Real Estate

Keller Williams, EXp Realty, Others Sued Over Alleged Discrimination

The new lawsuit claims that a host of big-name real estate companies, as well as various landlords, refused to accept Section 8 vouchers for lower-income renters.

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Numerous major real estate brands including Keller Williams, Coldwell Banker, eXp Realty and others are facing a new lawsuit alleging they discriminated against lower-income renters in New Jersey.

The Housing Rights Initiative (HRI), a housing advocacy and watchdog nonprofit filed the suit Wednesday. The suit claims that a group of landlords and real estate brokers refused to rent units to prospective tenants in New Jersey who use government-provided Section 8 housing vouchers.

“They did so in violation of state law, even as Jersey City and Newark face a housing crisis and the continued ravages of the global pandemic,” the complaint reads.

News of the suit was first reported by the New Jersey Monitor.

The suit ultimately names as defendants 26 different landlords and real estate companies. Well-known brands among those defendants include Keller Williams Realty, eXp Realty, Century 21 Real Estate, Coldwell Banker Realty and RE/MAX.

Inman has reached out to these brands and will update this story with any commentary they provide.

The complaint explains that the case has its origins in 2017 when the HRI began receiving reports of discrimination in New Jersey. The organization subsequently began doing “civil rights testing,” according to the complaint, which involved calling housing providers to see if they were obeying fair housing laws.

Many allegedly weren’t.

“In many instances, their investigation revealed a policy or practice of effectively refusing to accept vouchers, which prompted HRI to take steps to address such violations of the law,” the complaint reads.

It goes on to detail multiple occasions in which an HRI representative called about rentals in Newark and Jersey City but was told that the owners did not accept Section 8 housing vouchers. The calls reportedly took place between 2021 and 2023.

The complaint describes the behavior of the landlords and brokers as illegal discrimination that contributes to “socioeconomic segregation in New Jersey.”

“Defendants’ discriminatory policies result in a substantial decrease in the inventory of safe and affordable housing available to low-income tenants,” the complaint adds.

The new suit — which was filed in New Jersey’s Superior Court — comes amid a long-running reckoning in the real estate industry with discrimination. Discriminatory practices such as redlining have plagued the industry for decades, but the topic took on more urgency after a 2019 investigation uncovered widespread discrimination among agents on Long Island.

In the time since, a steady stream of discrimination suits has made headlines. For example in 2021, a New York law firm sued Keller Williams, EXIT Realty and dozens of other firms for alleged rental discrimination. That case was also based on an HRI investigation.

And last year, Redfin settled a case over alleged “digital redlining.”

A number of industry leaders, including Redfin CEO Glenn Kelman, have also become increasingly outspoken about the need to combat housing discrimination.

In the case of the latest lawsuit out of New Jersey, the HRI is asking the court to stop the defendants from discriminating against voucher users and to award the HRI unspecified monetary damages.

Speaking to the New Jersey Monitor, HRI executive director Aaron Carr said that the defendants in the case “unequivocally broke the law,” and called just action “intolerable.”

“We’re trying,” Carr added, “to get real estate companies to abandon their discriminatory practices and to follow the damn law.”

Email Jim Dalrymple II

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