Landlords around the country routinely refuse to rent to tenants who rely on housing vouchers and other forms of financial assistance, so a growing number of low-income tenants and their advocates are using recently passed source-of-income laws to fight the practice. (iStockPhoto/z_wei)
Megan Morse had hoped to use her rental assistance voucher to move to a neighborhood closer to her hospital and her daughter.
"I can't drive. I'm physically disabled as well as epileptic, so travel is a bit much," said Morse, who has a rare disease called arthrogryposis multiplex congenita and regularly participates in an epilepsy study at the University of Michigan Hospital.
But when she applied to rent apartments in those Ann Arbor, Michigan, neighborhoods, she was repeatedly turned down, with representatives of two apartment complexes telling her they didn't accept tenants who use housing vouchers.
"Being denied by them was a little of a gut punch," said Morse, who wound up living in a less accessible area just outside Ann Arbor, farther from her daughter and the hospital.
Megan Morse was repeatedly turned down by landlords who refused to accept her housing vouchers when she applied for places to live, in violation of Ann Arbor, Michigan's ordinance outlawing discrimination against tenants using those vouchers. (Courtesy of Megan Morse)
Ann Arbor is just one of many places around the country to pass a so-called source-of-income discrimination law in recent years. In Ann Arbor's case, the law created a private cause of action against landlords who discriminate. And in April, Morse became the first tenant to sue to enforce Ann Arbor's ordinance, according to Melasi.
Morse is not alone. Frustrated renters and tenant advocacy groups have been filing a growing number of such lawsuits across the U.S. seeking to enforce these laws since they went into effect.
States and Cities Increasingly Ban Source-of-Income Discrimination
More than 57% of housing voucher holders are currently covered by state and local source-of-income protections. But while some states are adding such protections, others have barred cities from enacting them or had their protections weakened by courts.
Active state law Active local law No longer in effect Weakened law
Source: Poverty & Race Research Action Council
Tenants and their advocates, meanwhile, say the suits are important because they put landlords on notice that source-of-income discrimination is illegal.
"A lot of this is about educating landlords that they can no longer discriminate," said Deborah Thrope, deputy director of the National Housing Law Project, "that they can't deny someone housing solely on the basis that they have the voucher."
New Laws Lead to New Lawsuits
The Housing Rights Initiative sued dozens of New Jersey landlords and real estate brokers in May for allegedly violating that state's law banning discrimination against tenants who rely on Section 8 vouchers through the federal Housing Choice Voucher Program, the largest federally funded housing subsidy program, which helps more than 2 million low-income families find housing on the private market. That suit follows one the national housing watchdog filed in New York against a raft of property owners and brokers it also accuses of discriminating against voucher holders in violation of both state and city laws.
A growing number of states and municipalities have been enacting these statutes. Washington state passed one in 2018. California followed suit in 2019, as did Los Angeles and Baltimore. Illinois' law went into effect in 2022, according to the Poverty & Race Research Action Council.
Advocates say these laws are necessary to ensure low-income renters can actually use their Section 8 vouchers on the private rental market in the face of widespread discrimination against voucher holders.
A 2018 Urban Institute study found that landlords in Fort Worth, Texas, denied apartments to voucher holders 78% of the time, for example, while Los Angeles property owners did so 76% of the time. For comparison, the Urban Institute's Housing Matters initiative reported last year that 56% of landlords reject at least 25% of their applicants.
"When families are unable to use their housing vouchers due to unlawful discrimination, they have significantly less money for other things like food, clothing and basic necessities," said Aaron Carr, founder and executive director of HRI.
But the new laws also mean new litigation, attorneys say.
"More jurisdictions are adopting source-of-income protections, and more of them have private rights of action than they used to, so that gives rise to a larger number of suits," said Matthew K. Handley of Handley Farah & Anderson PLLC, who represents HRI in several cases.
The Disability Rights Education and Defense Fund and the Legal Aid Foundation of Los Angeles, for instance, reached their first settlements in April in a suit they brought on behalf of renter Robert Gardner against 22 properties Gardner said turned him away because he uses Section 8 vouchers.
"We believed Mr. Gardner's case was needed to send the message to landlords that someone is taking action to ensure that the law is enforced and that Section 8 vouchers have the impact they are supposed to — that is, getting people off the streets and into available rental units," said Michelle Uzeta, senior counsel at DREDF.
Melasi of the Civil Rights Litigation Initiative said, "We are seeing these lawsuits around the country because finding housing can be a difficult and stressful process for anyone."
"As Megan [Morse] experienced, adding source-of-income discrimination on top of that can make the search nearly impossible for some people," Melasi added.
Seeing Improvement
Private lawsuits have already reduced discrimination against Section 8 voucher holders in at least one city, tenant advocates say.
Landlords in Washington, D.C., which has had source-of-income protections for longer than most places, used to commonly reject voucher holders despite those protections, according to Handley.
"The rejection rate for voucher holders in D.C. was through the roof," Handley said. "Even though the law was there, landlords were still freely denying voucher holders an ability to rent."
So tenant advocates engaged in a testing program to determine which landlords were discriminating against voucher holders. They then brought several enforcement actions against those landlords, Handley explained.
