Legal Update: Recent Developments in Fair Housing Law

Amid the coronavirus crisis and the gridlock in Washington, it’s hard to predict where we’re headed in this election year. Given the uncertainty about what’s going to happen on the national level, it seems like a good time to look at some recent major developments in fair housing law on the state and local level.

Despite the pandemic, several states have passed important legislation to expand fair housing protections based on source of income, including housing vouchers. Since last year, when the Coach last covered state and local fair housing law, four states have added these protections, while a fifth—California—has expanded its source-of-income law to cover voucher holders. We’ll review these new laws and highlight enforcement efforts in other states, which illustrate just how costly it can be to run afoul of these state law protections.

In this lesson, we’ll also review two new state laws dealing with emotional support animals and give you an update on several court cases highlighted in previous lessons. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

LEGISLATIVE UPDATE:

SOURCE-OF-INCOME DISCRIMINATION

In the April 2019 lesson, Fair Housing Coach surveyed state and local fair housing laws. Federal law, which applies nationwide, bans housing discrimination based on seven protected classes: race, color, religion, sex, familial status, national origin, and disability.

When it comes to state laws, roughly half cover only the seven federally protected classes, but the other states have expanded fair housing laws to add other protected characteristics. Some—like marital status, age, ancestry, and creed—have been on the books for many years, while others—like sexual orientation, gender identity or expression, and source of income—have been added more recently.

In general, state laws banning housing discrimination based on lawful source of income prohibit communities from turning away people, or otherwise discriminating against them, based on how they get their financial support. The specifics of the laws vary, but they generally apply to wages, retirement benefits, child support, and public assistance.

Many—but not all—also cover housing subsidies, most notably Section 8 housing vouchers. The name was changed to the Housing Choice Voucher program, but many still use “Section 8” to refer to the federal government’s major housing assistance program. Federal law doesn’t require participation in the Section 8 program, but source-of-income laws in many states make it unlawful to refuse to rent to Section 8 voucher holders.

New State Laws

In the past two years, the number of states banning discrimination based on source of income has jumped from 14 to 19, plus the District of Columbia.

Colorado: The most recent action was in July 2020, when the governor of Colorado signed new legislation (House Bill 20-1332) to include discrimination based on source of income as a type of unfair housing practice. The new law defined “source of income” to include any source of money paid directly, indirectly, or on behalf of a person, including income from any lawful profession or from any government or private assistance, grant, or loan program.

The new law prohibits anyone from refusing to rent or otherwise discriminating against applicants or residents based on their source of income or based on their participation in a third-party contract required as a condition of receiving public housing assistance. The law also bans advertisements that include any limitation or preference based on source of income. The new law takes effect on Jan. 1, 2021.

Maryland: On May 8, 2020, Maryland adopted the Housing Made Equal Act (SB 530/HB231) with the stated purpose of providing fair housing to all citizens regardless of source of income. The law prohibits housing providers from denying housing or otherwise discriminating against any person because of source of income. The new law also prohibits anyone from making, printing, or publishing certain types of materials with respect to the sale or rental of a dwelling that indicate a preference, limitation, or discrimination on the basis of source of income.

Under the new law, “source of income” means any lawful source of money paid directly or indirectly to or on behalf of a renter or buyer of housing. The definition specifically includes any government or private assistance, grant, loan, or rental assistance program, including low-income housing assistance certificates and vouchers issued under the U.S. Housing Act of 1937 (Section 8). The new law is effective Oct. 1, 2020.

Virginia: On March 27, 2020, Gov. Ralph Northam signed a new measure (HB 6) to add discrimination on the basis of a person’s source of funds to the list of unlawful discriminatory housing practices under the state’s fair housing law. The new law defines “source of funds” as any source that lawfully provides funds to or on behalf of a renter or buyer of housing, including any assistance, benefit, or subsidy program, whether such program is administered by a governmental or nongovernmental entity. The new law became effective on July 1, 2020.

