Philly landlord faces discrimination lawsuit over treatment of residents with housing vouchers

Amid an ongoing affordable housing crisis, a large Philadelphia landlord is facing a federal lawsuit for allegedly discriminating against prospective tenants with housing vouchers. The government subsidy enables very low-income families to rent on the private market.

Filed Thursday, the complaint alleges that ProManaged Inc. violated federal housing laws by openly barring voucher holders from renting apartments in majority-white neighborhoods, while accepting them at properties in majority-Black neighborhoods.

The vast majority of voucher holders in Philadelphia — about 80% — are Black, according to federal data.

“So essentially what you have is a landlord that is limiting a majority Black group of renters to housing in majority Black neighborhoods. And when you limit a class of renters to specific neighborhoods like that, you see this starts to look like modern day redlining,” said Sari Bernstein, a staff attorney with the Public Interest Law Center, which is representing the Housing Equality Center of Pennsylvania.

The complaint also names as defendants Revo Capital Partners, the deed-holder for some properties in the company’s portfolio, as well as William Smith, ProManged’s founder and chief operating officer, and Gary Rilling, another deed-holder.

ProManaged did not immediately respond to a request for comment.

The company is headquartered in New Jersey and operates nearly 80 properties in Philadelphia. More than half of them are located in majority-white census tracts in Northeast Philadelphia, according to the suit. ProManaged also maintains a smaller portfolio of properties in majority-Black census tracts in Southwest Philadelphia.

Since at least July 2020, the company has advertised that they do not accept vouchers at certain properties in the Northeast, while accepting them at properties in Southwest Philadelphia.

Some listings “unequivocally and unlawfully advertise ‘no Section 8,’” according to the complaint. Section 8 is a reference for the Housing Choice Voucher Program operated by the U.S. Department of Housing and Urban Development. The shorthand often carries a stigma rooted in hostility towards renters living in poverty.

The case is based on the experiences of trained fair housing “testers” — people posing as renters. Between May and December of 2021, they called and texted ProManaged about listing for properties that advertised that they did not accept housing vouchers.

On each occasion, the testers posing as voucher holders were either denied or ignored,  according to the suit. Testers without a voucher who reached out to ProManaged were told how to apply for apartments.

“You’re not even getting to the point where you’re past that and you’re discussing the elements of the program,” said Bernstein.

Under HUD’s program, voucher holders pay 30% of their adjusted monthly income in rent. HUD covers the difference between that amount and the full contract rent – within certain limits.

Nearly 20,000 Philadelphia households have vouchers, with the majority earning less than $20,000 a year. The median household income in the city is $52,649, according to the U.S. Census.

It takes a voucher holder an average of four months to find a place to live, according to the Philadelphia Housing Authority.

A 2018 study from the Urban Institute found that nearly 70% of landlords in Philadelphia refuse to accept vouchers.

ProManaged Inc. is also facing a local lawsuit over its treatment of voucher holders. The Philadelphia Commission on Human Relations, the city’s civil rights agency, will rule on the case.

WHYY is one of over 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push towards economic justice. Follow us at @BrokeInPhilly.