Existing law, the California Fair Employment and Housing Act, prohibits housing discrimination, including discrimination through public or private land use practices, decisions, or authorizations, based on specified personal characteristics, including source of income. Existing law defines the term source of income for purposes of the provisions relating to discrimination in housing accommodations described above, to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. Existing law specifies that for the purposes of this definition, a landlord is not considered a representative of a tenant.

This bill would instead define the term for purposes of those provisions, to mean verifiable income paid directly to a tenant or to a representative of a tenant, or paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and housing subsidies, as specified. The bill would also specify that for the purposes of this definition, a housing owner is not considered a representative of a tenant.

This bill would incorporate additional changes to Section 12927 of the Government Code proposed by AB 1497 and SB 222 to be operative only if this bill and AB 1497 or SB 222 are enacted and this bill is enacted last.

This bill would incorporate additional changes to Section 12955 of the Government Code proposed by SB 222 to be operative only if this bill and SB 222 are enacted and this bill is enacted last.

 UNFINISHED BUSINESS  

Bill No: SB 329

Author: Mitchell (D), et al.

Amended: 9/6/19

Vote: 21

SENATE JUDICIARY COMMITTEE: 7-2, 4/30/19

AYES: Jackson, Allen, Caballero, Monning, Stern, Umberg, Wieckowski

NOES: Borgeas, Jones

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SENATE FLOOR: 24-11, 5/23/19

AYES: Allen, Atkins, Beall, Bradford, Caballero, Dodd, Durazo, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener

NOES: Archuleta, Bates, Borgeas, Chang, Grove, Jones, Moorlach, Morrell, Nielsen, Stone, Wilk

NO VOTE RECORDED: Galgiani, Glazer, Roth

ASSEMBLY FLOOR: 46-21, 9/10/19 - See last page for vote

SUBJECT: Discrimination: housing: source of income

SOURCE: California Rural Legal Assistance Foundation

Housing California

National Housing Law Project

Western Center on Law and Poverty

DIGEST:

This bill expands the definition of “source of income,” a category that California’s Fair Employment and Housing Act (FEHA) protects against discrimination. This bill prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher, to help them pay the rent.

Assembly Amendments

address chaptering out issues.

ANALYSIS:

Existing law:

1. Makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the source of income of that person. (Gov. Code § 12955(a).)
2. Defines “source of income” to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. (Gov. Code § 12927, 12955(p).)

This bill:

1. Expands FEHA’s definition of “source of income” to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the U.S. Housing Act of 1937.
2. Declares that the Legislature’s intent in enacting this bill is to provide housing voucher program participants an opportunity to receive a thorough and fair vetting when seeking housing.

Comments

1. About housing voucher programs. Roughly 300,000 low-income Californians rely on government subsidies in the form of housing vouchers to help pay their rent each month.^[1] There are a number of different types of housing voucher programs and they are generally designed to assist populations that are at high risk for homelessness or for whom homelessness would have especially devastating consequences.

By far the most common form of housing voucher is a Housing Choice Voucher (HCV), popularly known as “Section 8.” Section 8 is the federal government’s “major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.”^[2] Administered by the U.S. Department of Housing and Urban Development (HUD) in partnership with local public housing agencies, this program allows individuals and families to receive federal housing assistance in the form of a voucher that can be used to acquire housing on the private market.

In order to use a voucher under the program, a participant must find suitable housing with a landlord willing to accept Section 8 tenants, and the participant must find that housing before the voucher expires, which is usually 60 days from when it was issued. Once the participant moves into a unit, the voucher program’s housing subsidy is paid directly to the landlord through a local public housing agency, and the program participant pays the difference between the rent charged by the landlord and the amount subsidized by the housing agency.

Although Section 8 vouchers are the most common form of housing subsidy, there are other forms of housing assistance and this bill covers them as well. For example, Veterans Assistance Supportive Housing (VASH) vouchers operate similarly to Section 8 vouchers, but they are available exclusively to homeless veterans and they come with supportive case management services. Housing Opportunities for People with AIDS (HOPWA) vouchers provide housing assistance and related supportive services for low-income persons living with HIV/AIDS and their families.

1. The role of vouchers in combatting homelessness. A 2015 HUD study concluded that, of several alternative methods for addressing family homelessness, housing vouchers are the most successful.^[3] (See the Senate Judiciary Committee Analysis of this bill for more details on the study’s conclusions.) These results are consistent with other research that has shown housing vouchers to be an effective way to address homelessness and its consequences.^[4]
2. Evidence that many landlords are refusing to accept housing vouchers. There is both statistical and anecdotal evidence showing that many landlords refuse to take housing vouchers. “Success rates” measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by HUD found that the national success rate was just 69 percent. It was even lower in high demand markets such as Los Angeles. ^[5] More recent studies have reached similar conclusions. (See the Senate Judiciary Committee Analysis of this bill for details.)
3. Likely effect of the bill on housing rates. Several states across the country have already adopted laws that do the same thing this bill: outlaw discrimination against tenants with housing vouchers.^[6] Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination.

