Legal Services of Northern Virginia (LSNV) is a non-profit law firm that provides free civil legal services to low-income, elderly, and disabled residents in Northern Virginia. LSNV attorneys work in one or more substantive law practice groups, including housing (which includes evictions, foreclosures, and subsidized housing). LSNV’s primary goal is to provide access to housing and prevent homelessness caused by unnecessary evictions, illegal lockouts, unfair charges, illegal utility cut-offs, or discrimination. In the most recent fiscal year, LSNV assisted clients with housing cases and of these clients, 68% were people from communities of color (Asian, Black, Hispanic, Native American, Other Ethnic Group), 53% were households with children and 19% were clients with disabilities. The source of funds law is important in providing equal access to housing to everyone. LSNV supports the proposed guidance on Housing Discrimination on the Basis of Source of Funds.

The origins of our federal and state laws are embedded with bias and discrimination toward the poor, disabled, and communities of color. Laws and policies scrutinize the poor by categorizing them as unworthy poor – individuals who are seen as experiencing poverty because of their actions or inactions – and often these unfounded judgments combined with stereotypes and implicit bias can further discriminatory practices.  Discrimination is often masked by actions and comments such as describing Section 8 vouchers recipients as “bad tenants” or requiring them to provide additional information related to their personal finances to qualify for housing, which serve as a pretext for discrimination. The voucher program and programs that provide financial assistance for housing can eliminate concentrations of poverty and provide families with access to neighborhoods with higher opportunities. Education is key to understanding and applying the law to ensure equitable results for all.

We want to provide background about the Housing Choice Voucher Program to address some misconceptions. The Section 8 Program is a federally subsidized program to assist low-income, elderly, and disabled tenants find housing in the private market. In Northern Virginia, approximately 11,000 Section 8 vouchers are administered by local jurisdictions (Alexandria, Arlington, Fairfax, Loudoun, and Prince William). Of these vouchers, most head of households are Black/African America (ranging between 41%-72% among the Northern Virginia programs). The Public Housing Agencies (PHAs) receive funds from the U.S. Department of Housing and Urban Development (HUD). With the high cost of living in the Northern Virginia area, Section 8 vouchers can benefit both landlords and tenants. As noted by a PHA, the advantages of leasing to Section 8 tenants can include: landlords receive regular monthly payments from PHA that cover a significant portion of the rent, units are kept occupied and profitable, landlords screen and select tenants, PHA advise and assist with any problems concerning a tenant, if income is reduced, the tenant’s portion of rent will be adjusted and the housing assistance portion will be increased, participants are screened by PHA for prior criminal activity, landlords may be able to receive a tax deduction for rental property (see IRS Publication #527) and property owners are providing one of the most important human necessities - stable housing.

A tenant who is issued a Section 8 voucher is responsible for finding suitable housing where the landlord agrees to rent under the Section 8 program. Once there is an agreement with a potential tenant, the landlord will complete a Request for Tenancy Approval form. The form requests basic information, including, landlord name, unit address and monthly rent. The landlord must also negotiate a lease agreement with the potential Section 8 tenant. After the unit passes inspection, the landlord and the PHA will sign the Housing Assistance Payment Contract (HAP). Under its terms, the PHA agrees to make rent payments to the landlord on behalf of the tenant.   

Under the HAP contract, the PHA agrees to make rent payments on behalf of a Section 8 tenant. The tenant generally pays a percentage of the tenant’s adjusted gross income. The remainder is paid by the PHA. If there is an increase or decrease in the tenant’s income, the PHA will recalculate the respective payments.  The rent amount is determined based on fair market rates, which are gross rent estimates. The PHA may establish the payment standard amount for a unit by bedroom size based on HUD’s published fair market rent (FMR) schedule for the FMR areas in which the PHA has jurisdiction. HUD requires that units receiving Section 8 assistance meet HUD’s Housing Quality Standards (HQS). The requirements include a cooking stove, a kitchen with hot and cold running water, a working light fixture in the bathroom and kitchen, a fixed tub or shower with hot and cold running water, and no evidence of mold.

The proposed guidance is meant to provide context to HB 6 passed into law in 2020, now codified at Code of Virginia §§36-96.1:1, 36-96.3. The law already 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 guidance is not meant to propose new law, but rather provide clarity and direction in complying with the law.

The guidance correctly states that “[t]o determine if a tenant can afford the rent, the relevant factor for a landlord’s risk assessment is the tenant’s portion of rent, not the total rent. The voucher portion of the rent is secured under a contract with the administrative agency that has already qualified the HCV holder. The landlord’s reasonable focus should be on whether the tenant can afford the tenant’s share of the rent. Therefore, to avoid source-of-funds discrimination liability, housing providers 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.”

Thus, to otherwise consider total rent – as opposed to the tenant share of rent – has a disparate impact on at least four protected classes – race, gender, disability, and source of funds –and cannot be justified by any substantial, legitimate, non-discriminatory reason. Accordingly, doing so would violate the Virginia Fair Housing Law. There is almost no risk of the voucher payment not being paid to the landlord.  The primary reason that a voucher would not be paid would be a landlord violation, such as housing quality standards, which is within the landlord’s control. It would be illogical to base the tenant’s ability to pay on the portion of the rent covered by the voucher payment, and it would be discriminatory in its impact. For these reasons, we support the proposed guidance as a correct application of the law and as furthering the goals of the Fair Housing Act.

“As a means of providing information or guidance of general applicability to staff and the public, the Real Estate Board and Fair Housing Board issue this guidance document to interpret the requirements of 18 VAC 135-50 (Fair Housing Regulations). The purpose of this guidance document is to address issues regarding housing discrimination based on lawful “source of funds,” particularly what actions or inactions by housing providers may or may not constitute unlawful discrimination under the Virginia Fair Housing Law.” LSNV supports the adoption of this guidance.

Thank you for the opportunity to provide public comment on the proposed guidance document on Housing Discrimination on the Basis of Source of Funds. If you have further questions, please contact us.