25      in Bottomwood Elementary School in East Meadow.







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       1             And it was a turbulent time in America, with

       2      the Civil Rights Movement for racial justice gaining

       3      support from a broader sector of Americans, while,

       4      at the same time, facing resistance from those

       5      indoctrinated with an ideology that there is a White

       6      race that is superior to all races and cultures,

       7      and, therefore, should have access at the expense of

       8      others to the basic of all human rights, such as

       9      safe and clean housing, quality education and health

      10      care, and access to engagement in voting, and other

      11      basic constitutional rights, without the fear of

      12      intimidation, violence, or incarceration.

      13             While racism is morally unethical, it also

      14      has an economic impact on everyone.

      15             In the "Equity Profile of Long Island,"

      16      released in 2017 by the State of Black Long Island

      17      Equity Council, with the membership of Black leaders

      18      and others fighting racism, the region's economic

      19      economy would have been nearly $24 billion stronger

      20      if its racial gaps in income had been closed.

      21             This report is available on the Urban League

      22      of Long Island website.

      23             To build a sustainable Long Island economy,

      24      public, private, and non-profit leaders across the

      25      region must commit to advancing policies and







                                                                   248
       1      strategies that increase health equity, wealth, and

       2      economic resilience for all Long Islanders.

       3             Relative to the topic at hand, it is

       4      important that I first reinforce for the Committee

       5      that the real -- the reality of Long Island is that,

       6      in 2019, we still remain one of the 10 most

       7      racially-segregated metropolitan regions in the

       8      United States of America.

       9             Severe racial segregation in housing and

      10      schools means that families live in racial

      11      isolation.

      12             As a result, there are very few occasions

      13      where residents from different racial groups can

      14      interact with one another.

      15             This, in my judgment, is tragic, yet all too

      16      common occurrence in modern America and in this

      17      multicultural world.

      18             To tackle destructural [sic] racism

      19      underpinning this segregation, last year the

      20      Urban League of Long Island partnered with a

      21      co-host, to co-host a Long Island-wide public

      22      discussion, "How Do We Build a Just Long Island?"

      23      which was launched by Erase Racism, who you heard

      24      from the CEO, Elaine Gross, earlier.

      25             This launch consisted of 5 public forums held







                                                                   249
       1      over 12 days in November and December in Nassau and

       2      Suffolk counties.

       3             The forums were co-hosted also by such

       4      leading institutions as the Long Island Association,

       5      The Center for the Study of Inequity Social Justice

       6      and Policy at Stony Brook University, the National

       7      Center for Suburban Studies at Hofstra Universities,

       8      the State of Black Long Island Equity Council, and

       9      the Town of Riverheads Anti-bias Task Force.

      10             In addition to this constructive dialogue

      11      that was generated through the forums, new evidence

      12      of structural racism and discrimination is

      13      documented on such a large and massive scale by this

      14      three-year investigation by "Newsday" that was

      15      published, the "Long Island Divided."

      16             And I won't go into the details about the

      17      investigation, because I believe you've heard it all

      18      today and -- from the authentic researchers and from

      19      the testers.

      20             And while the "Newsday" investigation found

      21      that these agents continue to steer Black

      22      Long Islanders, you know, I've had personal

      23      experience, not only as a fair-housing tester in the

      24      early '90s, when I worked for the Long Island

      25      Housing Partnership Services, residents had let







                                                                   250
       1      their dogs out on me in the yard or called me

       2      offensive names, but, also, this personal experience

       3      was when my father was discharged from the military

       4      and we were seeking to stay on Long Island.

       5             Although we were only a couple of miles away

       6      from Levittown, we were not shown homes in

       7      Levittown.

       8             My family used their GI bill, and they were

       9      steered to other communities on Long Island.

      10             Real estate steering on Long Island occurs

      11      when homeseekers are guided by housing providers to

      12      communities where their race is already highly

      13      concentrated.

      14             So as people of color channel to integrated

      15      or predominantly non-White neighborhoods, and Whites

      16      are shown homes primarily in White communities, this

      17      steering contributes directly to the segregated

      18      housing patterns that have long persisted in urban

      19      and suburban communities, and the many causes

      20      associated with that separation.

      21             From my organization's experience, steering

      22      on Long Island has historically taken several forms:

      23             "Information steering," which occurs when

      24      minority homeseekers are shown or given information

      25      on fewer homes or neighborhoods that non-White --







                                                                   251
       1      I mean, than non-minority homeseekers;

       2             "Segregation steering," which occurs when

       3      minorities are shown homes in areas with large

       4      minority populations;

       5             And "class steering," which occurs when

       6      neighborhoods shown to minority homeseekers are of

       7      lower socioeconomic status than those shown to

       8      non-minorities.

       9             New evidence of this discriminatory patterns

      10      unearthed by "Newsday" concluded that several actors

      11      in the housing industry actively engaged in

      12      steering.

      13             Mortgage lenders, insurance agents, often

      14      provide less information, and offer fewer and more

      15      expensive and lower-quality products to non-White

      16      households or residents of non-White communities

      17      than they do for Whites in predominantly White

      18      communities.

      19             These practices influenced the location and

      20      range of housing options for minority families;

      21      however, racial steering is most closely associated

      22      with the practices of real estate agents, who are

      23      often the gateway to housing opportunities, which

      24      often differ for White and non-White families.

      25             You will shortly hear, and have heard,







                                                                   252
       1      corroborating evidence of this today.

       2             From my vantage point, racial steering has

       3      been motivated by several factors.

       4             Real estate agents on Long Island generally

       5      serve selected neighborhoods and rely heavily on

       6      word-of-mouth advertising to recruit new clients.

       7             Many fear loss of business if they introduce

       8      a minority family into a White neighborhood.

       9             Historically, some agents feared strong

      10      repraisals [sic] from area residents if they

      11      introduced the household that would have been

      12      detrimental and have a detrimental effect on home

      13      values.

      14             Some maintain they are simply responding to

      15      the preference of renters and buyers who prefer to

      16      live in neighborhoods that look and feel just like

      17      them.

      18             If overt racial discrimination has declined

      19      in recent years across the nation, the more subtle

      20      variety, in the form of racial steering, clearly

      21      persist at high levels in the nation's suburban and

      22      metropolitan communities, such as Nassau and Suffolk

      23      counties, and steering has increased.

      24             Steering, along with other forms of

      25      discrimination, contributes to the ongoing







                                                                   253
       1      segregation of American cities and many social

       2      costs.

       3             Segregation nurtures the concentration of

       4      poverty and, particularly, the concentration of

       5      people of color, as the values in the wealth

       6      accumulation associated with home ownership are

       7      undercut for racial minorities because of their

       8      continued isolation for more favored neighborhoods.

       9             Consequently, African-Americans and other

      10      people of color are disproportionately trapped in

      11      neighborhoods where school achievement is lower,

      12      crime rates are higher, and most public services and

      13      private amenities are of lower quality.

      14             Despite these clear and present headwinds,

      15      I am here to argue that consumer education and

      16      fair-housing enforcement is a solution, and it

      17      appears to be working.

      18             For example, in some areas, reductions in

      19      discrimination during the '90s suggest that

      20      efforts of HUD and other law enforcement

      21      authorities, along with the work of non-profit

      22      fair-housing organizations around the country, had

      23      the intended effect.

      24             During this period, lawsuits filed by

      25      non-profit housing centers generated more than







                                                                   254
       1      180 million for plaintiffs.  But the fair-housing

       2      agenda remains unfinished and is under attack at the

       3      federal level.

       4             Racial steering is clearly one of the issues

       5      that should be the focus of future enforcement

       6      efforts, persisting high levels of discrimination,

       7      even if lowered in previous years, indicate that

       8      equal housing opportunity through the law of the

       9      land is not yet to be reality on Long Island.

      10             To be perfectly clear, what propelled the

      11      infamous era of redlining, and the current status of

      12      predatory lending and other standard industry

      13      practices outlined by "Newsday," that produced

      14      discriminatory effects is, in fact, racism.

      15             But from the standpoint of industries, those

      16      policies and practices were, and remain, legitimate

      17      business decisions.  They are protecting investments

      18      and making a profit.

      19             Here is where the legislative and regulatory

      20      powers of New York State Legislature must focus.

      21             Similarly, local governments on Long Island

      22      and elsewhere have a major role to play, though we

      23      must also confront the fact that these units of

      24      local government historically protect their

      25      communities of primarily White residents by







                                                                   255
       1      systemically excluding Black people through housing

       2      policies that include geographic preferences.

       3             If you already live in a community, you can

       4      access affordable housing there.

