Undercover Testers Report Racial Bias at Low-Income Senior Housing Facility

A Phoenix apartment complex for low-income seniors shooed away prospective residents based on their skin color, according to claims in a federal complaint filed last week by the Southwest Fair Housing Council.

The nonprofit watchdog group says the government-subsidized Hong Ning House, located at 3920 North 24th Avenue, told black and white applicants they probably wouldn’t get accepted as residents because they weren’t Chinese, so they should apply elsewhere. If true, the actions would be against both state and federal law.

The Tucson-based Southwest Fair Housing Council investigates residences for violations of the Fair Housing Act, and has filed more than a dozen lawsuits on the topic since 2016.

“The Fair Housing Law prohibits discrimination based on race,” said Paul Gattone, the nonprofit’s attorney. “That’s what happened here. And it’s equally troublesome because the residence in question takes federal government money. You can’t take federal funding and then say we’re only going to take certain people.”

The complaint says Darrell Tennon, a black man experiencing homelessness in Phoenix, submitted an application for residency at the 58-unit Hong Ning House in October 2017. But a manager at the complex told him his chances of getting in were “slim to none” because the complex’s owners and most of the tenants were Chinese. The manager then told him to apply elsewhere, the lawsuit said.

Tennon, who had been living in a series of homeless shelters, eventually found other housing. When he notified the SWFHC about his experience, the nonprofit investigated the complex by sending in two undercover testers to pose as interested applicants.

One tester, a white individual, was told he likely wouldn’t be approved at the complex because he wasn’t Chinese, according to the lawsuit.

The other tester, a black individual, “was not allowed or encouraged to apply for residency at the complex,” the lawsuit said.

Reiko Kragness is the on-site manager for Biltmore Properties, which manages Hong Ning House and is listed as a co-defendant in the lawsuit. She screens new applicants at the complex, and said she was the one who talked to Tennon in 2017.

“He came to ask me, do we have an opening?” Kragness said. “I said we had a waiting list. He asked me, is it only Chinese? I said no, it’s for everyone, any nationality. He said, oh, why do you have so many Chinese words? I said, oh yeah, we do, the owner is the Chinese senior center. So that’s why we have a lot of Chinese words. So he thinks I discriminated.”

Kragness said she’s honest, and has told applicants the complex is made up mostly of Chinese seniors. And when all units are full, she said, she’s tried to be helpful by offering other options. But she denies any racial discrimination against Tennon or anyone else.

“Sometimes, maybe I just tell something I should not say. It’s not, I don’t think, discrimination,” she said. “You can ask anyone in here, I never discriminate against any nationality.”

The complex houses a handful of black, white, and Hispanic residents, Kragness said, but is primarily home to Asians from China, Taiwan, Vietnam and other countries.

Anthony Brown, a black resident, and Kathryn Boles, a white resident, say they have never experienced racial bias on the property.

“It’s a great place to live,” Boles said.

But Gattone said the findings of the undercover testers made his team confident the manager displayed a racial bias.

“I’m sure they had the best of intentions, but you cannot discriminate based on race in housing,” he said.

Kragness said her company plans to respond to the lawsuit, but didn’t indicate in what way. The SWFHC demands compensatory and punitive damages in the complaint, and also asks that Hong Ning House write and implement a policy and testing protocol to ensure discrimination doesn’t happen again.

Separate from the lawsuit, the Department of Housing and Urban Development typically looks into complaints about government-subsidized facilities when they are found to be under the jurisdiction of the Fair Housing Act.

“HUD takes all allegations of discrimination very seriously,” said Ed Cabrera, regional public affairs director of HUD. “Once we receive a complaint and find it to be within our jurisdiction, we investigate thoroughly and do everything to remedy the matter, with the aim to bring all parties to the table voluntarily to reach an agreement.”

Cabrera said HUD has not yet gotten involved in the Hong Ning House case because the SWFHC hasn’t yet reported the claims to HUD directly. “The simple act of filing a lawsuit against those respondents doesn’t give us any real authority to pursue any action,” he said.

Kragness said since she learned of Tennon’s complaint, she no longer tells prospective tenants about the racial makeup of the complex.

When there’s a wait list, as there is now, she’s stopped referring people to other apartment complexes. Instead, she just tells people to go to HUD’s website.

“I cried a lot after that,” she said. “I learned a really big lesson.”