New York: In April 2019, New York Gov. Andrew M. Cuomo and state legislative leaders announced that the FY 2020 Enacted Budget includes legislation to outlaw housing discrimination based on the lawful source of a person’s income. The new law amends the state’s Human Rights Law to ban housing discrimination based on lawful sources of income in all communities statewide. Landlords are now barred from automatically rejecting applicants based on their source of income and preventing lower income households from accessing safe and affordable housing. Lawful sources of income include Section 8 Housing Choice Vouchers, Supplemental Security Income, Social Security Disability, veterans’ benefits, and other government subsidies. The new law took effect in April 2019.

California: For many years, California fair housing law banned discrimination based on source of income, but it specifically excluded Section 8 housing vouchers. That changed in October 2019, when Gov. Gavin Newsom signed into law SB 329 to prohibit discrimination against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher. The governor also signed SB 222, which bans discrimination based on military status and expands the definition of “source of income” to include Veterans Affairs Supportive Housing (VASH) vouchers.

Coach’s Tip: Even if your community isn’t subject to a state law banning discrimination based on source of income, it’s important to learn about local laws that may have those protections. Many local governments have adopted fair housing laws that expand protections beyond those required under federal and state law. The laws may vary widely from city to city, even within the same state, so it’s important to understand all applicable laws, particularly if you own or manage communities in more than one state—or multiple locations within a state.

Hefty Penalties for Violations

Meanwhile, state and local enforcement officials, along with fair housing advocates have been on the lookout for discriminatory practices based on source of income. Communities face hefty penalties, along with legal fees, if they run afoul of state or local laws banning discrimination based on lawful source of income.

District of Columbia: In August 2020, D.C. Attorney General Karl A. Racine announced that a privately owned development company that owns and manages multifamily properties in Washington, D.C., has agreed to pay a penalty of up to $250,000 to resolve a lawsuit alleging discrimination based on source of income in violation of the District’s Human Rights Act.

D.C. law broadly prohibits discrimination based on traits including race, religion, national origin, sexual orientation, gender identity or expression, and disability. The law specifically prohibits housing discrimination based on source of income, meaning that landlords cannot refuse to rent to prospective tenants on the basis that they use vouchers to pay rent.

In November 2018, the Attorney General’s office filed the lawsuit against the company after an investigation allegedly revealed that it used a web-based scheduling system to automatically deny showings to any prospect who indicated they relied on housing vouchers to pay rent. In February 2020, the court granted the District’s motion for judgment without a trial, ruling that the company violated D.C. law by refusing to rent or even show apartments to prospects who planned to use housing vouchers.

After the ruling, the company agreed to resolve the lawsuit without further litigation by paying penalties and following antidiscrimination requirements. The settlement requires the company to pay a $250,000 civil penalty, provide employees with fair housing training, and implement policies to comply with the District’s antidiscrimination laws. In addition, the company agreed to include language affirmatively stating that it accepts voucher recipients on all of its advertisements, notices, and websites that are used for leasing purposes.

“This victory reaffirms that landlords will face consequences for discriminating against vulnerable District residents who use housing assistance to pay their rent,” Racine said in a statement.

In July 2020, the same company settled a federal lawsuit filed by the National Fair Housing Alliance (NFHA) alleging that the company’s policy against renting to voucher holders perpetuated residential segregation and had a disparate impact based on race, color, national origin, sex, and familial status in violation of the federal Fair Housing Act. NFHA said that the terms of its settlement agreement, which includes adopting an affirmative nondiscrimination policy, will help expand housing options for Black, Latinx, and female-headed households with children throughout the District.

“Housing in the District is already out of reach for many residents of color and families with children due to gentrification and stagnant wages. On top of that, we’re now grappling with a coronavirus pandemic that hits those in need the hardest,” Lisa Rice, NFHA’s President and CEO, said in a statement. “It’s so important, particularly now, that we remove any and all barriers to fair housing, which includes curbing the widespread practice of denying housing to those with Housing Choice Vouchers.”