Studies conducted in a number of these jurisdictions have shown that prohibiting discrimination against housing voucher holders leads to higher rates of housing for them. (See the Senate Judiciary Committee Analysis of this bill for details on the results of these studies.)

1. Bill only prohibits discrimination; landlords retain other rights. While this bill prohibits landlords from discriminating against tenants on the basis of their participation in a housing voucher program, landlords would remain free to reject tenancy applications from program participants, provided they do so on otherwise lawful grounds that are not based on a participant’s receipt of a housing subsidy. Landlords would also remain free to charge rents as allowed under law, and would not be required to reduce rents even if chosen rent levels would make a unit too expensive for a voucher holder to afford. Further, landlords would continue to be able to use appropriate financial and income standards in making rental decisions, like verifying income levels or checking creditworthiness. However, landlords would no longer have the option to forgo participation in housing subsidy programs when presented with a prospective tenant who is qualified to rent from them in all other respects.
2. Landlord requirements associated with housing vouchers. From the landlord’s perspective, renting to a tenant who will pay part or all of the rent with a housing voucher is not as simple as just moving the person in and accepting rent payments. Before the federal government will subsidize rent payments to a landlord on behalf of a tenant, the landlord must comply with certain requirements. Those requirements may include: attending an informational session regarding the landlord’s rights and responsibilities as a participant in a housing voucher program; scheduling and passing a HUD Housing Quality Standards inspection to ensure the property meets minimum residential housing codes; and executing a lease that complies with the housing voucher program’s lease requirements.^[7]

Landlords who currently refuse to accept housing voucher holders as tenants avoid these requirements in the process. If this bill were enacted, landlords could sometimes be put in the position of needing to go through these requirements.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

According to the Assembly Appropriations Committee, costs (GF) of between $400,000 to $714,000 in FY 2020-21 and $385,000 to $686,000 in FY 2021-22 to DFEH for four to seven additional staff members to address approximately 94 to 164 new housing complaints.

SUPPORT: (Verified 9/10/19)

California Rural Legal Assistance Foundation (co-source)

Housing California (co-source)

National Housing Law Project (co-source)

Western Center on Law and Poverty (co-source)

American Civil Liberties Union of California

American Federation of State, County and Municipal Employees, AFL-CIO

Aspiranet

Bay Area Legal Aid

California Coalition for Youth

California Protective Parents Association

California State Association of Counties

California YIMBY

Central California Legal Services

City of Glendale

City of Santa Monica

City of West Hollywood

Corporation for Supportive Housing

County of Santa Clara

Disability Rights California

Disability Rights Education & Defense Fund

Downtown Women’s Center, Los Angeles

Eric Garcetti, Mayor, City of Los Angeles

Fair Housing Council of the San Fernando Valley

Family Violence Appellate Project

Family Violence Law Center, Alameda County

Jewish Family Service of Los Angeles

Lassen Family Services

Law Foundation of Silicon Valley

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Legal Aid Foundation of Los Angeles

Los Angeles County Board of Supervisors

Los Angeles Homeless Services Authority

National Association of Social Workers – California Chapter

Public Interest Law Project

State Council on Developmental Disabilities

Strategic Actions for a Just Economy

Su Casa – Ending Domestic Violence, Long Beach

Tri-Valley Haven, Alameda County

United Domestic Workers of America – AFSCME Local 3930/AFL-CIO

Voices for Progress

Two individuals

OPPOSITION: (Verified 9/10/19)

Affordable Housing Management Association, Pacific Southwest

Apartment Association of Orange County

Apartment Association, Southern California Cities

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Rental Housing Association

East Bay Rental Housing Association

Southern California Rental Housing Association

Five individuals

ARGUMENTS IN SUPPORT: According to the author:

Voucher holders are a vulnerable population who are at a higher risk to become homeless due to their socioeconomic status. In order to address the homelessness issue, we need to support low-income populations so that they can find suitable housing.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

In further support of this bill, the Los Angeles Homeless Services Authority writes:

Rental subsidies are a key tool to combatting homelessness and providing stability to families that would otherwise be vulnerable to or at-risk of falling into homelessness. […] The effectiveness of these resources is strained by a competitive housing market. The utilization rate for new Section 8 vouchers in Los Angeles County has fallen to about 52%, meaning many households are unable to find landlords or units that are willing to accept this resource. […] Non-profit service providers report that landlords rejecting Rapid Re-Housing or other subsidies is a common problem curtailing the ability to effectively use these tools.

