supporters of ban income bias bill

#191 Summer 2018 — Renters Rising

Section 8 Allowed

Early research shows that laws prohibiting discrimination based on source of income may improve outcomes for Housing Choice Voucher holders.

Victims of housing discrimination and advocates from the Statewide Source of Income Coalition gathered at the New York State Capitol Building in April to support a bill that would amend the state’s human rights law to include lawful source of income as a protected class. Photo courtesy of Ban Income Bias NY.

supporters of ban income bias bill

Victims of housing discrimination and advocates from the Statewide Source of Income Coalition gathered at the New York State Capitol Building in April to support a bill that would amend the state’s human rights law to include lawful source of income as a protected class. Photo courtesy of Ban Income Bias NY

The Housing Choice Voucher program, colloquially known as Section 8, seeks to eliminate concentrations of poverty and provide poor households with greater access to higher-opportunity neighborhoods. Even though research suggests that voucher holders prefer to move to neighborhoods with low poverty and access to quality jobs and education, they must first find a landlord who is willing to rent to them. This can be a challenge in places where landlords commonly refuse to rent to voucher holders, a practice known as “source of income discrimination.” To combat this practice, many states, cities, and counties prohibit discrimination against otherwise-qualified voucher holders.

A Failed Promise

Scholars find that vouchers have so far had limited success in breaking up concentrations of poverty and increasing access to opportunity. Theoretically, voucher holders can settle anywhere. In reality, however, recipients “are no more likely than nonsubsidized households to penetrate discriminatory market barriers and find rental accommodations in integrated living environments,” according to James H. Carr in his 1999 paper, “The Complexity of Segregation: Why It Continues 30 Years After the Enactment of the Fair Housing Act.” Although many voucher holders do end up living in moderate-income areas, most do not move far from their previous neighborhoods. Moreover, there are deep racial divides regarding which households are more successful in finding housing in non-poor neighborhoods.

One possible reason for the failure of the voucher program to achieve these goals is that federal law does not require landlords to accept vouchers; nor do most cities or states. This allows landlords to discriminate against potential tenants on the grounds of their “source of income.”

Voucher recipients are a subset of America’s very low-income households. Only about a quarter of eligible households receive housing assistance. Voucher recipients are more financially stable than their unsubsidized counterparts, not less. Studies show that when well-kept subsidized properties are located near other market-rate units and developments, they do not cause any loss in property values, or any increase in crime. Overall there is little to distinguish properties that rent to Section 8 recipients from those renting to other low-income tenants. Nonetheless, landlords commonly refuse to rent to voucher holders.

A recent study by the Fair Housing Center for Rights and Research found that in 2016 in Cuyahoga County, Ohio, African-American female testers with children who sought to pay rent with a voucher were denied housing 91.2 percent of the time. Similarly, the Chicago Lawyers’ Committee for Civil Rights Under Law Inc. found in 2014 that Chicago housing providers discriminate against tenants based on voucher status 32 percent of the time. Ninety-one percent of landlords in Austin refused to accept Section 8 tenants and 94 percent of units in the right rent range were not accessible to voucher holders, prompting Austin to pass a source of income protection ordinance, which was later pre-empted by the state of Texas. A 2001 HUD study found that 31 percent of vouchers actually had to be returned because the recipients couldn’t find a landlord that would accept them—and in some markets that number was much higher.

[Related: The Answer–Can Prohibiting Source-of-Income Discrimination Help Voucher Holders?]

Voucher holders are disproportionately people of color, and that has led advocates and scholars to suggest that the refusal to accept vouchers is often a proxy for racial discrimination. The Cuyahoga study found that landlords who stated they did not accept vouchers were 20 percent more likely to treat African-American testers unfavorably or more stringently in other ways than white testers. Furthermore, families with children, the elderly, and people with disabilities are all also protected from discrimination under the Fair Housing Act, and are more likely to have vouchers. Thus, when discriminating against those with vouchers, there is often a disproportionate impact based on the tenant’s familial status, disability, race, or age.

Litigation arguing that this disproportionate impact violates the Fair Housing Act has been met with mixed results. Discrimination can be hard to prove. Yet in some cases these lawsuits have succeeded in forcing some local governments to adopt laws banning source of income discrimination. Because litigation has been only partially effective, dozens of municipalities have proactively enacted laws to protect voucher recipients from discrimination. Some of these laws generically prohibit discrimination based on lawful “source of income,” while others explicitly forbid landlords from turning away renters with vouchers or holding someone’s receipt of government assistance against them in housing decisions. Some ordinances exempt buildings up to three units; others up to five units; and others stick with only the Fair Housing Act exemption of an owner-occupied two-family home.

Meanwhile, Indiana and Texas have actually passed laws preventing cities and towns from passing these kinds of protections, prompting advocates to call for pushback against this kind of state pre-emption and more protections nationwide.

Effectiveness of Source of Income Protection

Early research shows promise for source of income anti-discrimination laws increasing the likelihoods of voucher holders finding a place to use their vouchers, moving to integrated neighborhoods, and moving to higher-opportunity neighborhoods. In 2001, Meryl Finkel and Larry Buron studied 48 public housing agencies and 2,600 voucher households, finding that, all else equal, the probability of successfully using one’s voucher within the program time frame (their definition of program success) was 12 percentage points higher in jurisdictions with a source of income anti-discrimination law. In 2012, Lance Freeman concurred, estimating voucher utilization rates increase by 5 to 12 percentage points when there is an a source of income anti-discrimination law on the books. A 2011 study for HUD, The Impact of Source of Income Laws on Voucher Utilization and Locational Outcomes, found that utilization rates were 4 to 11 percentage points higher in jurisdictions with these types of protection laws than in jurisdictions without. That study also found that poverty rates and voucher concentrations were 1 percentage point lower in those jurisdictions, and Black, Asian, and Native-American voucher recipients had proportionally 15 to 22 percentage points more white neighbors.

Opponents express concerns about distorting the rental market through additional regulation, though there is little evidence to show that the market is actually being distorted. Landlords also commonly express that they find the required inspection to be an administrative burden, which is one reason advocates for source of income protections also frequently call for universal rental registries and inspections. The courts have generally found that the purported administrative burden involved does not rise to a level that would warrant an exception from source of income protections.

Alone, source of income anti-discrimination laws will not instantly eliminate all the barriers that low-income families with vouchers face when looking for a place to live. Much of the success of such policies is dependent on their implementation and enforcement. As with other housing discrimination laws, the burden of enforcement largely falls on those being discriminated against. Few source of income protections include robust and proactive enforcement mechanisms; advocates are still figuring out what those would look like. The Equal Rights Center in Washington, D.C., which has had source of income protection on the books since 1977, found that in 2005, voucher holders were still discriminated against 61 percent of the time. Concerted education, outreach, and monitoring between 2005 and 2011 brought that figure down to 28 percent.

Meanwhile, protections for voucher holders are spreading across the country, and courts regularly uphold their validity. The evidence suggests that these protections are helping, but to really make a substantial difference, the next step will be figuring out enforcement.


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