Massachusetts: In August 2020, Attorney General Maura Healey announced that several Massachusetts real estate brokers and agents have agreed to pay up to $110,000 and attend fair housing training to resolve allegations that they discriminated against prospects based on receipt of public assistance. 

Massachusetts law bans housing discrimination against any individual who receives federal, state, or local housing subsidies, including rental assistance or rental supplements, because the individual is receiving such benefits. Community owners, property managers, and real estate agents or brokers can’t refuse to rent housing to a voucher holder, refuse to negotiate with a voucher holder, or set different terms or conditions for voucher holders. Housing providers also cannot treat potential residents who have children worse or differently than those without children.

The settlements resolve allegations that brokers affiliated with four realty companies violated state fair housing and consumer protection laws by illegally denying low-income people the opportunity to rent an apartment because of their receipt of public assistance through the federal Section 8 housing voucher program. Some of the settlements also resolve allegations of discrimination against families with children or the publishing of discriminatory ads marketing rental apartments.

• According to one complaint, a prospect inquired about renting units in at least four separate properties listed with one realty company. In each of these instances, the broker allegedly terminated contact with the prospect after she disclosed receipt of public assistance or that a minor child would be living with her. Under the settlement, the broker agreed to pay $15,000 in restitution and attend annual training on state and federal fair housing laws for three years.
• In the second case, a realtor with another company allegedly increased the rent on a rental property after a Section 8 voucher holder applied and disclosed her receipt of public assistance. Allegedly, the broker mistakenly believed that the rent increase placed the property just outside of the voucher’s rent cap and denied the applicant the opportunity to rent the apartment. According to the AG’s office, the broker continued to market the property and ultimately selected an individual who didn’t participate in the voucher program and who had a lower credit score than the Section 8 voucher holder. Under the settlement, the broker agreed to pay $9,000 in restitution and attended fair housing training.
• The AG’s office alleged that a real estate broker affiliated with a third realty company made false representations to a variety of prospects with rental assistance vouchers, as well as prospects with children, in response to inquiries about the availability of a unit. Under the settlement, the broker agreed to pay $9,000 in restitution and complete fair housing training.
• Finally, various brokers affiliated with a fourth company allegedly published ads for rental units that included discriminatory statements based on familial status, source of income, and disability. Allegedly, these ads included statements like “One person only,” which discriminates against couples and families, or “You must have good credit and decent work history” and “verifiable employment required,” which discriminate against people who receive public assistance and may be unable to work. Under the settlement, the AG’s office said that the company has undertaken significant efforts to ensure company-wide compliance with fair housing laws, will implement fair housing training policies for its brokers, and agreed to pay $79,200 to the state, of which $66,000 will be suspended and then waived, pending compliance with the terms of the agreement.

DEEP DIVE

Study Reveals Widespread Housing Discrimination in Boston Area

The settlements announced by the Massachusetts AG’s office are the result of an extensive investigation initiated by the Suffolk University Housing Discrimination Testing Program that allegedly revealed widespread systemic housing discrimination in the area south of Boston, which has been experiencing increasing rents and homelessness. Since referring these cases to the AG’s office, Suffolk completed and recently released the study, “Qualified Renters Need Not Apply: Race and Voucher Discrimination in the Metro Boston Rental Housing Market.”

The study, conducted from August 2018 through July 2019, found rampant discrimination against renters with Section 8 housing vouchers, as well as discrimination against Black people. Ninety percent of the study participants who indicated they were using a voucher faced discriminatory behavior from a rental agent, including the agent cutting off communication with the participant and not setting up an appointment to visit properties. The study tested properties in nine cities including Quincy, the South Shore’s largest city.

“What does this investigation tell us? Those with vouchers face high levels of discrimination while trying to find a safe place to live,” William Berman, Clinical Professor of Law at Suffolk University Law School, said in a statement. “Those participating in the real estate market have a responsibility to treat those with vouchers fairly and will be held accountable for their misdeeds if they don’t.”

