Lincoln Property Company, country’s second largest apartment manager, hit with racial discrimination lawsuit

The Dallas-based Inclusive Communities Project (ICP) has filed suit in federal district court against one of Texas’ largest property management companies, Lincoln Property Company (LPC), alleging violations of the Fair Housing Act.

ICP is a fair housing-focused nonprofit organization working with households seeking access to housing in predominately white neighborhoods in the Dallas area. As part of its mission, ICP provides counseling, financial assistance, and other services to African-American households participating in the Section 8 Housing Choice Voucher (HCV or voucher) Program administered by the Dallas Housing Authority (DHA).

Lincoln Property Company owns and manages multifamily rental projects in the Dallas metropolitan area and around the country. The lawsuit claims that LPC has a general policy that it will not negotiate with, rent to or make certain apartment units available to voucher households. ICP states that Lincoln Property Company applies this policy in white non-Hispanic areas and applies it even when the combined income of the family and the voucher subsidy meet or exceed the contract rent for the unit.

The suit stems from Lincoln’s alleged refusal to negotiate to rent to ICP’s African-American clients in white neighborhoods despite the fact that ICP offered various bonuses, sublease agreements and other incentives to the landlord to address the objections they cited in refusing voucher holders. The suit states that Lincoln routinely rents to African-American voucher holders in majority African-American neighborhoods where the apartments operate under the Low Income Housing Tax Credit program.

The lawsuit alleges Lincoln’s policy of refusing to negotiate with or rent to voucher households causes the perpetuation of racial segregation by excluding the predominantly black voucher population from renting available multifamily units in white non-Hispanic Census tracts in Collin, Dallas, Denton and Rockwall counties.

Below are facts and claims extracted and paraphrased from ICP’s court filing yesterday. The complete pleadings can be found at the end of this post.

ICP assists DHA voucher households who choose to lease dwelling units in non-minority areas with counseling and financial assistance.

ICP’s housing mobility assistance includes negotiating with landlords as necessary to obtain units in the eligible areas at rents that are affordable by the voucher households and eligible for the voucher subsidy. The financial assistance ICP provides to these households may include the payment of application fees and security deposits to assist households moving into housing that provides housing in non-predominantly minority, non-poverty concentrated areas. ICP can also make landlord incentive bonus payments to landlords in areas that provide housing in non-predominantly minority, non-poverty concentrated areas who agree to participate in DHA’s voucher program. ICP makes these payments when it determines that such incentives are necessary to secure housing for the voucher households. For example, ICP may provide a reasonable bonus payment to a landlord if it is necessary to obtain a rent concession in order for a unit to be eligible for voucher assistance at a rent affordable to the family or if the bonus payment is necessary to convince a landlord to participate in DHA’s voucher program.

ICP also offers landlords in high opportunity areas the option of contracting with ICP to serve either as a guarantor for DHA voucher households or as the sublessor for DHA voucher households. Each of these contractual alternatives may include a landlord incentive bonus paid by ICP. These alternatives are designed by ICP to respond to landlord and landlord trade associations’ stated reasons for refusing to negotiate with or rent to voucher households.

There are 30,745 voucher households in the Dallas-Plano-Irving Metropolitan Census Division. On average, the vouchers in the City of Dallas are located in 88 percent minority and 33 percent poverty Census tracts. 94 percent of the voucher holders in the City of Dallas are minorities. 87 percent are black or African-American.

The ICP program is available for a minimal number of voucher households in each complex to avoid concentrations of assisted households. Under the sublease, ICP would assume the role and responsibilities of a corporate entity who would mirror the all-private corporate housing model that has worked well for the apartment industry for many years. ICP would lease a minimal number of units in an apartment complex in a high opportunity area. ICP would assume responsibility for finding and proposing qualified voucher residents under the landlord’s existing tenant selection criteria. Under the sublease, ICP would pay the agreed lease amount in a timely manner, and respond to all resident issues, including eviction if necessary. The decision to contract for any specific voucher family would still be the landlords’ decision.

Incentives for the landlord to participate include financial incentives in the amount of one month’s contract rent for each unit under contract as part of the ICP sublease/guarantor proposal. ICP would enter into the formal Housing Assistance Payment contract with the housing authority for the housing authority’s portion of the rent. If the housing authority was late or delinquent in this payment, ICP would still make the full rent payment due to the landlord under the lease. ICP would enter into a lease with the voucher tenant that would comply with the voucher program requirements and be subject to the specific lease between the landlord and ICP for the unit. If the tenant was late or delinquent in making a monthly payment of the tenant’s portion of the rent, ICP would still make the full rent payment due to the landlord under the lease.

