Maryland AG settles housing bias cases with 3 landlords

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Maryland Attorney General Anthony Brown on Tuesday announced settlements with corporate landlords in three housing discrimination cases dealing with government vouchers and renters with felony convictions.

The AG’s Civil Rights Division, which the General Assembly established in 2023 at Brown’s request, resolved investigations with Baltimore-based American Management, Anne Arundel County-based Maryland Management Company and Habitat America, which operates an apartment complex in Frederick.

“Everyone deserves an equal opportunity to lease an apartment, regardless of whether they have a criminal record or use a voucher to help pay their rent,” Brown said. “Each of these cases shows our Office’s dedication to protecting Marylanders’ housing rights, regardless of the priorities of the federal government.”

In the Frederick case, Habitat America was accused of source-of-income discrimination, charging higher rent to people who paid with government vouchers.

The company agreed to change its policy and reimburse the affected residents for the excess rent they paid, plus $2,500 in additional damages. It will pay $105,000 in civil penalties and provide regular reports on its rental practices.

Maryland Management, which operates statewide, was investigated after reports that it refused to accept rent from people who were facing eviction but could pay with government-funded one-time emergency rental assistance.

“This happened even though the tenants had secured funds to cover their rent,” Brown said at a news conference Tuesday.

The company agreed to pay a $90,000 civil penalty and set up a separate $90,000 fund for people who were evicted or denied housing because of the policy.

Brown’s office had already announced the American Management settlement last month. The company agreed to end a practice of denying housing to people with felony convictions. As part of the settlement, it agreed to end the practice, waive fees for applicants with felony convictions for two years and pay $25,000 in restitution.

“Policies that exclude those with criminal records inherently perpetuate racial discrimination in housing,” Brown said.

Joe Salzillo, operations manager for American Management, stated in an email that he was “pleased” to have reached a settlement with the state.

“While we firmly deny any wrongdoing and do not admit to any violation of law, we have agreed to a settlement that reflects our commitment to equitable and fair housing access for all residents, including those with felony convictions,” Salzillo wrote. “As part of this agreement, we have taken proactive steps to update our criminal history screening policies and remove any language that could be perceived as exclusionary.”

Habitat America and Maryland Management did not respond to requests for comment.

Brown was joined at the news conference by Jonathan Smith, who heads the Civil Rights Division; Frederick County Executive Jessica Fitzwater; Cleveland Horton, executive director of the Maryland Commission on Civil Rights; Public Justice Center staff lawyer Albert Turner; and Baltimore Renters United tenant organizer Heather Johnson.

“Fair housing is not a suggestion,” Horton said. “It is a mandate.”

Habitat America imposed an income requirement similar to one being litigated in the Maryland Supreme Court.

In that case, a Baltimore woman living on a monthly $841 disability check sued David S. Brown Enterprises after the company rejected her application to rent an apartment in Pikesville. The monthly rent was $1,590, and her housing voucher covered $1,464, meaning she had to pay $126 out of her own pocket. Her application was rejected under a company policy that the renter must make at least two-and-a-half times the rent.

The plaintiff, Katrina Hare, argued the policy violated the Maryland Home Act, which is intended to protect renters who pay with housing vouchers. She argued the landlord should measure her ability to pay the amount she owes. She lost in Baltimore County Circuit Court, then appealed to the Maryland Supreme Court, which heard arguments May 5 and has not yet issued a ruling.

The AG’s office filed an amicus brief in Hare’s case, and Smith, of the Civil Rights Division, argued alongside Hare’s lawyer, Lauren DiMartino. DiMartino described the company’s ability-to-pay calculation as an “insidious workaround.”

“Voucher holders — and only voucher holders — are required to show an income that is untethered from their financial obligation,” she argued.

This story has been updated with a statement from American Management.