Landlords Oppose New Discrimination Rules

by Chris on November 28, 2011

Landlords in Cedar Rapids, Iowa are opposing a proposal that would create a new class of tenants protected from discrimination.

The City Council there is poised to make it illegal to reject a rental applicant because their income comes from government or other assistance.

According to a local news report, the measure is slated for a public hearing on December 6.

Currently, the federal Fair Housing rules do not include source of income as a class offered protection from discrimination. An attempt to add that language into the Fair Housing Act was defeated by Congress in 2010.

While the Fair Housing Act serves as a threshold for discrimination protections, local governments have the power to add additional protected classes. For instance, some states now include unmarried couples, and sexual orientation as protected classes.

A number of states also have added source of income as a protected class in order to promote affordable housing in the private sector.

One difficulty with these source of income provisions is having the rules mesh with the Section 8 voucher program. Landlords who accept Section 8 must jump through some bureaucratic hoops, including a HUD inspection of the rental property, and review of the lease agreement in order to qualify to accept the vouchers. For those reasons, HUD has made efforts to assure landlords that participation in the Section 8 program will remain voluntary.

According to the National Multi Housing Council, while no law states that participation in the Section 8 voucher program is mandatory, some advocates are interpreting local source of income rules as a prohibition against rejecting any Section 8 voucher holder. They point to cases where allegations of discrimination have been brought against apartment owners who reject applicants who are Section 8 voucher holders regardless of an owner’s reason for the denial.

If the Cedar Rapids measure passes, landlords will not be able to reject an applicant because of income sources they discover during tenant screening, including federal or state financial aid programs, alimony, pensions, grants or vouchers. However, the law will specifically exclude Section 8 voucher recipients.

The NMHC has taken a position on these local source of income rules. “In source of income jurisdictions, rental professionals apply the same screening criteria and credit requirements on applicants regardless of their participation in the Section 8 or other federal subsidy program. Such protections should not be interpreted to compel a property owner to contract with the federal government via participation in the Section 8 program. Mandating participation is ultimately self-defeating as it greatly diminishes private investment in affordable housing and reduces the supply.”

According to NMHC, twelve states and the District of Columbia prohibit source of income discrimination. They are California, Connecticut, Maine, Massachusetts, Minnesota, New Jersey, North Dakota, Oklahoma, Oregon, Utah, Vermont and Wisconsin.

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 1 comment… read it below or add one }

Mike Akerly, Esq. November 29, 2011 at 8:44 pm

A very similar law already exists in New York City (prohibiting discrimination based on a “lawful source of income”) that has had minimal negative impact on landlords. That being said, NYC has a very progressive fair housing policy that also recognizes “lawful occupations,” sexual orientation,” and “partnership status” as protected classes.

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