Attorney General Karl Racine announces a $10 million settlement with real estate giant DARO, LLC at a press conference on Oct. 20, 2022.
Attorney General Karl Racine announces a $10 million settlement with real estate giant DARO, LLC. Credit: Camila Bailey Credit: Camila Bailey

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D.C. likes to tout itself as a tenant-friendly city, replete with housing laws that benefit renters and resources for nearly every issue they may face. It is this self-awarded accolade that makes the onslaught of controversy from the D.C. Housing Authority Board, and surges in foreclosure so disappointing for District residents, no matter how many working groups Mayor Bowser launches to address inequity in homeownership. 

Contributing to the hurdles D.C. residents face in securing safe, affordable housing are blockbuster movie-worthy villains like the real estate megagiant DARO Management Services, and the interconnected DARO Realty, LLC, and Infinity Real Estate,

In a press conference on Thursday, Attorney General Karl Racine announced a record-breaking $10 million settlement with the company for their discrimination against renters using Section 8 housing vouchers—also known as the Housing Choice Voucher Program—and other forms of housing aid. The settlement is the largest-ever civil penalty in U.S. history in a case of its kind. 

DARO and several explicitly named executives and entities from the company, were found to be in direct violation of the District’s Human Rights Act, a prime example of the tenant-friendly legislation the District is so proud of. The HRA specifically outlaws housing discrimination based on source of income, making it illegal for landlords to discriminate against prospective or current tenants who rely on housing assistance. 

The intention behind the HRA, as described in Racine’s press release announcing the settlement, is to “expand housing choice options for subsidy holders, including in resource-rich neighborhoods like those where DARO’s buildings are located.” The company owns roughly 1,200 apartments across 15 buildings in Northwest. But despite these protections, the release goes on to say, D.C.-area landlords still refuse to accept housing subsidies.

In the case of DARO, this refusal went far beyond simply choosing higher income tenants. 

In an exceptionally damning email from defendant Jared Engel to defendant and DARO Management President Carissa Barry, Engel writes, “No voucher/sec-8 – find ways to reject, applicant must meet every requirement […]in the case that we have to lease to them which we should find every way out of, don’t put in renovated units.”

Another email from Barry to defendant Steven Kassin directly mentions their expanded efforts to discriminate against subsidy holders. Barry writes, “off the record I am doing everything I can to reduce if not eliminate the section 8 program from our communities. We have tightened our screening criteria as much as humanly possible…” 

Not so off the record in the end, it seems. 

The settlement gives DARO 18 months to pay the $10 million in penalties and formally dissolve its property management business. Additionally, the defendants will be banned from owning a residential real estate management company in D.C, and Barry will be required to forfeit her real estate licenses for 15 years, as stated in the release.

The settlement is a major win for the roughly 11,500 low-income District households that depend on Section 8 vouchers, and a long-overdue penalty for a management company that has repeatedly discriminated against low-income tenants. In 2017, D.C. filed an additional suit against DARO for violating D.C.’s Consumer Protection Procedures Act by illegally converting apartments into short-term rentals, thus eliminating numerous affordable apartments from the market. DARO settled with $100,000 in civil penalties.

Going back even further, DARO was involved in a 2015 D.C. Superior Court case on the city’s Tenant Opportunity to Purchase Act, which was enacted to protect tenants from landlords looking to displace them. TOPA requires landlords to give renters a chance to purchase the building themselves before making a sale. DARO capitalized on the confusing and vague language of the legislation to prevent tenants from exercising their TOPA rights. 

Bowser ran on ending homelessness and Racine ran on protecting the city’s tenants, but the ongoing displacement of Black, Brown, senior, and low-income residents suggests the issue is not so easily solved. And with so much tenant-friendly legislation already in place, enforcement seems to be a major issue.

At the press conference, Racine made a point to spotlight a bill currently before the Council to bring into law his temporary authority, granted by the OAG’s Civil Rights Section, to investigate and bring to court lawsuits against discriminatory policies and practices that harm District residents. The Council heard a hearing on the proposed legislation last month, but it has yet to advance. 

“Why,” asked Racine, “would the D.C. City Council not pass that law right now?” To figure that out, he went on, you only have to “follow the money,” making reference to the powerful developers that have inextricably tied themselves to elected officials and their policy goals. 

Since taking office, Racine’s office has used its temporarily granted authority to bring suit “against slumlord after slumlord.” And according to Racine, the city’s worst slumlord is the D.C. Housing Authority.

Quoting D.C. tenants, Racine said “it’s almost as if they’re doing this intentionally.” 

The dissolution of a real estate villain like DARO certainly deserves praise but to call this a win that will be felt by the average District renter might be an overstatement when there are countless other hurdles standing in the way of safe, affordable, and equitable housing in the city. 

“There are more bad actors like DARO in our town, and we’re going to do our best to go after them,” Racine said. 

Whether or not the Attorney General’s next target is located within the D.C. government or not went unspecified.