Thanks in part to that litigation, experts say, the voucher denial rate in D.C. was down to just 15% in 2018, according to an Urban Institute study.
"The state of affairs in D.C. has improved significantly over the last few years," said Handley. "I do think that the private enforcement is why the situation has improved here."
Handley and other advocates are now using the strategy used in D.C. in places like New York State, which only adopted its law in 2019, he said.
Similar to D.C. tenant advocates, HRI began a testing program in which civil rights testers queried housing providers to gauge their compliance with fair housing laws, according to the group's New York complaint.
The strategy has also evolved, with suits now being filed against many landlords at once rather than against individual landlords, according to Handley. HRI's suit in New York federal court names close to a hundred defendants. Its New Jersey suit names almost 30.
"This is a problem throughout the industry," Handley explained. "And so that's why these lawsuits have named in many cases dozens of defendants in an effort to try to take on the problem in the industry as a whole, as opposed to one-off landlords."
An Unconstitutional Approach?
Litigation over source-of-income discrimination laws isn't coming just from those looking to enforce those laws, however. Property owners have also challenged the laws as unconstitutional.
According to Curtis Johnson, an attorney with Bond Schoeneck & King PLLC who represents landlords being sued by the New York State attorney general, requiring landlords to accept Section 8 vouchers violates the Fourth Amendment's protection against warrantless searches, since the Section 8 program requires landlords to give New York's Public Housing Authority and the U.S. Department of Housing and Urban Development "unfettered" access to their properties and records.
"Signing a [Housing Assistance Payments] contract amounts to a waiver of the landlord's Fourth Amendment right to be free from warrantless governmental search and seizure, because there is no provision of the Section 8 statute or rules and regulations that requires the PHA or HUD to get a warrant before conducting a search," Johnson said.
Source-of-income discrimination laws also amount to an unconstitutional taking in violation of the Fifth and 14th Amendments and attempt to limit and compel speech in violation of the First Amendment, Johnson argues.
In June, a state judge agreed with Johnson and his clients' Fourth Amendment claims.
"By requiring landlords to accept Section 8 vouchers, the source of income antidiscrimination statute necessarily compels landlords to consent to warrantless searches of their properties," New York Supreme Court Justice Mark G. Masler said in his ruling.
"A Worthy Goal," but Tactics in Question
Other landlords take issue not with the laws or their purpose, but with how some advocacy groups go about trying to enforce them.
While organizations like HRI have "a worthy goal," they try to achieve that goal by using testers to make phone calls to those offering apartments for rent, said Jay B. Solomon of Belkin Burden Goldman LLP, who represents multiple defendants in HRI's New York suit. But many of the entities they call end up being real estate brokers rather than landlords, Solomon said.
"They're essentially cold-calling any broker that may have listed a property. But these brokers may have gotten the listing from a multiple listing source or perhaps some sort of broad-based email blast," Solomon explained. "And what we've found is very often these brokers don't represent the ownership, they actually represent the tenants."
Meanwhile, Solomon said, his clients don't discriminate based on source of income — they accept Section 8 vouchers, and have Section 8 tenants in their buildings. By showing that to be true, Solomon has managed to get the claims against some of his clients discontinued, he said, while others have settled for nominal oversight and damages.
Even HRI's Carr and the National Housing Law Project's Thrope acknowledge that government policy could have more impact on voucher holder discrimination than private lawsuits.
For instance, housing authorities could offer landlords financial incentives to participate in the program and make that participation easier by speeding up inspections of units rented to Section 8 tenants, which currently can take weeks, according to Thrope.
And the government could do more to enforce the source-of-income laws themselves, Carr said.
"At the end of the day, the path to victory on combating housing discrimination doesn't run through nonprofits like ours — it runs through governmental enforcement agencies, which have significantly larger budgets and an obligation to tenants, taxpayers and the economy to eradicate the abominable and destructive practice of housing discrimination," Carr said.
Educating Landlords
Ultimately, however, housing advocates hope these lawsuits will help voucher holders find housing by putting landlords on notice of the laws against discrimination.
Part of the settlement agreements Handley reaches with landlords, for instance, include "robust" fair housing training as well as agreements to set aside units that are prioritized for voucher holders and increase the commissions landlords pay brokers who rent to voucher holders, Handley explained.
And the cases brought against large numbers of landlords — or larger landlords that own multiple properties — are especially likely to have an impact, according to attorneys.
"Just the fact that these cases are being publicized, it has a beneficial effect on the overall housing community because it will educate both ownership and brokers of their obligations under the law and the prohibitions against discriminating based upon source of income," Solomon said.
Morse and Melasi hope their lawsuit will have that impact in Ann Arbor.
"Ann Arbor is an incredible city — the schools, public transportation and other amenities are great," Melasi said. "This lawsuit is important because these offerings should be available to all people, including low-income individuals and families."
"That is the purpose of housing choice vouchers and what they help make possible," Melasi added, "but only if landlords are stopped from discriminating against the people using them."
--Editing by Alanna Weissman and Kelly Duncan. Graphics by Ben Jay.
For a reprint of this article, please contact reprints@law360.com.