The other alternative proposed by ICP was modeled on the guarantor agreement used by Lincoln Property Company and other landlords for students being subsidized by parents, tenants with irregular incomes, first time renters with no rental history, and renters with low credit scores. LPC accepts a third party guarantor arrangement as part of the lease transaction with these tenants. Under ICP’s guarantor program, ICP would guarantee the lease payments and other financial obligations for voucher families that met the landlords’ tenant selection criteria on credit history, rental history, criminal record checks, and other legitimate criteria.

ICP states that Lincoln’s exclusion of voucher holders from select properties is not required because of other, non-payment related business interests. Lincoln Property Company manages apartment complexes in predominantly minority areas where Lincoln Property Company does negotiate with and rent to voucher households. These apartment complexes include complexes required by law or contract to not discriminate against voucher households because of their status as voucher program participants. There are voucher household tenants in these complexes.

Lincoln Property Company advertises its policy of refusing to negotiate with or rent to voucher households. Lincoln Property Company places the advertisements with internet apartment locators seeking applicants for vacant Lincoln units. LPC frequently announces the policy by stating all of the following three sentences in the advertisement for specific units:

  • Our community is not authorized to accept housing vouchers.
  • Our community is not authorized to accept Section 8 housing.
  • Our community is not authorized to accept ANY government subsidized rent programs.

These statements appeal to the stereotype that because voucher tenants are Black, voucher tenants are undesirable as tenants and that the exclusion of voucher households makes the complex a more desirable place for white non-Hispanic tenants to live. One local example of invocation of the stereotype perception is the 2015 incident involving black guests at a McKinney neighborhood pool. White residents taunted the African-American teenagers to leave the pool and the neighborhood and go back to their “Section 8″ homes.

These or similar statements are published in online internet advertisements for specific unit vacancies at specific Lincoln’s multifamily rental projects in the Dallas Metro area with units that are available at voucher program rents and are located in Census tracts that are less than 30 percent black or African American.

In addition to the claims outlined above, the ICP lawsuit states:

  • Voucher households’ choices are limited by the refusal of Defendants and the refusal of other multifamily property management companies and owners to rent units located in non-minority areas to voucher households.
  • ICP’s sublease/guarantor proposal satisfies the business reasons usually asserted as the interests served by the refusal to rent to voucher households and eliminates the applicability of the stated reasons not to negotiate with or rent to voucher households.
  • ICP made attempts to negotiate with Lincoln Property Company.

The Defendants’ policy not to negotiate with or rent to voucher households causes racially discriminatory effects and is an artificial, arbitrary and unnecessary barrier to integrated housing that does not serve any legitimate interests. Any substantial, legitimate, nondiscriminatory interests supporting the challenged policy could be served by another practice that has a less discriminatory effect. The policy violates the disparate impact standard of liability under 42 U.S.C. § 3604(a).

  • The Lincoln Property Company policy refusing to negotiate with or rent to voucher households causes the perpetuation of racial segregation.
  • The Lincoln Property Company policy causes disproportionate harm to black households.
  • The Defendants’ policy not to negotiate with or rent to voucher households is an artificial, arbitrary and unnecessary barrier to integrated housing that is not necessary to achieve any legitimate interests.

Defendants’ refusal to negotiate with or enter into leases with ICP is disparate treatment based the race and color of ICP’s voucher clients and violates 42 U.S.C. § 3604(a) and 42 U.S.C. § 1982.

Lincoln Property Company’s advertising perpetuates racial stereotypes and violates 42 U.S.C. § 3604(c).

Lincoln Property Company’s policy refusing to negotiate with or rent to voucher households is disparate treatment because of race or color.

The Defendants’ policy not to negotiate with or rent to voucher households causes racially discriminatory effects and is an artificial, arbitrary and unnecessary barrier to integrated housing that does not serve any legitimate interests. Any substantial, legitimate, nondiscriminatory interests supporting the challenged policy could be achieved by other practices that have a less discriminatory effect. The policy violates the disparate impact standard of liability under 42 U.S.C. § 3604(a).

Lincoln Property Company states on its website that it is “the 2nd largest apartment manager in the U.S. with over 170,000 units under management and 4,700 employees.”