HD76 - Review of the Virginia Fair Housing Office


Executive Summary:
Item 14N of the 1997 Appropriation Act directed the Joint Legislative Audit and Review Commission (JLARC) to study the operations of the Virginia Fair Housing Office, and to make recommendations "regarding the appropriate allocation of resources, considering caseload, case processing time, office staffing, staff training and such other issues as may seem appropriate." The Fair Housing Office (FHO) is an administrative title for designated staff within the Enforcement Division of the Department of Professional and Occupational Regulation (DPOR). Working pursuant to the direction of the Virginia Real Estate Board, and with consultation and legal support from the Office of the Attorney General (OAG), the FHO processes, investigates and attempts to resolve complaints alleging discriminatory housing practices pursuant to the Virginia Fair Housing Law, and educates the public concerning rights and obligations conferred by the statute.

The Virginia Fair Housing Law prohibits a broad range of discriminatory practices based on race, color, national origin, sex, elderliness, religion, familial status, or handicap. Virginia receives relatively few fair housing complaints compared to other Southeastern and Mid-Atlantic states. However, the number of complaints has varied significantly over the past ten years. Most complaints have involved allegations of race-based discrimination in rental housing. However, complaints alleging discrimination based on familial status and disability are increasing.

Virginia is one of 30 states for which fair housing statutory provisions, and the administration of those provisions, have been certified as substantially-equivalent to the federal fair housing act by the U.S. Department of Housing and Urban Development (HUD). As a result, fair housing complaints filed in Virginia are investigated by the FHO rather than by HUD. Furthermore, the FHO is paid $1,700 by HUD tor each complaint that it satisfactorily processes. However, Virginia's program is subject to review, oversight and certification by HUD.

The State's administration and enforcement of the Virginia Fair Housing Law, of which the operations of the FHO comprise an integral component, is affected by the efficiency and effectiveness of the FHO. After years of untimely complaint processing, the FHO has taken steps to improve its efficiency. However, its effectiveness in administering the Virginia Fair Housing Law is relatively minimal for a number of reasons. The effectiveness of the FHO could potentially be improved through changes to a number of its internal policies and procedures, as well as through changes to a number of external, structural factors that affect its operations.

Case Processing Procedures Need Clarification to Improve Timeliness

Substantial variation in caseload over the past several years has affected the complaint processing capabilities of the FHO. The number of fair housing complaints received by the FHO increased from 77 in FY 1991 to 210 in FY 1994, resulting in a substantial backlog of unresolved complaints that was not fully addressed until FY 1997. In part as a result of the increased workload, compliance by the FHO with statutory case processing time limits (which state that investigations should be completed within 100 days of receipt of a complaint, and must not extend beyond 365 days) has been weak (see figure below on page II). For example, as a result of the large backlog, approximately 40 percent of the complaints closed in FY 1997 took more than 365 days to investigate. Within the past year, upon advice and direction from the OAG and Board, timely complaint processing has become a top priority for the FHO.

In its 1995 performance assessment of the FHO, HUD noted that there was room for improvement in the area of complaint investigations and recommended that the Real Estate Board "develop more efficient methods and procedures for conducting investigations and making determinations to comply with the time limits indicated in its law." JLARC staff determined that the lack of internal procedures governing complaint processing may have contributed to the development of an increased backlog, because case management procedures with regard to statutory time limits were not established. While case processing procedures alone may not have completely prevented the large backlog that developed in FY 1994, their absence affected how the backlog was managed by the FHO.

Recommendation (1). The Virginia Fair Housing Office, in conjunction with the Office of the Attorney General and the Real Estate Board should finalize written case processing procedures as previously recommended by the U. S. Department of Housing and Urban Development to ensure uniformity, including efficient methods and procedures for conducting investigations and making determinations in order to comply with time limits stated in the Code of Virginia.

Complaint Processing Resources Are Generally Adequate, But Training and Legal Support Need Improvement

The FHO has seven full-time and one part-time staff positions. Since the FHO is not a separate State agency, it does not have its own appropriation and consequently it is dependent upon DPOR for the allocation of its budget and staffing. Given the relatively low current caseload of FHO, this staffing level appears to be adequate in most respects at the present time. One exception is the level of clerical and secretarial support. Prior to 1994, the FHO had a full-time secretarial position. Since then, the position has been part-time, has been marked by frequent turnover, and has provided inadequate clerical support to the FHO. Adequate clerical support is important because the fair housing administrator believes that the FHO may ultimately process 200 complaints annually.

