UPDATE January 3, 2023 – The Housing Equality Center of Pennsylvania and Pro-Managed LLC reached an amicable resolution and settlement of their dispute and release the following joint statement:
The Housing Equality Center of Pennsylvania (“HEC”) and Pro-Managed LLC are pleased to announce the amicable resolution of their dispute. HEC filed a charge against Pro-Managed LLC with the Philadelphia Commission on Human Relations (“PCHR”) for violating the Philadelphia Fair Practices Ordinance (“FPO”), which prohibits discrimination based on source of income, including housing assistance programs. HEC also filed a complaint against Pro-Managed LLC in the federal District Court for the Eastern District of Pennsylvania alleging that Pro-Managed’s policy and practice of refusing to accept Housing Choice Vouchers (also known as “Section 8 Vouchers”) in predominantly white neighborhoods while advertising that they accept them in majority Black neighborhoods disparately treats and disparately impacts prospective Black renters in violation of the Fair Housing Act (“FHA”).
Almost immediately after HEC filed its charge and complaint, the parties reached a settlement agreement to address the concerns raised by HEC. Pro-Managed LLC, its owners, and related entities admitted that their policy and practice violated the FPO and FHA and agreed to advertise that they accept and encourage the use of Housing Choice Vouchers at all of their rental portfolio properties. They also agreed to adopt written policies regarding compliance with applicable federal and local fair housing laws and to receive training from HEC on the FPO and FHA.
“The widespread barriers and bias faced by Housing Choice Voucher holders deepens Philadelphia’s affordable housing crisis,” said staff attorney Sari Bernstein of the Public Interest Law Center, which represented HEC in both matters. “Pro-Managed should be commended for taking meaningful and prompt action to comply with the letter and spirit of local and federal fair housing laws, and for providing greater opportunities for Philadelphia renters who receive housing assistance.”
“Thanks to the Housing Equality Center of Pennsylvania, we were made aware of an unintended consequence surrounding our Housing Choice Voucher policy,” said a representative of Pro-Managed. “As a team of native Philadelphians, we never intended to exclude our neighbors from the affordable housing they deserve. The intervention of the HEC allowed us to improve our policies and reminded us of the importance of continued education and training. We’re happy to accept Housing Choice Vouchers for all our properties and are excited to continue welcoming families to their new homes.”
December 8, 2022 – In Philadelphia, renters who use Housing Choice Vouchers (a.k.a Section 8), the vast majority of whom are Black, face widespread discrimination in their search for rental housing. A 2018 study from the Urban Institute found that 67 percent of landlords in Philadelphia refuse to accept vouchers—and this rejection rate rises to 83 percent in low-poverty neighborhoods. The widespread refusal to accept vouchers limits the ability of these renters to access safe and affordable housing in diverse neighborhoods, deepening racial segregation and the concentration of poverty in Philadelphia.
Today, the Housing Equality Center of Pennsylvania (HEC), the nation’s oldest fair housing organization, sued ProManaged Inc.—a Philadelphia landlord and property management company with at least 77 properties—and related individuals and entities in federal court, claiming that its treatment of Housing Choice Voucher holders violates the Fair Housing Act’s ban on disparate treatment based on race and has a disproportionate discriminatory impact on Black renters. HEC is represented by the Public Interest Law Center and pro bono counsel from Dechert LLP.
“Limiting a group of majority-Black tenants exclusively to majority-Black neighborhoods is modern day redlining.”
In Philadelphia, 84 percent of voucher holders are Black, compared to 44 percent of renters in the city as a whole. Meanwhile, only 9 percent of voucher holders are white, compared to 39 percent of renters in the city as a whole. HEC found that ProManaged rejects voucher holders in predominately white and integrated neighborhoods, while advertising that Section 8 is accepted only in a limited number of units in vast-majority Black neighborhoods.
“By accepting Housing Choice Voucher renter applications only in majority-Black neighborhoods and not in any other of Defendants’ properties, Defendants expressly treat prospective tenants differently based on race,” the complaint reads.
“Limiting a group of majority-Black tenants exclusively to majority-Black neighborhoods is modern day redlining,” said Rachel Wentworth, Executive Director of the Housing Equality Center. “Tenants utilizing housing vouchers already face numerous challenges finding safe and affordable rental housing in Philadelphia without experiencing additional barriers due to unlawful discrimination.”
In Philadelphia, housing choice voucher renters are predominantly located in low-income, racially concentrated neighborhoods. 43 percent of voucher holders live in neighborhoods that are over 80 percent Black, while only 1 percent live in neighborhoods that are 80 percent white.
About 19,350 Philadelphia households maintain housing choice vouchers, and thousands more sit on a years-long waiting list, hoping to receive one of the few forms of assistance provided to low-income tenants. Most Philadelphia voucher holders—70 percent—earn less than $20,000 per year and have a deeply limited ability to afford housing without a subsidy, facing a substantial risk of homelessness.
“Philadelphians who use housing choice vouchers face steep barriers in their search for safe and affordable housing for themselves and their families,” said Steve Bizar, Partner at Dechert and Co-Chair of the firm’s global antitrust/competition practice. “Dechert has a long-standing tradition of pro-bono service, and we are proud to partner with the Public Interest Law Center again to protect vulnerable citizens of Philadelphia in this fair housing case.”
Most of ProManaged’s rental properties are located in white communities in Northeast Philadelphia, and more than half are located in census tracts that are at least 70 percent white. All of the properties that ProManaged lists as “Section 8 accepted” are in Southwest Philadelphia, located in three census tracts that are 85, 83, and 85 percent Black respectively.
Over six months in 2021, HEC sent fair housing testers, posing as perspective renters, to ask about Northeast Philadelphia properties where ProManaged had advertised that they would not accept vouchers. Each time, testers who said they used rental assistance were either denied or ignored, while a tester who said they did not use rental assistance was given instructions to fill out an application. All of the units were affordable using the tester’s housing choice voucher.
In addition to today’s Fair Housing Act complaint, HEC also filed a separate complaint on September 27, 2022 with the City of Philadelphia Commission on Human Relations against ProManaged for violation of Philadelphia’s local Fair Practices Ordinance, which explicitly prohibits landlords from refusing to rent based on “any lawful source of income, [including]…housing assistance programs.”
“The widespread discrimination against voucher holders in Philadelphia makes it difficult for thousands of families to find a place to live, pushing them out of neighborhoods of their choice or into those that have faced disinvestment and neglect for decades. And Philadelphia law is unambiguous: source of income discrimination is illegal.”
“Renters looking for housing should be given fair consideration, whether they pay with assistance from a parent or a Housing Choice Voucher,” said Sari Bernstein, Staff Attorney at the Public Interest Law Center. “The widespread discrimination against voucher holders in Philadelphia makes it difficult for thousands of families to find a place to live, pushing them out of neighborhoods of their choice or into those that have faced disinvestment and neglect for decades. And Philadelphia law is unambiguous: source of income discrimination is illegal.”
The Public Interest Law Center has brought claims for source of income discrimination on behalf of Philadelphia tenants who use housing assistance since 2019. In July 2022, the Law Center reached a settlement with a landlord and property management company.