Santa Ana Company Faces HUD Discrimination Probe

Federal housing officials demanded documents Thursday from 50 entities and individuals affiliated with Yoder Shrader Management Co. of Santa Ana, as it launched an investigation into allegations that the company discriminated against prospective tenants because of race or young children in the families.

The investigation was announced at a news conference by Andrew Cuomo, secretary of the federal Department of Housing and Urban Development, who appeared via satellite from Washington, D.C.

The company under investigation operates a total of 11 apartment complexes. Of the nine involved in the complaint, all but one are in Fullerton; the other is in Buena Park. Cuomo said he initiated the federal probe, continuing an investigation begun a year ago by the Fair Housing Council of Orange County, because of the insidious nature of the alleged discrimination, which he called “discrimination with a smile.”

A disguised former Yoder Shrader manager was shown on videotape Thursday alleging that it was company policy to limit the number of minorities and families with children in the apartment complexes.

“These people were told politely, gently, but falsely, that there were no apartments available,” Cuomo said of minority investigators sent by the housing council to test the availability of apartments, which were offered to white testers soon after the minority testers had departed. “No smile can hide the ugly face of discrimination.”

Calls to Yoder-Shrader headquarters in Santa Ana went unanswered Thursday. The company is owned by Ervin E. Yoder Jr. and Varnie J. Shrader, according to property records. Efforts to reach both Yoder and Shrader were unsuccessful. A partner of a local law firm that has defended them in the past said he did not remember his firm representing them.

A former manager of the company, who was one of two employees who spoke with investigators of the Orange County Housing Council, said she was told by her supervisor to avoid renting to minorities and families with children.

“The management didn’t try to keep minorities out entirely--that would have been obvious discrimination,” said the woman, who was disguised because she said she feared retaliation within the property management industry, where she still works. “I also noticed that minority residents were clustered together.”

The apartment complexes are owned by various partnerships and trusts with connections to the Yoder and Shrader families, said Elizabeth Martin, director of litigation for the housing council.

Martin said that about 40 testers were sent to all 11 of the Yoder-Shrader properties in Orange County, and filed complaints involving nine of them. The eight Fullerton units are near Cal State Fullerton and Fullerton College.

Testers who inquired about apartments for families with children were frequently told outright that the complex limited the number of families, or that families were restricted to ground-floor apartments, said Mercedes Marquez, HUD deputy general counsel and a former Los Angeles attorney whose law firm gained notoriety in recent years for filing “slumlord” lawsuits.

It is a violation of federal law to discriminate in housing on the basis of color, religion, national origin, sex, family status or disability. State law is identical, and adds a ban against “arbitrary” discrimination.

Violation of the Fair Housing Act carries a top fine of $11,000 in civil penalties for the first offense, and $55,000 for each additional offense. Victims also can be compensated for actual damages, humiliation, mental distress and loss of housing opportunities, officials said.

The HUD office has created a toll-free hotline for people who sought apartments in the complexes managed by the company and were told there were none available. The number is 1-800-347-3739.