HUD Charges Texas HOA and Property Manager with Discrimination

UPDATED 1/22/25 10am

Federal authorities have charged one of the country’s largest property managers with discrimination that was based on socioeconomic status and fell largely along racial lines.

FirstService Residential managed three Texas homeowners associations that banned homeowners from renting to people receiving Section 8 housing vouchers, including one in the Dallas suburb of Providence Village, Bloomberg reported.

The Department of Housing and Urban Development charged the company and one of its employees for violating the Fair Housing Act. It also charged the HOA in Providence Village and its board president.

The charges stem from a 2022 rule implemented by the HOA. HUD found the rule targeted Black renters, who made up 93 percent of voucher holders in the Dallas suburb.

FirstService Residential denied the allegations and blamed the HOA. In a statement, the firm said it’s “committed to operating with fairness, integrity, and compliance with the law.”

When asked by Bloomberg about the ban, the HOA said it was part of “an effort to combat the unprecedented uptick in egregious crimes in our community committed by Section 8 tenants.”

HUD found no data to underpin the stated perception.

“What was, in fact, increasing in the Town during this time was the number and concentration of Black residents,” HUD lawyers wrote.

HUD’s query found a barrage of racist social media posts made by residents leading up to the ban, Bloomberg wrote.

The investigation also alleges a broader pattern of coordination between FirstService Residential and other communities under its management. HUD claims that Providence’s rental ban mirrored similar rules enacted by a nearby HOA also managed by FirstService.

Internal communications suggest the property manager shared the policy as a template for other associations. HUD contends that this approach amplified the harm caused by the discriminatory rules.

Although Texas lawmakers passed legislation in 2023 banning HOA restrictions on housing voucher recipients, HUD’s investigation found that Providence Village circumvented the law with new policies that continued to disadvantage Section 8 renters.

Next, a judge will decide whether to award damages or require further reform from the HOA.

This story was updated to include a statement from FirstService Residential Texas.

— Andrew Terrell