In recognition of the challenges faced by Massachusetts residents who rely on public assistance in securing housing, the AG’s office issued a new guide in English and Spanish to educate tenants, landlords, and those in the real estate industry on their rights and obligations under state and federal fair housing laws. For more information on the FAQs, click here for English and here for Spanish.

LEGISLATIVE UPDATE:

EMOTIONAL SUPPORT ANIMALS

This year, two states—New York and Florida—adopted new measures concerning disability-related requests for emotional support animals. The two approaches are a study in contrasts: In New York, lawmakers reinforced the rights of individuals with disabilities to request reasonable accommodations for emotional support animals, while Florida lawmakers took aim at fraudulent emotional support animal requests by beefing up documentation requirements and imposing penalties on applicants and residents who misrepresent their pets as emotional support animals—and on healthcare providers who help them do so. 

New York Law

In August 2020, Gov. Andrew M. Cuomo signed legislation (S6172/A7331) to prohibit housing providers from discriminating against a person who relies on an animal for assistance to alleviate the symptoms or the effects of a disability. The purpose of the new law is to clarify that reasonable accommodation to enable a person with a disability to use and enjoy a dwelling includes the use of an animal to alleviate the symptoms or effects of a disability. Under the new state law, New York housing providers must now provide a reasonable accommodation by permitting a support animal to live in a home that otherwise would have prohibited pets, according to the announcement. 

Florida Law

In June 2020, Florida Gov. Ron DeSantis signed into law SB 1084, which specifically addresses discrimination in housing provided to individuals with a disability-related need for an emotional support animal.

The new law spells out that it’s unlawful for a housing provider, to the extent required by federal law, rule, or regulation, to deny housing to a person with a disability or a disability-related need who has an animal that’s required as support. The law defines emotional support animal as an animal that isn’t required to be trained to assist a person with a disability but, by virtue of its presence, provides support to alleviate one or more identified symptoms or effects of a person’s disability. The law bars a housing provider from charging a person with an emotional support animal additional fees.

Nevertheless, the new law states that housing providers are allowed to prohibit the animal if it poses a direct threat to the safety, health, or property of others, if the threat can’t be reduced or eliminated by another reasonable accommodation.

If a person’s disability isn’t readily apparent, the new law allows housing providers to request reliable information that reasonably supports that the person has a disability. Supporting information may be provided by:

• Any federal, state, or local government agency;
• Specified health care practitioners;
• Telehealth providers; or
• Out-of-state practitioners who have provided in-person care or services to the tenant on at least one occasion.

The new law states that such information is reliable if the practitioner or provider has personal knowledge of the person’s disability and is acting within the scope of his or her practice to provide the supporting information. The law bars a housing provider from requesting information that discloses the diagnosis or severity of a person’s disability or any medical records relating to the disability.

The new law specifically states that an emotional support animal registration of any kind, including, but not limited to, an identification card, patch, certificate, or similar registration obtained from the Internet is not, by itself, sufficient information to reliably establish that a person has a disability or a disability-related need for an emotional support animal.

The new law also addresses requests for multiple emotional support animals by allowing housing providers to request information regarding the specific need for each animal. The housing provider may require proof of licensing and vaccination requirements for each animal.

Finally, the new law creates penalties for fraudulent requests for emotional support animals by:

• Permitting disciplinary action against a health care practitioner’s license for providing supporting information for an emotional support animal, without personal knowledge of the patient’s disability or disability-related need; and
• Creating the misdemeanor crime of providing false or fraudulent emotional support animal information or documentation. A convicted person may be required to perform 30 hours of community service for an organization serving persons with disabilities or another entity or organization the court determines appropriate.

The law took effect on July 1, 2020.

CASE UPDATE:

SMOKING POLICIES

In the July 2020 lesson, Fair Housing Coach highlighted the ruling of the federal appeals court that a Michigan condominium community did not violate federal fair housing law by failing to adopt a building-wide smoking ban as a reasonable accommodation for a resident’s disabilities. She had asked the U.S. Supreme Court to review the ruling, but the Court recently denied her request, so the appeals court ruling against her was final.