There has been some concern that training has been minimal, and staff in critical positions such as FHO investigators have largely learned by trial and error. While Virginia's case processing agreement with HUD includes training requirements, there are no training manuals in place. The need for better training is particularly important given the expectation that planned staff reductions at HUD will result in a larger and more complex caseload for the FHO in the future, Training needs are particularly evident in certain areas affair housing law such as design and construction requirements and mortgage lending.

One of the case processing functions performed by FHO staff, along with other DPOR staff, is creating, updating and maintaining the fair housing complaint database. During its review of all complaints closed from FY 1993 through FY 1997, JLARC staff identified several instances of missing or incomplete data which, if not addressed, could lessen the utility of the data.

The Fair Housing Office staff have expressed numerous concerns about the adequacy of legal support, provided by the Office of the Attorney General, for the State's fair housing function. The Real Estate Board, on the other hand, is the official client of the OAG for fair housing matters and has expressed general satisfaction with the level of legal support. Nevertheless, given the concerns expressed by the FHO staff concerning the adequacy of its access to legal support, the level and type of legal support for the State's fair housing function should be addressed.

Recommendation (2). The Department of Professional and Occupational Regulation should reestablish a full-time Secretary Senior position for the Virginia Fair Housing Office. The Department should also allocate additional staff (financed with non-general funds) to the Fair Housing Office as necessary to meet statutorily-established deadlines for the investigation and processing of complaints, if projected increases in complaint volume occur.

Recommendation (3). The Virginia Fair Housing Office, in conjunction with the Real Estate Board and the Enforcement Division of Department of Professional and Occupational Regulation, should develop a formal training manual. In addition, the Fair Housing Office should consider supplementing training required by the U.S. Department of Housing and Urban Development with training on issues including investigative techniques by experts in fair housing law and investigation.

Recommendation (4). The Virginia Fair Housing Office, in conjunction with the Information Systems Division of the Department of Professional and Occupational Regulation, should evaluate its database management procedures to ensure that its databases are accurate and complete.

Recommendation (5). The Virginia Fair Housing Office, in conjunction with the Real Estate Board and the Office of the Attorney General, should develop a mechanism to provide more direct access to legal advice during the processing of fair housing complaints. The Real Estate Board may wish to consider dedicating non-general funds to pay for the additional support this mechanism would require.

Education Efforts Would Benefit from More Evaluation and Planning

In order to increase public awareness of and compliance with the Virginia Fair Housing Law, the FHO conducts a number of outreach activities, including educational training sessions in locations around the State. The FHO appears to want to make a concerted effort to make its educational outreach effort more proactive. For example, field investigators are now required to spend ten percent of their time on such activities. However, the FHO needs to develop a more thorough understanding of the types of activities that are likely to be most effective. Improved collection and analysis of data from training session participants, as well as identification of best practices used by other states, can help the FHO to develop a more cohesive education and outreach strategy aimed at the vast majority of complaint respondents who are not subject to regulation by the Board.

Recommendation (6). The Virginia Fair Housing Office should develop a written management plan which articulates a cohesive strategy for increasing awareness of and compliance with the Virginia Fair Housing Law. The management plan should, at a minimum, address the following topics: (a) collection and utilization of data concerning training session participants, (b) evaluation of the impacts of training sessions, (c) identification of best practices used by fair housing agencies in other states, and (d) targeting of housing providers and property managers not required to be licensed by the Real Estate Board.

Conciliation Has Provided Some Relief, But Emphasis Needed on Provisions Which Promote the Public Interest in Fair Housing

Conciliation refers to settlement of a complaint without making any determination concerning the merits of the allegation. Conciliation agreements typically provide the complainant with some type of individual relief, but are also supposed to "vindicate the public interest" by promoting fair housing practices throughout the State, During FY 1997, slightly more than one-half of conciliation agreements approved by the Real Estate Board provided monetary relief. On average, these agreements provided $1,021 in compensation which is somewhat low in comparison to average monetary conciliation awards obtained in other states. Only about half of the respondents who signed conciliation agreements in FY 1997 were required to obtain fair housing training even though in some instances respondents acknowledged a lack of familiarity with the Virginia Fair Housing Law. Even fewer of the conciliation agreements included provisions to eliminate discriminatory housing practices through the revision of lease agreements or rules or regulations.

Recommendation (7). The Real Estate Board, the Department of Professional and Occupational Regulation, and the Virginia Fair Housing Office should take necessary steps to ensure that provisions to "vindicate the public interest" in fair housing, including fair housing training and educational requirements, are included in conciliation agreements in all appropriate instances.