       5             But if you live outside the community

       6      boundaries, you are denied.  The stated region --

       7      reason, is to give preference to existing residents.

       8             But given the existence of racial composition

       9      of current residents, this housing policy of

      10      geographic preferences is producing a discriminatory

      11      effect.

      12             This is but one form of the example.

      13             I wholeheartedly applaud the New York State

      14      Senate, through the Committee on Housing,

      15      Construction, and Community Development; the

      16      Committee on Investigations and Government

      17      Operations; and Committee on Consumer Protection,

      18      for holding this unique and urgent joint field

      19      hearing, and for documenting throughout the region a

      20      pattern of housing discrimination that can no longer

      21      be ignored.

      22             Its existence, it's proven.

      23             The question now is:  What will government,

      24      real estate, and civic leaders do?

      25             While "Newsday's" focus report on practices







                                                                   256
       1      of real estate industry, those practices intertwined

       2      with various policies and practices that produce and

       3      maintain residential segregation long established

       4      and perpetuated on Long Island.

       5             In my view, and in the view of the National

       6      Urban League, the obligation to ensure fair housing

       7      exists at all levels of government throughout the

       8      industry.

       9             The failure to do so exist in all those areas

      10      as well.

      11             Thank you for the opportunity to share my

      12      views and perspectives.

      13             I'm available to answer any questions you may

      14      have.

      15             SENATOR THOMAS:  Thanks, Theresa.

      16             Lorraine.

      17             LORRAINE Y. COLLINS:  Good afternoon.

      18             My name is Lorraine Collins, and I'm the

      19      director of public policy and external affairs for

      20      the New York office of Enterprise Community

      21      Partners, a national affordable-housing non-profit

      22      whose mission is to create opportunity for low- and

      23      moderate-income people through affordable housing in

      24      diverse, thriving communities.

      25             Enterprise invests capital to create and







                                                                   257
       1      preserve quality affordable homes, reinvest revenues

       2      to develop programmatic solutions, and scale these

       3      solutions through policy change.

       4             One of our organization's top priorities is

       5      advancing fair housing and racial equity through

       6      housing and community-development policies and

       7      programs.

       8             And as a national organization, Enterprise is

       9      committed to furthering fair-housing work across the

      10      country.

      11             On behalf of Enterprise, I would like to

      12      thank Chair Thomas, Chair Skoufis, and

      13      Chair Kavanagh for convening this hearing, and for

      14      the opportunity to testify today about the

      15      persistent housing discrimination facing people of

      16      color, especially Blacks and Hispanics, here on

      17      Long Island.

      18             While the recently reported findings of the

      19      "Newsday" investigation are appalling, they are not

      20      surprising, as you've heard.

      21             Residential segregation in the New York City

      22      metropolitan region remains among the most

      23      persistent in the country, and our local

      24      fair-housing partners have long understood the

      25      systemic barriers that some New Yorkers face when







                                                                   258
       1      trying to secure housing in the communities of their

       2      choice.

       3             As you are aware, most of the work of the

       4      affordable-housing industry has centered around

       5      multi-family development; however, Enterprise and

       6      many other organizations have overseen several

       7      homeownership programs over the years, since we

       8      believe in the importance of an array of housing

       9      options available to households of all incomes.

      10             Renters may eventually become homeowners, and

      11      homeowners transition to rental housing.

      12             We strive to improve the quantity and quality

      13      of options available in either scenario.

      14             In recent years, Enterprise has funded both a

      15      local community land trust and two land banks on

      16      Long Island.  Both programs provide affordable

      17      homeownership opportunities to Long Islanders who

      18      might not otherwise become homeowners.

      19             We continue to consider ways in which to

      20      deepen the equity considerations inherent in both

      21      programs, particularly through a racial-equity lens.

      22             Also in recent years, we have been engaged in

      23      work furthering fair-housing initiatives in a

      24      broader form of the housing industry in the

      25      New York City metro area and beyond.







                                                                   259
       1             In October 2017, Enterprise co-convened with

       2      the Fair Housing Justice Center, a regional,

       3      affordable, and fair-housing roundtable.

       4             A dynamic working group comprised of nearly

       5      30 affordable-housing, fair-housing,

       6      disability-rights, community-development, education,

       7      faith-based, and for-profit and non-profit,

       8      organizations.

       9             Three of the participating organizations are

      10      based on Long Island, with several others engaged in

      11      business here.

      12             Over a yearlong process of deep discussions,

      13      immense trust-building, and cross-sector education,

      14      the roundtable published "Closing the Divide:

      15      Creating Equitable, Inclusive, and Affordable

      16      Communities," a shared-policy agenda, highlighting

      17      several recommendations for further fair housing in

      18      the region and statewide.

      19             This process underscored that

      20      facially-neutral land-use barriers, like

      21      exclusionary zoning, have also historically been

      22      used to maintain racial residential segregation, an

      23      issue that our partners at Erase Racism and

      24      Long Island Housing Services have been battling.

      25             Today, these barriers keep communities







                                                                   260
       1      segregated by effectively preventing families of

       2      color from accessing housing opportunities in many

       3      areas.

       4             Two policy recommendations, some of which

       5      were mentioned earlier today, the group highlighted,

       6      to try to stimulate more development of affordable

       7      housing in affluent White neighborhoods in suburban

       8      communities, were creating a statewide

       9      equitable-share housing plan and a housing appeals

      10      board.

      11             The equitable-share housing plan would

      12      establish a minimum affordable housing goal for

      13      every community in the state, offering financial

      14      incentives to develop housing that reaches lower

      15      income bands, as well as supportive in accessible

      16      housing.

      17             A state-level housing appeals board would

      18      have the authority to override local zoning

      19      decisions in the face of local opposition to

      20      affordable developments and fast-track proposals

      21      that have zoning as of right.

      22             This could include both affordable rental and

      23      affordable homeownership developments.

      24             Members of the roundtable were part of a

      25      successful campaign to address discrimination







                                                                   261
       1      experienced by many New York State residents who

       2      attempt to use non-wage sources of income to pay for

       3      their rent.

       4             This discrimination is pervasive, and is

       5      often used as a proxy for racial or disability

       6      discrimination.

       7             This year, the Statewide Source of Income

       8      Coalition, which was started by Erase Racism, and is

       9      now co-lead by Enterprise, successfully advocated to

      10      expand statewide protected classes to include lawful

      11      source of income, and prohibit discrimination

      12      against tenants using non-wage income to pay for

      13      housing.

      14             However, legislation is not enough to protect

      15      individuals and families from housing

      16      discrimination.

      17             We are now shifting our efforts to advocating

      18      for enforcement and education resources.

      19             The State does not currently fund

      20      fair-housing groups to carry out their housing

      21      activity, and as you now see, these resources are

      22      desperately needed.

      23             During the summer of 2016, Enterprise

      24      partnered with the local design studio, designing

      25      the WE, to bring their exhibit, which highlights the







                                                                   262
       1      federal -- a major federal housing policy whose

       2      impact still lingers today.

       3             "Undesign the Redline" is an interactive

       4      exhibit connecting the intentional and systemic

       5      racial housing segregation of the 1930s to political

       6      and social issues of today through powerful

       7      narratives of the people and communities affected by

       8      the redlining and its legacy.

       9             The exhibit invites participants to interact

      10      with its -- with this history and these stories to

      11      invent the future of undoing structural inequities.

      12             Since its Enterprise debut over two years

      13      ago, the exhibit has been displayed at all of our

      14      regional market offices, and returned to New York

      15      this year, with a focus on the New York City

      16      metropolitan area.

      17             Given the profound impact that redlining has

      18      had on housing on Long Island, the exhibit

      19      establishes critical grounding for work in equitable

      20      housing policy, highlighting local stories, such as

      21      "The Creation of Levittown."

      22             We are challenging those who have the

      23      "Undesign the Redline" experience to go beyond just

      24      educating -- or, just being educated about the

      25      historic facts that not only divided our communities







                                                                   263
       1      and intentionally demobilized wealth-building

       2      opportunities for Blacks, but to consider ways in

       3      which corporations can operate differently,

       4      community-development corporations can engage more

       5      strategically, and elected officials can enact

       6      policies that will help to undo, or "undesign,"

       7      redlining.

       8             Enterprise hosted members of both the state

       9      Senate and Assembly housing committees for a tour

      10      and post-tour discussion earlier this fall.

      11             And I'm happy to report that leadership has

      12      expressed an interest in bringing "Undesign the

      13      Redline" to Albany in 2020, and this was before the

      14      "Newsday" investigation.

