The Fair Housing Act is the federal law that prohibits discrimination because of a person’s protected class when renting or buying a home, getting a mortgage, seeking housing assistance or engaging in other housing-related activities.
SOURCE OF INCOME DISCRIMINATION
California’s Fair Employment and Housing Act (FEHA) prohibits discrimination based on source of income. Although a housing provider may require prospective tenants to demonstrate “sufficient income to pay the rent”, it is illegal to deny an applicant because all or part of their income comes from a source other than employment (such as alimony, SSI, pension, welfare, CalWORKS, investments, etc.).
SECTION 8 AND RENTAL ASSISTANCE PROTECTIONS
In 2020, the California legislature expanded the definition of income to include federal, state, and local public assistance and housing subsidies, including Housing Choice Vouchers, also known as Section 8. This means that landlords in California are required to accept Section 8 and other forms of rental assistance, and may not deny an applicant because they receive a rental subsidy. A housing provider’s failure or refusal to comply with a rental assistance program requirement, such as refusing to complete necessary paperwork, may also be considered source of income discrimination.
FEDERAL FAIR HOUSING PROTECTIONS
While denying housing based on an applicant’s source of income is specifically prohibited by California law, housing providers may also violate state and federal law if rental subsidy policies are applied differently to some groups or applicants as compared to others. For example, if a landlord has a policy of not accepting Section 8 but makes exceptions for white voucher holders, this practice would violate the law because it treats members of a protected class (non-white applicants) less favorably. Additionally, even if a “No Section 8” policy is applied neutrally to all applicants, it may still violate state and federal fair housing laws if voucher holders in that area are disproportionately members of a particular protected class. For example, in the Bay Area, voucher holders are more likely to be women, people of racial and ethnic minorities, people with disabilities, and people with children than the overall population, so refusing to rent to voucher holders in this area has a disparate impact on members of those protected groups.
INCOME REQUIREMENTS
Housing providers can still have minimum income requirements and follow the same screening procedures used to check credit and rental history for all applicants. However, for voucher holders, any minimum income threshold may only be based on the amount of rent that will be paid by the tenant (which is set by the housing authority based on the tenant’s income), rather than the total rent. For example, if the housing provider requires that the tenant must have income that is at least 3 times the rent and the voucher holder’s portion of the rent is $300/mo., the housing provider may only require that the voucher holder have an income of $900/mo.
BENEFITS OF SECTION 8 PROGRAM FOR LANDLORDS:
- Reliable, on-time payments each month
- Protection against tenant’s loss of income
- Longer tenancy = fewer vacancies
- Extra incentive for your tenant to take care of your rental
- Free advertising
- Contribution to those seeking help