In her complaint, the resident alleged that she had a disability that affected her ability to breathe when exposed to secondhand smoke seeping into her unit from neighboring units. State law permitted smoking in one’s home, and since the community’s bylaws said nothing specific about smoking, the HOA had long read its bylaws to permit residents to smoke in their units. After unsuccessful attempts to resolve her concerns, the community circulated a proposal to ban smoking at the complex, but the proposal failed to pass.

The resident sued the community for violating fair housing law for denying her reasonable accommodation request to ban smoking in her building. The court ruled against her, and the appeals court affirmed, ruling that the resident’s proposed smoking ban was not a reasonable accommodation because it amounted to a fundamental alteration of the community’s smoking policy. No one would describe a change from a smoking-permitted policy to a smoking-prohibited policy as a “accommodation.” Not only that, her proposal would intrude on the rights of her neighbors who smoked, who may well have bought their units because of the community’s policy permitting smoking [Davis v. Echo Valley Condominium Association, Michigan, 2020 U.S. LEXIS 3512, 6/20].

Coach’s Tip: Note that all public housing must be smoke-free. HUD’s Smoke Free Public Housing Rule bans the use of all lit tobacco products, including cigarettes, cigars, pipes, and waterpipes (but not electronic cigarettes). The ban applies to all public housing units and interior areas, as well as outdoor areas within 25 feet of public housing and administrative offices. A resident’s failure to comply with the lease, including the smoke-free rule, could lead to termination of the tenancy and eviction. All PHAs were required to be in full compliance with the rule by July 30, 2018. More information on HUD’s Smoke-Free Public Housing Rule is available on HUD’s website here.

CASE UPDATE:

CRIMINAL SCREENING SERVICES

In the June 2019 lesson, Fair Housing Coach reported on a landmark fair housing ruling that consumer reporting agencies must comply with federal fair housing law when conducting tenant-screening services for landlords.

The lawsuit was filed by fair housing advocates against a Connecticut community and a consumer reporting agency after its tenant-screening product allegedly disqualified a disabled Latino man with no criminal convictions from moving into his mother’s unit. The complaint alleged that the company’s screening product provided communities with an accept or decline decision based on an assessment of an applicant’s criminal record; allegedly, the community opted against allowing its staff access to documentation that would show how that determination was made.

The complaint alleged that the mother submitted a rental application to move her son into her unit and out of the nursing home where he was recovering from an accident that left him unable to walk, talk, or care for himself. Allegedly, the son’s application was rejected because the criminal background screening product determined he had a “disqualifying criminal record.”

Despite numerous requests, the mother said that the screening company refused to disclose her son’s criminal records until after the lawsuit was filed. Eventually, the mother learned that her son’s only criminal record was a charge—from before his accident and later dropped—for shoplifting, an infraction below the level of a misdemeanor. The lawsuit accused the community and the screening company of discrimination based on race, national origin, and disability in violation of the Fair Housing Act.

In August 2020, the court issued the latest ruling, denying requests for judgment without trial on claims that the company’s screening product had a disparate impact based on race and ethnicity. The court also ruled that a trial was needed to resolve that issue as well as an FHA claim for disparate treatment on the basis of race and ethnicity.

The court granted judgment without trial to the credit reporting company for the mother’s claim that its policies for disclosing criminal records to third parties discriminated against applicants based on disability. The mother argued that the company made her jump through hoops in order to obtain her son’s criminal records, but the company processed the request the way it did because it was made by a third party, the mother. There was no evidence that the company’s policy on third-party disclosures was merely an excuse to cover up unlawful discrimination based on disability [Fair Housing Center v. CoreLogic Rental Property Solutions, LLC, Connecticut, 2020 U.S. Dist. LEXIS 141505, 8/20].