      15             If this is some of the good that can come out

      16      of the reporting, I am more hopeful that we can all

      17      work together to ensure that more of your colleagues

      18      and New York State residents and guests can be

      19      educated about this history, and can participate in

      20      the "undesign" challenge.

      21             In closing:

      22             I would like to thank you again for the

      23      opportunity to testify here today.

      24             The systemic forms of housing discrimination

      25      can only be addressed through policies that will







                                                                   264
       1      attempt to get at the root of the discriminatory

       2      practices, and investment in fair housing and civil

       3      rights organizations.

       4             More strategic proactive enforcement methods,

       5      such as testing, are required to root out the

       6      housing discrimination we see today, as proven by

       7      the "Newsday" investigation.

       8             I am happy to answer any questions, and

       9      I look forward to working with you to ensure that,

      10      after years of illegal, unequal treatment and

      11      disinvestment, all people in New York, especially

      12      those who bore the biggest brunt of the

      13      discriminatory burden, will have access to safe,

      14      affordable housing, whether they are a renter or a

      15      homeowner.

      16             Thank you.

      17             SENATOR THOMAS:  Thank you to all three for

      18      your testimony.

      19             My first round of questions is for Kimberly

      20      from the attorney general's office.

      21             So when an agency, like the attorney

      22      general's office, gets involved in fair-housing

      23      discrimination cases, what is the process?

      24             KIMBERLY A. KINIRONS:  So I can only speak

      25      generally --







                                                                   265
       1             SENATOR THOMAS:  Yeah, of course.

       2             KIMBERLY A. KINIRONS:  -- obviously, because

       3      we have an ongoing investigation.

       4             SENATOR THOMAS:  Uh-huh.

       5             KIMBERLY A. KINIRONS:  But, at this

       6      juncture --

       7             SENATOR THOMAS:  Can you speak into the mic?

       8             KIMBERLY A. KINIRONS:  This one?

       9             SENATOR SKOUFIS:  Yeah, they're dual mics.

      10             KIMBERLY A. KINIRONS:  You got me twice.

      11             Okay.

      12             At this juncture, like any investigation, we

      13      begin by collecting information.

      14             And so that -- that is a process that

      15      sometimes can take some time, to both collect the

      16      information, and then carefully review the

      17      information, and then decide what actions can be

      18      taken.

      19             I know that's a broad response, but that's

      20      the general footprint of opening an investigation.

      21             SENATOR THOMAS:  In the past year, how many

      22      of these investigations have you started?

      23             KIMBERLY A. KINIRONS:  You know, I don't know

      24      the answer to that question.

      25             We have a bureau that is specifically







                                                                   266
       1      designated, staffed with attorneys and staff

       2      members, just to work on civil rights cases.

       3             I run the regional office.  And while we

       4      partner with them to address those issues, it's not

       5      information that I have at hand.

       6             I'm certain it's something I can you, but

       7      I do not know the answer.

       8             SENATOR THOMAS:  Just a few panels ago we had

       9      Fred Freiberg, the co-founder of the Fair Housing

      10      Justice Center, testify that he worked along with

      11      the AG's office to create the testing.

      12             Are you familiar with the testing part of

      13      this?

      14             KIMBERLY A. KINIRONS:  I'm familiar with what

      15      I learned from the "Newsday" investigation, and the

      16      use of testers in other situations.

      17             But what he referred to, I don't have

      18      personal knowledge of.

      19             SENATOR THOMAS:  Okay.  Do you know, within

      20      the past year, how many testers went out from the

      21      AG's office?

      22             KIMBERLY A. KINIRONS:  I don't know the

      23      answer to that question, I'm sorry.

      24             SENATOR THOMAS:  Does the agency at least

      25      conduct similar tests to what "Newsday" did, in the







                                                                   267
       1      past three years?

       2             KIMBERLY A. KINIRONS:  Again, I'm going to

       3      cautiously say yes, because I'm aware, broadly, of

       4      investigations that our civil rights bureau has done

       5      in the past.

       6             In other areas, and we do use investigators

       7      and certain type of testing mechanisms.

       8             But I can't answer as to what's been done

       9      recently.

      10             Again, I'm not in the civil rights bureau,

      11      but I do know that that is something that's very

      12      valuable, and it's a tool used in investigations if

      13      warranted.

      14             SENATOR THOMAS:  Okay.

      15             The next couple of questions are for Theresa

      16      and Lorraine.

      17             Were you here for the testimony of both the

      18      county executives?

      19             THERESA SANDERS:  Yes.

      20             LORRAINE Y. COLLINS:  I was en route.

      21             SENATOR THOMAS:  Okay, you were en route.

      22             But maybe Theresa can answer this question.

      23             They talked about some policy changes, and

      24      what they're going to be doing now.

      25             What's your opinion?







                                                                   268
       1             Are they going far enough?

       2             Do you recommend that they do more?

       3             THERESA SANDERS:  Well, I'm hopeful that this

       4      has garnered so much attention, that they're in a

       5      position that they have to respond to their

       6      constituents.

       7             I'm a little more closer to what happened in

       8      Suffolk.  Our SOBLI counsel has been meeting with

       9      the county executive for several months about the

      10      SOBLI agenda, and how we can improve the economic

      11      condition of Black Long Islanders, based on the

      12      baseline data that we provided in our report.

      13             So as a result of that, he's put together

      14      some things that I believe are going to be helpful

      15      in sustaining any efforts of making sure, not only

      16      in the real estate market that we have equity, but

      17      in other markets.

      18             SENATOR THOMAS:  Okay.

      19             Lorraine, in your testimony, you basically

      20      said legislation is not enough.

      21             I may have missed this, but what more can we

      22      do as legislators here?

      23             LORRAINE Y. COLLINS:  I'll use the source of

      24      income as an example.

      25             I think, during our expert panel with Fred







                                                                   269
       1      and Elaine, they made reference to it as well, and

       2      by "legislation being not enough," meaning that

       3      enforcement has to come with legislation.

       4             It's not enough just to pass a law, and the

       5      law sit on the books, if there aren't resources that

       6      are going to be provided to the enforcing agencies

       7      to ensure that the law is effectively being

       8      implemented.

       9             SENATOR THOMAS:  Okay.

      10             Senator Kavanagh.

      11             SENATOR KAVANAGH:  Thank you.

      12             Again, I'm not sure if you can answer this on

      13      behalf of the attorney general's office, but, is

      14      the -- is the investigation -- is it -- has it been

      15      established whether the investigation that you're --

      16      that are in the preliminary stages is a criminal

      17      investigation or civil investigation, or potentially

      18      both?

      19             KIMBERLY A. KINIRONS:  I can't answer that.

      20      It is an ongoing investigation.

      21             I can tell you that, generally speaking, when

      22      we look at some type of misdeed, we consider all of

      23      our options, which usually encompass both criminal

      24      and civil options.

      25             SENATOR KAVANAGH:  Okay.  And, again, if you







                                                                   270
       1      can answer, has -- have subpoenas been issued in the

       2      course of this current investigation?

       3             KIMBERLY A. KINIRONS:  That, I can't answer.

       4             SENATOR KAVANAGH:  I guess, for Ms. Collins,

       5      first of all, I did have the opportunity to view the

       6      redlining exhibit, and found it, you know, very --

       7      it was a very compelling story.

       8             And although I'm somewhat familiar with that

       9      history and that issue, it really -- it really was

      10      eye-opening in many respects.

      11             So, you know, thank you for that, and for my

      12      colleagues who are working on bringing that exhibit

      13      to Albany sometime during the session, so that

      14      people will have an opportunity to view it there.

      15             Can you just talk about -- you mentioned, you

      16      know, you've been involved in this coalition that

      17      was discussed earlier as well, to get

      18      source-of-income discrimination to be one of the

      19      protected for -- sort of, illegal forms of

      20      discrimination in New York.

      21             Can you just talk about how discrimination,

      22      based on income, and other factors, intersects with

      23      discrimination and race and ethnicity, in your view?

      24             LORRAINE Y. COLLINS:  Yes, certainly.

      25             Well, oftentimes, when we hear "source of







                                                                   271
       1      income" or "non-wage income," some of the items that

       2      initially come to mind are Section 8 voucher

       3      holders, although there is an array of different

       4      types of non-wage incomes, whether it's social

       5      security, spousal support, child support.

       6             With the Section 8 voucher holder and that

       7      rental assistance, oftentimes what comes with that

       8      is a negative perception.

       9             Oftentimes what comes with that is an idea

      10      of, okay, when I say "Section 8 voucher holder," who

      11      am I thinking of in the back of my mind?

