March 16, 2021

Virginia Real Estate & Fair Housing Boards

Virginia Fair Housing Office                         

Via: townhall.virginia.gov  

Re:         PROPOSED Guidance Document on HOUSING DISCRIMINATION ON THE BASIS OF SOURCE OF FUNDS

Dear Sir or Madam:

Please accept these comments in support of the proposed guidance document on housing discrimination on the basis of source of funds in Virginia. 

Between 2005 and 2016, I served as a housing attorney for the Northwest Justice Project in Seattle, Washington—a jurisdiction that prohibited housing discrimination based on source of income throughout that time period.  In addition to Seattle, many other cities in King County, as well as the county itself, also had local ordinances prohibiting source-of-income discrimination. 

As a housing attorney in the area, I represented numerous clients in cases involving discrimination based on the use of Housing Choice Vouchers or other disfavored or stigmatized income sources.  From that experience, I know very well the importance of the proposed guidance document in Virginia’s source-of-income discrimination law, which correctly anticipates and responds to numerous tactics I have seen from landlords hostile to voucher holders.

As one example, I represented multiple King County voucher tenants whose landlords refused to make repairs necessary to comply with “Housing Quality Standards” required by the voucher program, in hopes that the housing authority would terminate the owner’s contract and force the voucher holder to move.  This cynical tactic not only frustrates the legislative purpose behind prohibiting source-of-income discrimination, it also undermines public policies in favor of safe and quality housing and may expose tenants to dangerous or uninhabitable living conditions.  The guidance correctly identifies such tactics as contrary to the Virginia Fair Housing Law and will hopefully deter landlords from attempting such practices. 

Another cynical practice I encountered in representing voucher holders was the use of admission policies requiring applicants to demonstrate incomes at least 2.5 or 3.0 times the monthly contract rent in order to qualify—even though voucher tenants typically benefit from a rental subsidy that leaves them responsible for only a portion of the contract rent.  Of course, voucher tenants typically pay about 30% of their incomes toward rent and utilities—so would almost always be able to demonstrate incomes of more than three-times the rent portion they are responsible for paying.  But very few voucher tenants have incomes of at least 2.5 times the contract rent, and hardly any have incomes more than 3.0 times the contract rent (indeed, a tenant whose income exceeds 3.0 times the contract rent would almost always have too much income to receive a rental subsidy). 

Hence, applying income criteria in this manner thus has the practical effect of disqualifying almost all voucher holders—and in my observation, doing this is precisely the intention of such policies.  Again, these rules frustrate the statutory objective in enabling voucher holders to access housing, and are not necessary to advance any legitimate purpose of the landlord.  The proposed guidance properly recognizes this, and observes that “the relevant factor for a landlord’s risk assessment is the tenant’s portion of rent, not the total rent,” for which reason landlords are directed to “should subtract any source of funds from a rental assistance program (like the HCV) from the total of the monthly rent prior to calculating whether the tenant satisfies the income criteria.”  This guidance is especially important to avoid the improper practice, which conceivably might result from ignorance rather than animus, of treating the amount of the tenant’s rental subsidy as “income” to the applicant for purposes of determining whether they meet the 2.5 or 3.0 times-rent threshold. 

Finally, the guidance correctly recognizes that the ordinary administrative requirements of participating in voucher programs or accepting other third-party payments do not establish grounds for refusing such income sources.  In the years preceding Virginia’s prohibition of discrimination based on source-of-income, advocates in many states had brought lawsuits challenging housing providers’ refusals to accept vouchers due to the discriminatory effects of such lawsuits on protected classes overrepresented in voucher programs, such as women, racial minorities, and people with disabilities.  Yet the majority of those lawsuits failed; although the burdens of voucher participation are slight, courts viewed the avoidance of those administrative requirements as significant enough to justify a landlord’s non-participation despite its incidental effects on protected class members.  Now that Virginia has prohibited source-of-income discrimination outright, however, a refusal to accept vouchers or other third-party housing payments constitutes disparate treatment on the basis of income source.  While the ordinary costs and burdens of voucher participation might justify a landlord’s policy of non-participation against a disparate impact challenge, under the new law such a policy amounts to disparate treatment. 

For all of the foregoing reasons, I applaud the Real Estate Board for proposing this guidance and urge its prompt adoption.  Thank you.

Sincerely,

EGD

Eric Dunn

Director of Litigation

National Housing Law Project