Administrative Hearing Process Would Aid in the Adjudication of Complaints

Virginia's structure for administering its fair housing statute is significantly different from that of most other substantially-equivalent states in several respects, which could have potential implications for the operations of the FHO within the overall context of administering and enforcing the Virginia Fair Housing Law. In particular, Virginia does not have a quasi-judicial administrative hearing mechanism for adjudicating fair housing complaints. Most other states, as well as HUD at the federal level. utilize some type of administrative process for adjudicating complaints following a reasonable cause determination by: (1) receiving evidence and testimony, (2) issuing findings of fact and law which affirm or reject a reasonable cause determination, and (3) recommending appropriate relief provisions subject to approval by the state's fair housing agency. Typically, these administrative processes are optional in that parties to a complaint may elect to have the disputed issues resolved in court. In Virginia, by comparison, the only available option for resolving a complaint following a reasonable cause determination is the filing of a civil lawsuit by the OAG.

Recommendation (8). The General Assembly may wish to consider amending the Code of Virginia to establish a quasi-judicial administrative hearing mechanism for the adjudication of fair housing complaints.

Reasonable Cause Determinations and Filings of Civil Lawsuits Are Rare

Among the 638 complaints closed from FY 1993 through FY 1997, JLARC staff identified eight which resulted in a determination that reasonable cause existed to believe that the Virginia Fair Housing Law had been violated. Reasonable cause determinations are relatively rare in all of the substantially-equivalent states, but the lack of any reasonable cause determinations in Virginia during FY 1997 is still quite low by comparison (see table on page VI) In addition, during the past five years, the Board has sometimes reversed reasonable cause determinations, based on advice from the OAG, that it had previously made.

It is important for the Board to be able to make a reasoned determination concerning the merits of a fair housing complaint. As previously described, Virginia's processing of fair housing complaints is governed by a statutory 365-day time limit. Clarification of Virginia's statutory 365-day rule would help to ensure that the Board is able to make a reasoned determination of the complainant's allegation.

Recommendation (9). The General Assembly may wish to amend Sections 36-96.10 and 36-96.11 of the Code of Virginia to (a) clarify whether or not a 365-day time limit applies to the issuance of a complaint determination by the Real Estate Board; and (b) provide statutory authority for an investigation of a fair housing complaint to extend beyond 365 days if completion of the investigation within 365 days is impracticable.

Investigation and Conciliation of Complaints Could Be Improved

The FHO performs investigation and conciliation activities simultaneously but independently of each other on parallel tracks using different staff. This approach to conciliation is appropriate early in the process, prior to a substantive investigation. However, if initial conciliation efforts fail and investigation begins, continued strict reliance on a parallel approach could limit the likelihood that the complaint will be resolved in a just and appropriate manner. This is primarily the result of investigative evidence not being utilized in a meaningful way during later-stage conciliation efforts. Guidance published by HUD in 1995 provides for a more cohesive approach to investigation and conciliation.

Testing is a technique for investigating fair housing complaints. and auditing voluntary compliance, in which pairs of trained individuals posing as bona fide housing seekers are sent out into the housing market at closely spaced intervals to seek information on housing availability. Testing has been used successfully by public and private fair housing agencies to obtain comparative data on discriminatory treatment At present, testing is utilized to only a very limited extent by the FHO. By comparison, the use of testing appears to be more extensive and performed utilizing a more structured approach in other states. A properly designed and structured approach to testing could make the investigation of complaints by FHO more efficient and effective.

Recommendation (10). The Virginia Fair Housing Office should develop a written management plan to better incorporate the use of testing into its overall procedures for investigating complaints by (a) establishing an effective structure for the performance of testing and the evaluation of information obtained during the test in response to appropriate complaints: and (b) better utilizing testing data submitted with new complaints by taking necessary steps to determine how the information was obtained and interpreted so that it may serve as effective evidence in determining whether or not discriminatory housing practices occurred.

Recommendation (11). The Virginia Fair Housing Office should use audit-testing and self-testing activities as part of a broader program of ensuring voluntary compliance with the Virginia Fair Housing Law. The results obtained from audit-testing should be used by the Real Estate Board and the Fair Housing Office in appropriate instances as a basis for developing and filing complaints to enforce the provisions of the Virginia Fair Housing Law.

Recommendation (12). The Virginia Fair Housing Office, the Department of Professional and Occupational Regulation, and the Real Estate Board should review their practices for conciliation and investigation of complaints, including the feasibility of using fact-finding conferences during investigation of complaints and the use of investigative evidence during conciliations. This evaluation should be based on the guidance provided by the U.S. Department of Housing and Urban Development in the "Title VIII Complaint Intake, Investigation and Conciliation Handbook." This evaluation should be undertaken to ensure that procedures for the investigation and conciliation of complaints function in a cohesive manner to support the ultimate objective of identifying, and providing appropriate relief for, discriminatory housing practices.