      12             And, quite frankly, oftentimes it's the image

      13      of a single Black woman, who is uneducated, not

      14      working, with multiple children.

      15             And although that may be an experience, or

      16      there may be someone who fits that mold, that isn't

      17      the full, because there's also the single Black

      18      woman, who is a divorc�e, who is educated, who is

      19      working, but still needs the supplemental support.

      20             And so, with Section 8, it's often,

      21      "those people."

      22             I don't want "those people" in my

      23      neighborhood.  So, if there's a way to get around,

      24      you know, specifically directing to race and

      25      ethnicity, I'll use another route, and that other







                                                                   272
       1      route being the rental assistance.

       2             From a disability perspective, they're

       3      similar.

       4             So, without saying "I don't want someone with

       5      a physical disability in my building," I'll get

       6      around that by saying, oh, well, I don't accept this

       7      type of non-wage income.

       8             SENATOR KAVANAGH:  Thank you.

       9             And you mentioned, and I'm somewhat familiar

      10      with the work that, you know, Enterprise was

      11      involved in convening this broader group of

      12      stakeholders, to talk about access and fair-housing

      13      issues, and produced the report you mentioned.

      14             I -- again, I'm somewhat familiar with the

      15      report, but just to refresh my recollection:  Were

      16      there -- were realtors or real estate agents or

      17      their representatives involved in that process?

      18             LORRAINE Y. COLLINS:  No.

      19             So for the members of the roundtable,

      20      primarily, the executive directors of organizations

      21      that fit one of the buckets that I made reference

      22      to.  So, either affordable housing, fair housing,

      23      civil rights, the disability community, education,

      24      LGBTQ, seniors.

      25             So it was, primarily, that was our target







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       1      audience in getting -- you know, pulling together to

       2      work on this process.

       3             However, at the end of our initial year,

       4      together, we did hold a summit, which we extended an

       5      invitation to a much broader group, and held a

       6      summit of upwards of five -- or, 400 participants,

       7      which some of them I think were real estate agents.

       8             I know we had extended an invitation to local

       9      officials as well.

      10             SENATOR KAVANAGH:  And is there a follow-up

      11      that's coming from that -- that was sort of a

      12      presentation of the work that had been done by the

      13      initial roundtable.

      14             Is there sort of a -- sort of a follow-up

      15      report, or sort of subsequent recommendations, that

      16      are coming from that sort of broader airing of the

      17      issues?

      18             LORRAINE Y. COLLINS:  Yep.

      19             Well, for 2019, several members of the

      20      roundtable were engaged, in some form or fashion, in

      21      the tenant protection laws that were passed.

      22             SENATOR KAVANAGH:  Yes, they were.

      23             LORRAINE Y. COLLINS:  So whether it was

      24      specific to SOI or to the Tenant Protection Act.

      25             And what we are now in the process of doing,







                                                                   274
       1      is pulling together our 2020 policy priorities,

       2      which will also include tenant protections, but is

       3      going to touch into some of the exclusionary zoning

       4      areas, and increasing density, that I mentioned

       5      earlier.

       6             SENATOR KAVANAGH:  Great.

       7             Well, it's been a long day, so I know we have

       8      another panel of witnesses, and I'll keep my

       9      questions short.

      10             But, just, thank you to all of you for the

      11      work you do, you know, for being here today, and

      12      also the work you do every day, to ensure that

      13      fairness is the norm throughout our housing markets.

      14             Thanks.

      15             SENATOR THOMAS:  Last set of questions from

      16      Senator Kaminsky.

      17             SENATOR KAMINSKY:  Hi, Ms. Sanders.

      18             Thank you for being here today, and for

      19      your -- for your compelling testimony.

      20             Could you tell us what you'd like, whether in

      21      broad stokes or in detail, up to you, what would you

      22      like the members sitting in front of you today to do

      23      when we get up from this hearing?

      24             THERESA SANDERS:  Support the funding of

      25      consumer education.







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       1             I hear a lot about education for realtors and

       2      the bankers.

       3             But I really believe the strength lies with

       4      the consumer, so that they understand what their

       5      rights are, so that they can recognize the

       6      discrimination when they're going into a situation.

       7             And then the second one is the enforcement,

       8      so that, if there is a report, that there's

       9      something punitive that happens, because people will

      10      continue their behavior if they think nothing will

      11      happen.

      12             SENATOR KAMINSKY:  Okay, so that -- and that

      13      and -- that -- you would like that to be the main

      14      focus?

      15             THERESA SANDERS:  Yep, consumer education,

      16      and enforcement.

      17             SENATOR KAMINSKY:  Okay.

      18             And how do you feel about the comments

      19      before, about requiring more education within the

      20      companies, self-testing within the companies, and

      21      just a mandatory training regimen or ethics regimen,

      22      that you would think happens in most of corporate

      23      America, but has obviously missed this -- missed

      24      this industry?

      25             THERESA SANDERS:  You know, I'm a history







                                                                   276
       1      professor, so, historically, the outcomes of

       2      self-monitoring are not that great.

       3             And it's nice to ask people to monitor

       4      themselves, but I don't have that much faith,

       5      because, if you are a corporation or an industry

       6      making a lot of money, and if you do happen to

       7      uncover some malfeasance by your employees, who's

       8      going to go to the Senate or to a regulatory agency

       9      and go, look, this person in my company is doing

      10      this stuff?

      11             They're not, because they're ultimately

      12      responsible.

      13             SENATOR KAMINSKY:  So outside oversight is

      14      what's required?

      15             THERESA SANDERS:  Absolutely.

      16             SENATOR KAMINSKY:  Okay.

      17             Thank you very much.

      18             THERESA SANDERS:  Thank you.

      19             SENATOR THOMAS:  Thank you all.

      20             And go for our next panel.

      21             THERESA SANDERS:  Thank you.

      22             AUDIENCE MEMBER:  [Inaudible comments.]

      23             SENATOR KAVANAGH:  So there are two

      24      microphones here.  I think one is feeding the --

      25             AUDIENCE MEMBER:  [Inaudible comments.]







                                                                   277
       1             OFF-CAMERA SPEAKER:  [Indiscernible] talking

       2      about, you're very hard to hear.

       3             SENATOR KAVANAGH:  Oh, the senators are hard

       4      to hear.

       5             Is that better?

       6             AUDIENCE MEMBER:  Yes.  [Inaudible comments.]

       7             SENATOR KAVANAGH:  Okay.

       8             I was duped by there being a second mic, and

       9      I thought one -- I thought they were both working

      10      equally.

      11             But I appreciate [indiscernible] your

      12      mentioning that.

      13             All right, so, first of all, before we begin,

      14      if you could raise your right hand.

      15             If you want to stand.

      16             Do you swear or affirm to tell the truth, the

      17      whole truth, and nothing but the truth?

      18             MOSES SEURAM:  I do.

      19             DUNCAN MACKENZIE:  I do.

      20             SENATOR KAVANAGH:  Thank you.

      21             So you have, I think, prepared statements?

      22             DUNCAN MACKENZIE:  We do.

      23             MOSES SEURAM:  Yes.

      24             SENATOR KAVANAGH:  Why don't you begin.

      25             MOSES SEURAM:  Good afternoon, and thank you







                                                                   278
       1      for this opportunity to testify.

       2             My name is Moses Seuram, and I am the 2019

       3      president for the New York State Association of

       4      Realtors.

       5             In addition to serving as the NYSAR

       6      president, I'm a licensed real estate broker who

       7      lives and work in Queens.

       8             I am joined by Duncan MacKenzie, NYSAR CEO.

       9             NYSAR is a trade association with

      10      approximately 60,000 members statewide.

      11             We represent, roughly, 30,000 members in the

      12      Long Island and the New York City metro area.

      13             Not all real estate licensees are realtors.

      14             We are a voluntary membership trade

      15      organization.

      16             We provide a variety of services to

      17      residential and commercial real estate brokers,

      18      real estate appraisers, and property managers.

      19             Every realtor member belongs to a local board

      20      of realtors; a state association of realtors, like

      21      NYSAR; and the National Association of Realtors.

      22             There is no room for illegal discrimination

      23      in the realtor community.

      24             As a condition of membership, every realtor

      25      subscribes to an industry-leading code of ethics and







                                                                   279
       1      must complete an ethics education program on a

       2      regular basis.

       3             NYSAR's statement of policy, which is

       4      reviewed and approved annually, clearly outlines

       5      where we stand on illegal housing discrimination.

       6             It reads as follows:

       7             "We believe that equal opportunity in housing

       8      is a fundamental right.  We oppose all illegal

       9      discrimination."

