Income Discrimination to not accept Section 8

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Income Discrimination to not accept Section 8

Noah Yonker
Member since 2019 · 5 posts · 0 votes

Is anyone aware of this new law? 

I have a duplex unit up for rent right now and have a phrase in the description saying "Not set up for Section 8". I have seen that phrase commonly on other ads and have adapted it for my use. Thoughts behind that is that being approved for section 8 requires additional inspections and it generally brings in a tenants that may not respect the property as well as they aren't investing as much into their rent.

It looks like as of April 2021, a new law passed in 19 states and Washington DC that bars landlords from discriminating based on income level and this includes turning prospective tenants away based on their section 8 voucher.

Here are some articles I found on it:

https://www.nolo.com/legal-enc...

https://www.honigman.com/firm-...


What are your thoughts about this? How are you handling this new law? If this is a valid law, how does one get approved to accept Section 8?

Thanks!

Noah

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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
4y

This is asked a couple times a week here. 

You must accept a S8 voucher if the tenant has one. However, in almost all locations, you are not required to join the S8 program, you are not required to allow S8 inspections, and you are not required to fix non-safety issues with the unit that S8 identifies. 

So while you technically accept S8 vouchers if the tenant has one, the fact that you won't complete any S8 paperwork, won't allow inspections, and won't fix issues will 100% prevent a voucher being issued for your unit. If they magically do issue one, you must accept it, but they won't. Ever. 

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  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    4y

    It is discrimination, you can be fined. Saying you don't accept Section 8 in a public ad is a mistake. Why are you not accepting Section 8, is the property not to code?

    3Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y

    This is asked a couple times a week here. 

    You must accept a S8 voucher if the tenant has one. However, in almost all locations, you are not required to join the S8 program, you are not required to allow S8 inspections, and you are not required to fix non-safety issues with the unit that S8 identifies. 

    So while you technically accept S8 vouchers if the tenant has one, the fact that you won't complete any S8 paperwork, won't allow inspections, and won't fix issues will 100% prevent a voucher being issued for your unit. If they magically do issue one, you must accept it, but they won't. Ever. 

    7Reply
  • Noah Yonker
    OP
    Member since 2019 · 5 posts · 0 votes
    4y

    Sounds like I need to modify my listing. Thanks for the input.

    I read a few articles in the last couple years such as the one below that listed cons such as an annual inspections and potentially challenging tenants. At the time, I believe it was legal to turn down Section 8 so I went that route out of ease. But everything is up to code and it was inspected earlier this week by my city's rental inspection person.

    https://www.millionacres.com/r...


    Just some background, my duplex is in Wyoming, MI. From my brief review, I believe the law applies to that area as well. I just learned about it this morning.

    0Reply
  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    4y

    Fishiest, figure if market rent is higher than section 8, if so, it’s a non-issue. Offer property for rent at market. I don’t believe it’s even legal for the sec8 tenant to offer to make up the difference. 

    If sec8 is higher than market, then make sure you don’t want to accept them for the extra profit. 

    If it’s at market go with Greg. Accept the application as well as others. If you accept someone else before you are able to complete the sec8 application/inspection go that way. If you get an inspection and don’t wish to make no -safety repairs then your property doesn’t qualify for sec8. 

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    I disagree with @Greg M.   You are not legally obligated to accept a S8 voucher.  You are legally required to not discriminate against the source of income a tenant has.  


    You are free to deny a Sec 8 tenant if they don't meet other criteria that you are allowed to base decisions on, for one, credit score. You just can't deny someone based solely or in part because their income is Sec 8.  And in a lot of places other programs similar to Sec. 8.  

    2Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    If you fall in one of the states that discrimination against the source of a tenants income is in play you 100% need to remove this from your ads immediately.  Do not hesitate for a second.  

    1Reply
  • Noah Yonker
    OP
    Member since 2019 · 5 posts · 0 votes
    4y

    It is removed now and I will screen tenants the same if they accept it vs if they do not accept it. But like Bill said, I'll use Credit score in declining applications if low. Or another factor if applicable. Thanks!

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y

    Source of income has been a protected class since before I moved to DC 15 years ago. This is nothing new. 

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    Thank you @Scott M. for making that distinction between the two. I agree.

    @Noah Yonker Even the article you posted states you should treat section 8 applicants like you would any non-section 8 applicant, and I quote

    "Don't feel you must take every applicant who has Section 8 vouchers. When the law protects people who have Section 8 vouchers, it means that you can't turn away applicants simply because they have Section 8 vouchers. It doesn't mean that you can't reject them for the same valid reasons you would reject other applicants..." - Ron Leshnower 

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  • Cassidy BurnsBusiness Member
    Investor · Alexandria, VA · Member since 2016 · 859 posts · 460 votes
    4y

    Use the phase, "We accept all applications" and have your selection criteria very public and stay consistent across the board.  With all of our units, we require 3x /monthly income to rent ratio.  You cannot state that you will not accept section 8, but in most cases, with section 8 applications this is the criteria that they typically do not qualify for.  

    As long as you stay consistent with every application you will be safe, but yes saying that in the listing is discrimination so be careful. 

    Good luck. 

    [email protected]540-960-1507
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  • William Arrington
    Gainesville, VA · Member since 2021 · 82 posts · 72 votes
    4y

    @Noah Yonker

    I was always under the impression that you had to buy in to the program to even be eligible to rent to S8. There is actually a very good business model out there if you can build rooms out in your current homes you rent to meet the criteria. A 3 bedroom might get $1400 but a 5 bedroom gets 3400 in some places

    0Reply
  • Curtis Mears
    Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
    4y

    @Noah Yonker

    For me, its not about the tenant, it's about partnering with someone who does not have my best interest at hear or care if I succeed. The federal government is not someone I would partner with. None of my homes have been inspected nor do i plan to have them inspected, therefor, I can not accept section 8. I would not put the disclaimer in the ad though. I simply inform them the property is not in the section 8 program.

    Would you have a financial backer who is often outright hostile to landlords? Or a partner who can tell you what to charge for your property? What if they decide to lower the rent? Do they actively try to help if a tenant trashes the property?

    2Reply
  • Daniel SmythPro Member
    Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
    4y

    @Noah Yonker

    The way out of a section 8 tenant is for the price to be higher than section 8 will pay.

    If your property qualifies for section 8 and the rent does as well, you may need to have that tenant.

    The government cannot require you to lower your prices. However, be sure that your prices are not high to some, just because they may go section 8.

    I am not against section 8. I really don't mind how that money is paid on time, as long as my property is respected by the tenants.

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