LAW IN ORDER
The Warren Report William S. Warren,
SOURCE OF INCOME: GONE BUT NOT FORGOTTEN By William S. Warren, Warren Kalyan Law Firm
M
any in the rental housing industry are fluent in the language of protected classes. The lesson is well known that one cannot discriminate against another in the context of housing because of one’s presence in a protected class. Wherever you are in the United States, there are at least seven protected classes of which to be aware. Never wanting to be outdone, the City of Austin adds six more protected classes. It is Austin’s seventh, one which only held that title for 263 days, which is the topic of this Law in Order: The Warren Report: Source of Income. On December 11, 2014, the City of Austin amended its fair housing ordinance to prohibit source of income (SOI) discrimination throughout Austin. To demand, however, that all residential landlords lease to a person or family, regardless of their source of income, was problematic on many fronts. Challenges and litigation immediately followed. According to the NMHC/ NAA Viewpoint, published by the Joint Legislative Program of the
42
/ W I N D O W O N R E N TA L H O U S I N G
National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), the federal Section 8 program, which is at the core of source of income legislation, has been plagued with inefficiencies and onerous bureaucratic requirements. Owners who participate in the Section 8 program, Viewpoint states, are subject to often cumbersome program restrictions, such as repetitive unit inspections, resident eligibility, certification, and other regulatory paperwork. All of these, Viewpoint says, make it more expensive for apartment firms to operate their communities. With strong urging and encouragement from the Austin Apartment Association, the Apartment Association of Greater Dallas, and the Texas Apartment Association, Senate Bill 267 was crafted, vigorously debated, and eventually enacted by the 84th Texas Legislature, Regular Session. When the Texas governor signed SB 267 into law, effective September 1, 2015, it quashed the December 2014 Austin SOI ordinance. No longer enforceable was the City of Austin ordinance that required Austin landlords to accept as
residents otherwise qualified, low–income applicants who were planning to pay at least a part of their rent with funds obtained through a section 8 voucher. The passage into law of SB 267 resulted in the addition of Section 250.007 of the Texas Local Government Code (LGC). In less than a year after its enactment, therefore, Austin’s ordinance, which created a seventh local protected class, was firmly ushered out. At the time, moreover, Austin was the only city in Texas with a so–called “source of income” ordinance. LGC Section 250.007 states, in pertinent part, that a municipality or county may not adopt or enforce an ordinance or regulation that prohibits an owner, managing agent, or other person, with the right to lease or rent to another a housing accommodation, from refusing to lease or rent to a person because such person’s lawful source of income to pay rent includes funding from a federal housing assistance program. State law pulled rank on a local ordinance in a major way. Stated another way, Texas told Austin that its December 2014 source of income ordinance could not be enforced. At the time, Austin was the only municipality or county in Texas with an ordinance making it actionable discrimination to reject an applicant based upon the applicant’s source of income. The new Texas law made sure that one “source of income” ordinance had been enough; and to
shutterstock (x2)
Warren Kalyan Law Firm