      10             If there is one message we want to convey to

      11      you today, it is this:

      12             We are appalled by the action reported by

      13      "Newsday," involving real estate licensees.  And

      14      NYSAR wants to work with New York State to be part

      15      of the solution, moving forward.

      16             So how can we help?

      17             First, you know -- first you should know,

      18      that NYSAR has a long history of fighting against

      19      illegal housing discrimination.

      20             In 2006, NYSAR was the primary advocate for

      21      requiring fair-housing education as a core learning

      22      module.

      23             That year NYSAR won legislative and

      24      gubernatorial approval that three hours of

      25      State-mandated continuing education training be







                                                                   280
       1      dedicated to the topic of -- topic as a requirement

       2      of license renewal.

       3             The law became effective in 2008.

       4             In 2010, NYSAR was one of the first state

       5      association in the country advocate for sexual

       6      orientation to be protect -- protective class in the

       7      realtor code of ethics.

       8             That inclusion was finalized in 2011.

       9             In 2013, NYSAR helped lead the fight to add

      10      gender identity as a protective class in the realtor

      11      code of ethics.

      12             That inclusion was finalized in 2014.

      13             During 2016 and 2017, NYSAR pushed for the

      14      inclusion of three hours of advanced fair-housing

      15      and fair-lending training to the real estate broker

      16      qualifying course.

      17             The revised curriculum became effective in

      18      2018.

      19             In 2019, NAR's [sic] code of ethics was

      20      amended to prohibit brokers from refusing to

      21      cooperate with other brokers on the basis of a

      22      broker's race, color, religion, sex, handicap,

      23      familiar [sic] status, national origin, sexual

      24      orientation, or gender identity.

      25             As a state realtor association, NYSAR's







                                                                   281
       1      primary role on the topic of fair housing is member

       2      education, and legislative and regulatory advocacy.

       3             Providing educational opportunity for the

       4      realtor membership is a primary goal of NYSAR and

       5      the Long Island Board of Realtors.

       6             We both independently and jointly offer

       7      courses on real estate-related matters.

       8             Upon learning about the "Newsday" report,

       9      NYSAR took immediate action.

      10             We suspended NYSAR-sponsored classes taught

      11      by independent contractors course instructors.

      12             We then set a new requirement, that any

      13      instructor wanting to teach fair housing in the

      14      future must complete a comprehensive retraining

      15      program.

      16             The retraining will be provided by

      17      fair-housing organization from across the state and

      18      who are totally independent of the realtor

      19      community.

      20             We are also undertaking a comprehensive

      21      retraining effort that will be available to realtor

      22      members, including managers, brokers, and

      23      local-board course instructors.

      24             Looking forward, one area where NYSAR would

      25      recommend proactive action, and, indeed, have been







                                                                   282
       1      advocating for it since 1992, is battling the end

       2      discrimination in the purchase and sale of co-ops.

       3             Today, New York law provides co-op board the

       4      ability to unfairly deny housing opportunity to

       5      persons deemed undesirable by simply taking no

       6      action on valid purchase applications.

       7             Nothing in current law requires a response to

       8      an applicant from a co-op board.

       9             When an applicant is denied the ability to

      10      purchase a unit, nothing requires the co-op board to

      11      provide a reason.

      12             To address this opportunity of illegal

      13      discrimination, NYSAR has advocated for legislative

      14      en -- legislation entitled "The Fairness and

      15      Cooperative Homeownership Act."

      16             This legislation will significantly improve

      17      the transparency of the cooperative-purchase process

      18      to the benefit of all parties.

      19             It adds uniformity and predictability to the

      20      application procedures.

      21             The Senate passed this legislation in 2016,

      22      59-to-2, and we urge its passing again in 2020.

      23             NYSAR strongly supports the Long Island Board

      24      of Realtors' investigation of those members

      25      identified by "Newsday".







                                                                   283
       1             If any member is found to have violated the

       2      realtor code of ethics, the member can face

       3      penalties that includes expulsion from our

       4      association.

       5             This is in addition to any disciplinary

       6      action initiated by governmental agencies.

       7             NYSAR also fully supports the action

       8      announced by Governor Cuomo on November 21st.

       9             We look forward to working with the

      10      New York State Division of Human Rights, Division of

      11      Human and Community Renewal, and Department of

      12      State, towards a shared goal in combating illegal

      13      discrimination.

      14             We will also participate in any continuing

      15      dialogue with the State and local lawmakers on this

      16      important matter.

      17             No effort should be spared to combat the

      18      scourge of illegal discrimination.

      19             Thank you again for the opportunity to

      20      testify, and I welcome any questions you may have.

      21             SENATOR KAVANAGH:  Thank you.

      22             So -- okay, so we just have one.

      23             Okay, I just wanted to make sure.

      24             Thank you.

      25             So can you just begin, so "Newsday" obviously







                                                                   284
       1      identified many people by name, who, apparently,

       2      participated --

       3             AUDIENCE MEMBER:  [Inaudible comment.]

       4             SENATOR KAVANAGH:  Let's try this again.

       5             Is that better?

       6             "Newsday" identified many people by name,

       7      who, apparently, participated in behavior that

       8      appears to be discriminatory.

       9             Are -- have you identified whether those are

      10      members of your association?

      11             DUNCAN MACKENZIE:  Yes, some of them are

      12      members.

      13             SENATOR KAVANAGH:  Okay.

      14             And -- just, also, you spoke about LIBOR and

      15      their investigation.

      16             Is LIBOR a component of NYSAR?

      17             Are they related, are they affiliated, in

      18      some way?

      19             DUNCAN MACKENZIE:  I would say "related" is a

      20      good way to put it.

      21             SENATOR SKOUFIS:  [Indiscernible] mic closer.

      22      Can you pull your mic closer?

      23             DUNCAN MACKENZIE:  This one?

      24             SENATOR SKOUFIS:  Yeah.

      25             DUNCAN MACKENZIE:  Okay.  Is that better?







                                                                   285
       1             Okay.

       2             I'd say "related" is a good word to use.

       3             So both NYSAR and LIBOR are, in essence,

       4      franchises of the national association.  We have

       5      charters with them.

       6             LIBOR has its own independent governance

       7      structure, as we do.

       8             So we work together on many things, but we

       9      are self-governed, as is LIBOR.

      10             SENATOR KAVANAGH:  And members of -- people

      11      might be members of LIBOR and also members of your

      12      association?

      13             DUNCAN MACKENZIE:  They all are.

      14             So if you are a realtor, to use that term

      15      "realtor," you must belong to a local board, the --

      16      a state association, and the national association.

      17             SENATOR KAVANAGH:  I see.

      18             So by definition, a member of LIBOR is also a

      19      member of your association?

      20             DUNCAN MACKENZIE:  That is correct.

      21             SENATOR KAVANAGH:  Okay.

      22             And you mentioned that you have suspended

      23      courses by independent contractors.

      24             Can you explain why you made that decision?

      25             DUNCAN MACKENZIE:  Yes.







                                                                   286
       1             We were concerned that -- that, from the

       2      report in "Newsday," that, perhaps, the courses were

       3      not being taught the way we would like them to be

       4      taught.

       5             We do not have a way at the present time to

       6      monitor them.

       7             So what we did is, decided we just wouldn't

       8      have any more classes dealing with fair housing

       9      until we could retrain all of our trainers.

      10             SENATOR KAVANAGH:  And is that statewide?

      11             DUNCAN MACKENZIE:  That's statewide.

      12             It's important to know, that, so, we have our

      13      own instructors for courses that we sponsor.

      14             The local boards will have, sometimes, their

      15      own instructors that they would sponsor.

      16             So these are only -- this will only apply to

      17      the instructors that we would be sponsoring for

      18      coursework.

      19             SENATOR KAVANAGH:  And you're distinguishing

      20      between independent contractors and -- and --

      21             DUNCAN MACKENZIE:  They're all independent

      22      contractors.

      23             All the instructors are not -- they're not

      24      employees of ours.  They're independent contractors.

      25             SENATOR KAVANAGH:  Okay.  So







                                                                   287
       1      [indiscernible] -- so when you say you suspended

       2      training offered by independent contractors, you're

       3      effectively saying, you suspended all training that

       4      your association is offering?

       5             DUNCAN MACKENZIE:  That deals with

       6      fair housing, yes.

       7             SENATOR KAVANAGH:  Okay.

       8             And can you -- have you done -- previous to

       9      the "Newsday" report, had you ever done an

      10      assessment of the quality of the training, the --

      11      the effectiveness at conveying the obligations of

      12      realtors, with respect to fair housing laws?

