Martin Austermuhle
D.C. Attorney General Karl Racine on Thursday announced that three related real estate companies and its executives will pay a “landmark” $10 million fine for illegally discriminating against low-income renters who use housing vouchers.
The fine — the largest such penalty of its type in the U.S., according to his office — comes in the wake of a 2020 lawsuit where Racine accused DARO Management Services, DARO Realty, and Infinity Real Estate of charging extra fees to residents with Section 8 vouchers and other housing subsidies.
The lawsuit also alleged that the three related companies — which own and manage units in 15 buildings in wards 1, 2, and 3 — posted ads that specifically discriminated against voucher holders. Both actions violated the city’s Human Rights Act, which prohibits discriminating against house-seeking residents based on the source of their income, and the city’s consumer protection laws.
“When implemented well … [housing] programs work. They ensure families have a safe place to live. While most landlords accept and welcome voucher-holders … far too many blatantly refuse to accept vouchers or make it incredibly difficult to rent,” said Racine at a press conference. “We uncovered mountains of evidence demonstrating that DARO broke the law and illegally discriminated against residents who used vouchers. We’re holding DARO accountable, and that’s why they will pay the record fine of $10 million.”
And the settlement goes further: DARO has agreed to stop managing residential properties in D.C. and will have 18 months to hand over management responsibilities of all its buildings to another company. Additionally, Carissa Barry, the president of DARO Management, will have to relinquish her D.C. real estate license for 15 years.
Attorneys for DARO and Barry did not respond to a request for comment on the accusations nor the settlement.
Allegations of the illegal practices were first brought to the attention of the D.C. Office of the Tenant Advocate by a whistleblower, and later passed on to Racine’s office. He initially filed a lawsuit in 2020, and in the intervening years uncovered emails between the company’s executives showing how they pushed to have voucher-holders excluded from their properties.
In one email revealed through the suit, Jared Engel, investment director at Infinity, which had money in DARO, wrote Barry: “No voucher/sec-8 – find ways to reject, applicant must meet every requirement (credit, security deposit, income, etc), in the case that we have to lease to them which we should find every way out of, don’t put in renovated units. No transfers.” In another email, Barry wrote that she was “doing everything I can to reduce if not eliminate the section 8 program from our communities. We have tightened our screening criteria as much as humanly possible.”
Speaking at the press conference, Racine put DARO’s actions in the broader context of the displacement of Black and low-income residents from D.C., especially as housing prices have increased over the past decade. He said that more than 50,000 residents rely on some form of housing subsidies every year, 11,500 of which get Section 8 vouchers. Racine said that 95% of those residents are Black.
“We know one of the most pressing issues facing the District is the displacement of Black, brown, senior, and low-income residents,” he said. “A rising tide has not lifted up all of the neighbors. Too many residents … face serious obstacles to finding safe and affordable housing.”
“Because vouchers are designed to give families meaningful choices of what neighborhoods to live in, they must be faithfully delivered and accepted by all landlords,” added Racine. “Those that stand in the way … reinforce the very racism that is reminiscent of Jim Crow era.”
A 2018 study by the Urban Institute found that 15% of landlords in D.C. refused to accept vouchers. “There are more bad actors like DARO in our town,” warned Racine. “And we’re going to try and go after them.”
The outgoing attorney general also criticized Mayor Muriel Bowser and other elected officials for policies and practices that he said had led to displacement, and repeated his critique of the D.C. Housing Authority — which was recently the subject of a scathing federal audit that found dozens of deficiencies in how it manages public housing in the city.
“Loyalty trumped expertise,” he said of Bowser picking Brenda Donald, a former deputy mayor, to run the Housing Authority in 2021. DCHA is a 0 out of 10 — the executive director and the board need to be removed immediately.”
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