While housing discrimination is not new, a variety that has relatively recently come into prominence is source-of-income discrimination. Source of income discrimination typically is when landlords or real estate agents attempt to discourage or deny someone housing because they are a voucher recipient such as Section 8, the federal government’s major program to help very low-income families, the elderly and the disabled to afford reasonable housing.
Fair Housing complaints in New York State “are definitely on the rise,” said Neil B. Garfinkel, Esq., a co-founder of the Real Estate Center for Success and the managing partner of Abrams Garfinkel Margolis Bergson LLP. In Melville. “New York State law declares that housing providers have to consider all lawful income sources, including a voucher, which is another form of income.”
Housing Choice Vouchers are the federal government’s primary tool to support low-income renters. In New York, the requirements do not apply to a rental unit in a two-family home occupied by the owner or to owner-occupied rooming houses.
“Source-of-income discrimination is another form of racial discrimination,” asserted attorney Eric Sanders of New York City. “The majority of voucher recipients are people of color who have historically been denied fair housing access.”
According to the Bohemia-based nonprofit Long Island Housing Services Inc., several real estate companies have settled source-of-income complaints in Suffolk County in 2023. Last March, New York Attorney General Letitia James announced a settlement with Coldwell Banker, stopping the real estate brokerage’s alleged discrimination against Black, Hispanic, and other homebuyers of color on Long Island. The investigation found that Coldwell Banker agents may have subjected prospective homebuyers of color to different requirements than their white counterparts, directed homebuyers of color to homes in neighborhoods where residents predominantly belonged to communities of color and otherwise engaged in biased behavior.
The Fair Housing Act was created in 1968 to address housing discrimination but it has persisted, said Richard Rothstein, the author of “The Color of Law.”
The phenomenon has persisted not because of a lack of policy but a lack of commitment, according to the Center for Public Integrity, a nonprofit that addresses wealth disparity. While racial discrimination took the initial spotlight it was not long before discrimination charges began focusing on color, national origin, religion, gender, familial status and disability.
In 2019, New York passed legislation making it an unlawful to discriminate in housing on the basis of “lawful source of income.” In addition to traditional income sources such as salary, other lawful income sources include federal, state or local housing assistance such as Section 8 or any other type of voucher or other form of housing assistance, regardless of whether it is paid to the tenant or landlord. It also includes federal, state or local public assistance, Social Security benefits, child support, alimony or spousal maintenance, foster care subsidies and any other form of lawful income. This applies to all landlords and rental properties. While housing providers may ask about income, including the source of it, and require income documentation, they must accept all lawful income sources equally, according to the New York State Department of Human Rights.
Nationally there are more than 4 million incidents of housing discrimination each year, most of which go unreported according to the U.S. Department of Housing and Urban Development. The National Fair Housing Alliance notes that the number of housing discrimination complaints rose to more than 33,000 nationwide last year, the highest on record. In a troubling turn, domestic violence-related complaints saw a noticeable increase along with complaints based on source of income. Anecdotally, according to the 2023 National Fair Housing Trends Report, disability discrimination was the most reported form of housing discrimination in the country by a wide margin.
According to the Urban Institute Report, Source of Income Protections and Access to Low-Poverty Neighborhoods, resentment toward the housing voucher program is the main obstacle among landlords. Property owners can require income and credit history qualifications; however, income and credit history reports may not be used in a way that is contrary to the purpose of source-of-income laws. The main barrier cited in the report is “landlord discrimination” toward voucher holders. But there are laws against this. Willful violators can receive a civil penalty of up to $250,000 per violation and tenants can seek compensatory damages with no cap, including claims for emotional suffering associated with homelessness.
The New York State Housing and Anti-Discrimination Disclosure Form includes ways in which consumers can file a complaint. While Fair Housing centers do not have the authority to adjudicate matters of law, in fiscal year 2023, New York State paid nearly $700,000 in compensation for unfair housing on Long Island in response to 139 complaints.
“Realtors, property owners, real estate brokers and property managers are central to delivering fair access to housing,” said Doreen Spagnuolo, the Long Island Board of Realtors CEO in a statement. “We take this responsibility seriously and are committed to playing our part to ensure Long Island Realtors understand how best to serve all members of our community.”
Despite an acknowledgment of the problem, complaints persist. The New York State Division of Human Rights, which enforces Fair Housing laws in New York State, received over 2,000 Fair Housing complaints in 2022 and is currently investigating over 1,000 of them.
Similarly, according to the Fair Housing Justice Center, the organization filed 11 Fair Housing lawsuits in New York State in 2022. As of August 2023, it had already filed 10 Fair Housing lawsuits in the state. Separately, the Housing Rights Initiative, a national nonprofit organization that advocates for fair housing, has filed a number of lawsuits in New York State in 2022 and 2023, alleging discrimination based on income source, race, disability, and familial status.
“Part of this is because the amount of vouchers for low-income families is going up, which is a good thing, giving the voucher holder access to more inventory,” Garfinkel said. “The problem is that inventory is going down and as a result, there is frustration from voucher holders, who are facing a tight marketplace. This creates additional complaints.”
To help grow awareness of income-source discrimination, there is now a free, accredited Fair Housing continuing-education course that can be accessed via an on-demand portal: rec4success.com.
“The biggest tenant complaint is the lack of knowledge of what the programs are, and an understanding about how they work,” Garfinkel said. Ideally, when the programs work as deigned, results can be favorable for each party. Landlords will get paid regularly while tenants have a reasonable, long-term place to live. “Initially, the issue is a lack of understanding of how the programs work. Real estate professionals have an obligation to understand how sources-of- income laws work.”
That’s probably good advice as agencies are committed to investigating and prosecuting property owners, real estate brokers and licensees, co-op boards, condo associations and property managers who fail to rent to tenants who pay rent with housing vouchers, government assistance or other forms of lawful source of income.
One fine body…