      13             DUNCAN MACKENZIE:  The only measurable that

      14      we use for our instructors is comments from the

      15      participants.

      16             So the instructor will collect a sheet at the

      17      end of each coursework, which will have an

      18      evaluation by the people taking the class.

      19             So, previously, that has been our only way of

      20      having a measurable of the classes.

      21             We also will have, where we can, a person

      22      from the local board sit in on the class, or at

      23      least part of it, to do part of the evaluation.  But

      24      they don't often stay from the beginning till the

      25      end.







                                                                   288
       1             At least that's my understanding.

       2             SENATOR KAVANAGH:  And those -- does that

       3      result in some sort of formal report to your

       4      association about the quality of what they -- at

       5      least what is witnessed in [indiscernible

       6      cross-talking] --

       7             DUNCAN MACKENZIE:  Correct.

       8             So those evaluations will help us decide if

       9      we will continue to employ those instructors in

      10      future.

      11             SENATOR KAVANAGH:  Did -- and so you've

      12      suspended it now.

      13             Is that -- that's for the purpose of

      14      retraining the trainers?

      15             DUNCAN MACKENZIE:  That's correct.

      16             SENATOR KAVANAGH:  Okay.  And then you -- is

      17      there a time where you expect to be relaunching

      18      training as a service that you're offering?

      19             DUNCAN MACKENZIE:  So we have our first

      20      retraining in February, and will hold several of

      21      them throughout the year.  So there will be a number

      22      of opportunities for trainers to go through the

      23      process that we think is necessary.

      24             SENATOR KAVANAGH:  And is training offered by

      25      your organization or the local affiliate -- the







                                                                   289
       1      local related organizations, in your view, the most

       2      common way in which realtors are receiving this --

       3      the -- the training that's required under state law?

       4             DUNCAN MACKENZIE:  Well -- so you're talking

       5      about for continuing education?

       6             Generally, our fair-housing education is for,

       7      we offer what they call "designations."

       8             So, realtors have an opportunity to get

       9      specialties, to have certain additional skills, to

      10      just being a licensee.

      11             And so we will teach fair housing as a

      12      component of what we call our "Graduate Realtor

      13      Institute," that may also be eligible for

      14      continuing-education value.

      15             But we don't often, ourselves, offer

      16      CE courses for fair housing.

      17             SENATOR KAVANAGH:  So to the extent LIBOR --

      18      I mean, there was -- there was -- the "Newsday"

      19      reporting on training indicated that, in many cases,

      20      present and former executives of LIBOR itself were

      21      the trainers.

      22             And, I mean, there was some very

      23      disturbing -- I want to keep this brief -- but there

      24      were some very disturbing assertions about what was

      25      going on in that training, including, in one case, a







                                                                   290
       1      trainer apparently telling a class that it's

       2      supposed to be about fair housing.  That, fair

       3      housing is sort of like being a taxi driver and

       4      speeding, and having a client who is late to get to

       5      the airport.  And, you know, it's your choice

       6      whether to speed; it's your choice whether to obey

       7      the law or not.

       8             Can you -- I mean, maybe just start by, can

       9      you comment on that as a -- assuming that is

      10      somebody who is a leader in your industry, how --

      11      just -- your feelings about reading that portion of

      12      the "Newsday" reporting?

      13             DUNCAN MACKENZIE:  We didn't think that was,

      14      obviously, a very effective way to teach fair

      15      housing.

      16             And that is part of the reason that we

      17      suspended our fair-housing education until we can

      18      retrain all of our educators.

      19             SENATOR KAVANAGH:  I just -- from my

      20      perspective, "ineffective" [sic] might be something

      21      of an understatement.

      22             DUNCAN MACKENZIE:  I wouldn't necessarily

      23      disagree, Senator.

      24             SENATOR KAVANAGH:  Okay.

      25             Do you believe, based on what you now know,







                                                                   291
       1      and your decision to suspend your courses, which are

       2      not -- not necessarily the core courses that people

       3      are required to take by law, that there are

       4      additional steps that state government and your

       5      industry ought to take to ensure the ongoing quality

       6      of the training that is -- that is offered, and --

       7      and is that -- that is the basis for realtors and

       8      others in the industry meeting their legal

       9      obligations to be trained?

      10             DUNCAN MACKENZIE:  We're open to that

      11      discussion, Senator, and it has been a relatively

      12      short period of time since the "Newsday" report.

      13             One of the things we've come here to tell

      14      you, is that we're willing to work with you on the

      15      solution; on what is the best way to educate

      16      licensees, not just realtors, but all licensees, on

      17      what the fair-housing laws are and how they should

      18      be following them.

      19             We also support the Senator's bill that was

      20      recently introduced, that would require a

      21      disclosure, a fair-housing disclosure, as part of

      22      the real estate process.

      23             So, we're really open to new ideas, and we're

      24      here to tell you that everything is on the table.

      25             We'd like to talk about how we can -- you







                                                                   292
       1      know, how we can solve this problem.

       2             SENATOR KAVANAGH:  And we had a conversation

       3      with Mr. Gorman earlier about the practices of NRT

       4      and its related companies.

       5             Does your association offer any kind of

       6      standard, any model policies, that you believe that

       7      participants in the industry ought to be adopting?

       8             DUNCAN MACKENZIE:  We don't have -- we have

       9      our code of ethics.  I suppose that could be used

      10      for that purpose.

      11             And it very clearly talks about -- Article 10

      12      of our code of ethics talks specifically about fair

      13      housing, and how we support that, and how we believe

      14      that's a really basic tenet of housing.

      15             SENATOR KAVANAGH:  It -- it -- we've had

      16      several people testify today that a core part of an

      17      effective strategy [no audio] is testing -- paired

      18      testing, as we saw "Newsday" do.

      19             And, obviously, that required [no audio].

      20             [Microphone turned off]  There was a specific

      21      proposal to fund that by raising fees that licensed

      22      participants in the industry have to pay.

      23             [Microphone turned on.]

      24             Can you comment on that proposal?

      25             DUNCAN MACKENZIE:  We'd be happy to talk







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       1      about that as well.

       2             We certainly think that qualified [microphone

       3      turns off] testers, and testing in general, is a

       4      valid activity.

       5             We can certainly talk about where the funding

       6      comes from.

       7             SENATOR KAVANAGH:  [Microphone turned off.]

       8             You talk about it in possibly -- (microphone

       9      turned on) you're open to supporting that?

      10             DUNCAN MACKENZIE:  We're open to discussing

      11      it, for sure.

      12             SENATOR KAVANAGH:  Okay.

      13             DUNCAN MACKENZIE:  I don't have the authority

      14      to commit to that, Senator.  So we have a due

      15      process, I need to go through that.

      16             But we are committed to dealing with the

      17      issue before us, and, again, everything is on the

      18      table.

      19             SENATOR KAVANAGH:  Okay, we'll take your

      20      commitment to assess it for -- at least for today.

      21             Do we have other senators with --

      22             Senator Skoufis.

      23             SENATOR SKOUFIS:  Hey, thank you.

      24             And thank you both for your appearance today,

      25      and your testimony.







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       1             And I've been in the state Legislature for

       2      seven years, and, certainly, I -- you know,

       3      I respect the profession.

       4             I've worked with NYSAR, and your affiliate in

       5      the Hudson Valley, well over seven years.

       6             And I appreciate your remarks that this was

       7      startling to you all, and you share the disgust that

       8      many of you us have expressed with what was revealed

       9      in the "Newsday" expos�.

      10             I do have a few questions.

      11             DUNCAN MACKENZIE:  Sure, please.

      12             SENATOR SKOUFIS:  I'd like to first have you

      13      comment, if you will, on the lack of appearance by

      14      the real estate agents who were requested to testify

      15      today, many of whom, no doubt, are your members.

      16             And, specifically, as you comment on that,

      17      are you aware of any discussion, directive,

      18      e-mails, any conversation, that advised those

      19      individuals to not appear today?

      20             DUNCAN MACKENZIE:  So on the decision not to

      21      appear, that is a personal decision.

      22             I don't know what is going on in each

      23      individual's head for that decision, so I don't have

      24      any way to come on that.

      25             SENATOR SKOUFIS:  But there's no







                                                                   295
       1      communication between NYSAR --

       2             DUNCAN MACKENZIE:  Oh, no.

       3             SENATOR SKOUFIS:  -- and those individuals

       4      about today's hearing.

       5             DUNCAN MACKENZIE:  Oh, gosh, no.

       6             SENATOR SKOUFIS:  Okay.

       7             Has there been any conversation about the

       8      Long Island Board of Realtors who was also requested

       9      to appear today?

      10             You know, I suspect there was -- whereas an

      11      individual, perhaps, may not be available, I suspect

      12      there was someone in LIBOR who could have come

      13      today, but they chose not to.

      14             Are you aware of why they're not here?

      15             DUNCAN MACKENZIE:  I am not.

      16             That -- as I said, they have their own

      17      individual governance structure, so that's something

      18      you'd need to ask them directly.

      19             SENATOR SKOUFIS:  Okay.

      20             If it comes up, I certainly, strongly,

      21      encourage you to urge your members, and LIBOR, to

      22      comply with any subpoenas they might receive, moving

      23      forward.

      24             Testing was brought up.

      25             I -- I'm curious, has there ever been







                                                                   296
       1      self-testing, you know, within your affiliates, your

       2      organization of members?

       3             DUNCAN MACKENZIE:  Not that I'm aware of.

       4             SENATOR SKOUFIS:  Okay.

       5             Has there been -- in light of, you know, what

       6      we've seen last month in this expos�, do you think

       7      there should be any consideration of self-testing,

       8      if you will, within the profession?

       9             DUNCAN MACKENZIE:  It's something -- it's a

      10      new concept to me, Senator, so I really don't know.

      11             It's an interesting one.

      12             I think I agree with one of the previous

      13      folks who testified just before us, that

      14      self-testing tends to be something that creates a

      15      problem by itself, because, when you're testing

      16      yourself, there's the inherent sense that there

      17      might be a conflict.

      18             I think independent testing makes more sense

      19      in terms of getting to a positive outcome.

      20             But, again, not knowing a lot about

      21      self-testing and how it might work, I don't know

      22      that I can comment on that.

      23             SENATOR SKOUFIS:  Yeah, thank you.

      24             And when I say "self-testing," I do mean, you

      25      know, basically, hiring an independent entity to do







                                                                   297
       1      that testing.

       2             The word's come up a number of times.

       3             Do you consider the discrimination that was

       4      revealed systematic?

       5             DUNCAN MACKENZIE:  I guess I don't know the

       6      word I would use.

       7             Again, I go back to say, it's just incredibly

       8      disturbing.

       9             I don't know how you quantify it, but it was

      10      incredibly disturbing, and it's something that

      11      really was a call to action to us, and to you as

      12      well.

      13             SENATOR SKOUFIS:  Do you think it's a

      14      cultural problem within the profession?

      15             You know, it's -- it's hard -- at least to

      16      me, it's hard to explain how 49 percent of instances

      17      involving an African-American resulted in

      18      discrimination if it's not systematic.

      19             There's no way, you know, by coincidence,

      20      half of those situations resulted in discrimination.

      21             So what do you think is the root of the

      22      problem?

      23             DUNCAN MACKENZIE:  I don't know, Senator.

      24             I don't know.

      25             It seems to be something deep-rooted,







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       1      I think, in our culture, and not just in the

       2      real estate industry, but in many areas.

       3             So, it's hard to say what's in someone's

       4      heart, and why they make the decisions they make.

       5             But we do our best to try and make sure our

       6      members are aware of their responsibilities under

       7      the fair housing laws.

       8             And the decisions after that are individual

       9      ones.

      10             SENATOR SKOUFIS:  Do you think that there

      11      ought to be some inflection into that point?

      12             You know, is NYSAR going to try and -- not

      13      just respond, which is, obviously, very important,

      14      but, understand why this happened, fundamentally?

      15             DUNCAN MACKENZIE:  I think that's a challenge

      16      for us to do, absolutely.

      17             SENATOR SKOUFIS:  Okay.

      18             I raised the question to some of the experts

      19      earlier today, and I would like to ask you the same

      20      question.

      21             On a scale of 1 to 10, how serious do you

      22      believe the department of state treats housing

      23      discrimination currently, "1" being little to no

      24      seriousness, and "10" being the most serious?

      25             DUNCAN MACKENZIE:  I have to put an asterisk







                                                                   299
       1      on that, because I think they care about it.

       2             I'll say they care a "10."

       3             I would say that they do not have the

       4      resources at the present time to conduct the kind of

       5      investigations that you and I think we would like to

       6      see.

       7             So I don't think it's a lack of will or a

       8      lack of desire.

       9             I think it's a lack of resources in many

      10      ways.

      11             SENATOR SKOUFIS:  You think it's just a lack

      12      of resources?

      13             DUNCAN MACKENZIE:  Yes.

      14             I can't believe that the department of state

      15      puts -- turns a blind eye to something like illegal

      16      discrimination.

      17             I just don't believe that.

      18             I do believe that, if they had the resources,

      19      that they would do things, as they have at one point

      20      in the past.  I do believe they had testers at one

      21      time.

      22             But, as you know, New York State has limited

      23      resources, and even more limited in recent years.

      24             And I think it's probably fallen upon the

      25      department of state as well.  And then not having







                                                                   300
       1      the resources, they have to make decisions.

       2             Would they make different decisions now based

       3      on what they know?

       4             Perhaps.

       5             But I think a lot of this is a resource

       6      issue, and not an issue of will.

       7             SENATOR SKOUFIS:  Do you have a sense, or an

       8      approximation, of how many housing-discrimination

       9      complaints, including steering, have been filed,

      10      let's say, over the past year --

      11             DUNCAN MACKENZIE:  I don't know.

      12             SENATOR SKOUFIS:  -- against your members?

      13             DUNCAN MACKENZIE:  I don't know that.

      14             SENATOR SKOUFIS:  Okay.

      15             You had raised -- and I'm aware of this, and

      16      I applaud it -- NYSAR's advocacy to help end co-op

      17      discriminations.  And you raised a number of other

      18      items that you've all advocated for in the past.

      19             My question is, and I know it's -- it's, you

      20      know, not even a month later after this expos� came

      21      out, do you have any new advocacy?

      22             I mean, you talked about previous advocacy.

      23             Do you have any new advocacy that you're

      24      proposing, or anticipate proposing, in light of what

      25      was revealed?







                                                                   301
       1             DUNCAN MACKENZIE:  Not at this moment, but we

       2      are really hoping that this is going to be an

       3      ability to focus on Senator Kavanagh's bill, really,

       4      on the co-op disclosure.

       5             It has been an insidious way, that, in this

       6      area, co-op housing is entry-level housing in many

       7      cases.

       8             And as you know, even in the -- in the

       9      Lower Hudson Valley area, it's -- it's -- it's --

      10      it's a way for co-op boards to say "you're not

      11      welcome here" for any reason that they want to.

      12             They're shielded by the business-judgment

      13      rule, and they don't have to follow same rules that

      14      a rent -- a normal landlord might have to.

      15             SENATOR SKOUFIS:  I agree with your

      16      sentiment, and I personally support the legislation,

      17      but let's be clear what was revealed in "Newsday."

      18             You know, the majority of those situations

      19      were not co-ops.  Right?

      20             DUNCAN MACKENZIE:  Yep.

      21             SENATOR SKOUFIS:  And so there needs to be

      22      more than that.

      23             DUNCAN MACKENZIE:  Sure.

      24             Again, we're here to -- right, in a month, we

      25      haven't had the time to come up with anything new.







                                                                   302
       1             But I'll just reiterate, we're here to work

       2      with you on that.

       3             SENATOR SKOUFIS:  Okay.

       4             As you're well aware, when we start

       5      legislative session in, literally, a matter of

       6      weeks, and so I -- I'm sure that we all will be

       7      coming forward with some ideas and proposals.

       8             And we certainly welcome your conversation

       9      and input.

      10             But my hope is, speaking for myself, that you

      11      too will come with some ideas, and not just be

      12      responsive to ideas that we come forward with.

      13             DUNCAN MACKENZIE:  We will do that.

      14             SENATOR SKOUFIS:  Thank you.

      15             I appreciate you being here.

      16             DUNCAN MACKENZIE:  Thank you.

      17             SENATOR KAVANAGH:  Senator Kaplan.

      18             SENATOR KAPLAN:  Thank you.

      19             So what steps does the New York State

      20      Realtors Association takes to identify potential

      21      violations of the Fair Housing Act by its members?

      22             DUNCAN MACKENZIE:  Sure.

      23             So we -- in terms of that, we are a

      24      self-policing organization.

      25             So it would, for the most part, take another







                                                                   303
       1      realtor to accuse another realtor of violating

       2      Article 10 of our code of ethics.  And then we have

       3      a process of adjudication that would be carried out.

       4             SENATOR KAPLAN:  Okay.  What are the steps

       5      you take after receipt of these complaints?

       6             DUNCAN MACKENZIE:  So it would go in --

       7      I have to say I'm not an expert in all the exact

       8      steps, but, we have a grievance committee.

       9             Every local board, and the state association,

      10      have a grievance committee.

      11             They will review the accusations.

      12             If they are found to be valid, then they

      13      would go through a process where both the parties

      14      would have due process.  And then there would be a

      15      determination based on a hearing.

      16             SENATOR KAPLAN:  And do you have any type of

      17      penalty for the members if they are found --

      18             DUNCAN MACKENZIE:  Sure.

      19             There are financial penalties.  And you could

      20      also be expul -- you could have your realtor status

      21      taken away.

      22             SENATOR KAVANAGH:  Just one follow-up to

      23      that.

      24             DUNCAN MACKENZIE:  Sure.

      25             SENATOR KAVANAGH:  Do you have any -- any







                                                                   304
       1      sense of the number, the frequency, of those

       2      complaints, the -- kind of, the various dis -- the

       3      frequency of various dispositions, whether they're

       4      found to be -- you know, whether they're founded or

       5      unfounded, and what the results are?

       6             DUNCAN MACKENZIE:  We don't have that as the

       7      state association.

       8             They are mostly done at the local-board

       9      level.

      10             Occasionally they come to us for

      11      adjudication, but, generally, they're done at the

      12      local-board level.

      13             So we could poll the local boards and ask

      14      them, but I don't have that data in front of me.

      15             SENATOR KAVANAGH:  Okay.

      16             So -- I mean, you know, the realtors often

      17      emphasize that, as realtors, you're -- if you're

      18      using a realtor, you're getting somebody of a

      19      particular quality with particular training.

      20             I gather, because you're here today, you

      21      agree that -- you know, that you and your industry

      22      have some work to do to live up to that?

      23             DUNCAN MACKENZIE:  Absolutely.

      24             SENATOR KAVANAGH:  Okay.

      25             Any other questions from senators?







                                                                   305
       1             Okay.

       2             I think -- are we going to do any closing?

       3      Or...

       4             SENATOR SKOUFIS:  I think Todd wanted to say

       5      something, and at least one of us should.

       6             SENATOR KAVANAGH:  Okay.

       7             So, again, thank you for your testimony.

       8             I think we'll have some closing remarks from

       9      a few of the senators here today.

      10             But -- so maybe we will begin with

      11      Senator Kaminsky.

      12             SENATOR KAMINSKY:  Thank you.

      13             I really wanted to thank the Chairs for

      14      convening this today, and having what I thought was

      15      a very important hearing that will be the

      16      jumping-off point for a good deal of action.

      17             But I particularly want to thank, and

      18      underscore the importance of, Senator Skoufis, the

      19      Chairman of, the Investigation Committee's actions

      20      today.

      21             For a very long time, the Senate powers

      22      embodied in its investigation's committee, along

      23      with the use of subpoena power, but, generally, its

      24      ability to draw attention to important topics, and

      25      find important facts, to help move legislation along







                                                                   306
       1      has languished.

       2             It's really sat on a shelf and has not been

       3      used barely ever meeting.

       4             That took a significant change last year.

       5             And today I think marks a watershed moment in

       6      the use of the Senate's beneficial use of its

       7      investigatory powers.

       8             I hope we continue to do so.

       9             I look forward to following where the facts

      10      lead in this case.

      11             And I'm proud to serve on a committee under

      12      the Chairman's leadership, as we continue to pursue

      13      facts in favor of justice on behalf of the public.

      14             SENATOR THOMAS:  Thank you so much, everyone

      15      that showed up today.

      16             This was a huge undertaking ever since

      17      "Newsday" exposed the unequal treatment of

      18      homebuyers on Long Island.

      19             The three Chairs here, including myself, we

      20      and our staff did a lot to get to where we are right

      21      now.

      22             And like I said in my opening statements,

      23      this hearing we convened, to get the facts, to get

      24      recommendations, and for us to act accordingly.

      25             And just like Chair of Investigations,







                                                                   307
       1      Senator Skoufis, said, a lot of real estate agents

       2      did not show up.

       3             And the power that we have, those subpoenas

       4      are going to go out pretty soon.  And they will know

       5      we are deadly serious about discrimination here on

       6      Long Island, and segregation, we must end this.

       7             I want to thank my staff, and staff of the

       8      two Co-Chairs here, for everything that they have

       9      done today to make this happen.

      10             And thank -- of course, our audio-visual team

      11      here, thank you so much.

      12             SENATOR KAVANAGH:  Thank you.

      13             Senator Kaplan.

      14             SENATOR KAPLAN:  Thank you.

      15             I echo the same sentiment.

      16             I thank everyone who participated in today's

      17      hearing.

      18             I think we all realize that we have a lot of

      19      work ahead of us.

      20             But I think it's really important to see

      21      everyone that was here from the Senate Conference.

      22             This is something that we truly care about,

      23      and we understand there's a lot of work to do.

      24             And we're all working together, and it's

      25      going to take all the different stakeholders to work







                                                                   308
       1      together, to, hopefully, resolve this.

       2             Thank you.

       3             SENATOR KAVANAGH:  Thank you.

       4             SENATOR SKOUFIS:  Want me to go?

       5             SENATOR KAVANAGH:  Go ahead (motioning).

       6             SENATOR SKOUFIS:  Go ahead.

       7             SENATOR KAVANAGH:  Thank you.

       8             So I'll just wrap up by saying, you know, the

       9      Senate Housing Committee has a very broad and

      10      ambitious agenda, that is intended to give life to

      11      the notion that many of us have, but is not often a

      12      reality, that, every New Yorker has a right, and

      13      should able to expect a right, to be honored to a

      14      decent affordable place to live, whether they be

      15      renters or homeowners, potential renters, potential

      16      homeowners; whether they be living in single-family

      17      homes or two-family homes or multiple dwellings.

      18             And, obviously, the work we're doing today to

      19      ensure fair-housing laws are complied with is an

      20      important part of that.

      21             And I will just say that, you know, we have a

      22      lot of work to do in many areas of the law.

      23             But it's particularly gratifying to have such

      24      partners in the Investigations Committee and the

      25      Consumer Affairs Committee, bringing their expertise







                                                                   309
       1      to this particular issue [no audio] and working

       2      together to achieve something [no audio] this coming

       3      session.

       4             Thank you.

       5             SENATOR SKOUFIS:  There's not much more to

       6      say.

       7             I'll just -- I join my colleagues in thanking

       8      all the witnesses, everyone who participated, and

       9      made this the compelling hearing that it was.

      10             And, certainly, I want to thank my two

      11      Co-Chairs, Senator Kavanagh and Senator Thomas.

      12             You know, this came together pretty quickly.

      13             We decided just a number of weeks ago,

      14      following the "Newsday" expos�, that this was called

      15      for, this was needed, and that we needed to begin to

      16      address this.

      17             And all three of our offices worked very

      18      hard, very diligently, to get us to this point.

      19             I want to particularly note, in my office,

      20      Sara DiBernardo and Michael Mazzariello from our

      21      investigative team, joined with the staffs of my

      22      colleagues' offices, in really putting this

      23      together.

      24             I certainly want to thank Senator Kaminsky,

      25      Senator Kaplan, and all the other senators who spent







                                                                   310
       1      a great deal of time here today.

       2             And let me be clear, as others have said,

       3      this is just the beginning.

       4             There will be further testimony.

       5             We hope that, once subpoenas go out, that the

       6      individuals who receive those subpoenas comply.

       7             And it is critical, some of the very most

       8      important people that we needed to hear from today,

       9      were not here, and these are the individuals who

      10      participated in the alleged discrimination that was

      11      revealed in the "Newsday" investigation.

      12             We need to hear from them directly, why they

      13      did what they did, and how they came to embody that

      14      discrimination that we saw in the compelling video

      15      statements, et cetera, from "Newsday."

      16             And we will hear from them.

      17             So this is the start.

      18             We return to legislative session in just a

      19      few weeks, as was just noted a short while ago.

      20             And we, as a Legislature, are taking this

      21      with the utmost seriousness.

      22             This won't just be hearings.  We will be

      23      addressing this in the legislative process as well.

      24             So thank you to everyone, again, who

      25      participated.







                                                                   311
       1             Thank you, especially to "Newsday".

       2             Certainly, it goes without saying, again,

       3      that this wouldn't exist if you didn't reveal what

       4      you revealed.

       5             And I wish everyone a happy holidays and new

       6      year.

       7             Thank you.

       8                (Whereupon, the joint committee public

       9        hearing concluded, and adjourned.)

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