ARGUMENTS IN OPPOSITION: In opposition to this bill, a coalition of organizations representing businesses, landlords, realtors, and developers writes:

We agree that Section 8 vouchers play an important role in helping low-income Californians find housing, and many property owners participate in the program. However, because of the significant number of challenges associated with the program, a statewide mandate is not feasible for property owners or for housing authorities. […]

The Section 8 approval process is time consuming and difficult to understand, with little assistance available to owners through the housing authorities. It includes a very lengthy document preparation process that owners and tenants must complete. Many small rental property owners simply do not have the time or resources to maneuver the long and complicated process. […]

In further opposition to the bill, the California Association of Realtors writes:

Under SB 329 […], EVERY residential rental property owner will be effectively forced to enter into a contract with the local housing authority requiring they accept tenants who use Section 8 housing vouchers to pay a portion of their rent. […] Instead of fixing Section 8 by remedying this and other problems to attract more landlords to voluntarily participate in the program, SB 329 creates new mandates. […]

ASSEMBLY FLOOR: 46-21, 9/10/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bloom, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooley, Friedman, Gabriel, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, Quirk, Quirk-Silva, Reyes, Luz Rivas, Robert Rivas, Santiago, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NOES: Bigelow, Boerner Horvath, Brough, Chen, Cunningham, Diep, Flora, Fong, Frazier, Gallagher, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Petrie-Norris, Smith, Voepel, Waldron

NO VOTE RECORDED: Arambula, Choi, Cooper, Daly, Eggman, Gray, Irwin, O'Donnell, Ramos, Rodriguez, Blanca Rubio, Salas

Prepared by: Timothy Griffiths / JUD. / (916) 651-4113

9/10/19 22:08:26

**** END ****

1. Rice, Dohler, and Mazzara, How Housing Vouchers Can Help Address California’s Rental Crisis (Feb. 12, 2016) The Center for Budget and Policy Priorities https://www.cbpp.org/research/housing/how-housing-vouchers-can-help-address-californias-rental-crisis (as of Mar. 10, 2019). ↑

2. See Housing Choice Vouchers Fact Sheet, U.S. Department of Housing and Urban Development https://www.hud.gov/topics/housing_choice_voucher_program_section_8 [as of Apr. 4, 2019].). ↑

3. Gubits et al, Family Options Study: Short-Term Impacts of Housing and Services Interventions for Homeless Families (July 2015) U.S. Department of Housing and Urban Development https://www.huduser.gov/portal/sites/default/files/pdf/FamilyOptionsStudy_final.pdf (as of Apr. 4, 2019) at p. xxx. ↑

4. Fischer, Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children (Oct. 7, 2015) Center on Budget and Policy Priorities https://www.cbpp.org/research/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term-gains (as of Apr. 4, 2019). ↑

5. Finkel and Buron, Study on Section 8 Voucher Success Rates (2001) U.S. Department of Housing and Urban Development https://www.huduser.gov/publications/pdf/sec8success.pdf (as of Apr. 4, 2019) at p. ii. ↑

6. Connecticut, District of Columbia, Maine, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, and Vermont. Texas law, by contrasts, preempts any local ordinance that would otherwise ban discrimination against voucher holders. See Source of Income Discrimination in Housing, Affordable Housing Online https://affordablehousingonline.com/source-of-income-antidiscrimination-laws (as of Apr. 27, 2019). ↑

7. See How Landlords can Help End Veteran Homelessness, U.S. Department of Veterans Affairs https://www.va.gov/homeless/docs/landlords_factsheet.pdf (as of Apr. 5, 2019). ↑

SENATE THIRD READING

STR Bill Id:SB 329

Author:(Mitchell)

As Amended Ver:September 6, 2019

Majority vote

SUMMARY:

Prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher.

Major Provisions

1. Expands Federal Employment and Housing Act's (FEHA) definition of "source of income" to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the U.S. Housing Act of 1937.
2. States that it is the intent of the Legislature to provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing.

COMMENTS:

Background: California's high housing costs dramatically worsen poverty. Under the U.S. Census Bureau's official poverty measure, 16% of Californians lived in poverty in 2013, but this measure does not take into account differences in living costs across the country or count non-cash benefits such as rent subsidies as income. After adjusting for these factors, California's poverty rate jumps to 23%, primarily due to high housing. California also has a large and growing population of people experiencing homelessness.

Housing Choice Vouchers: According to the Center for Budget Priorities, 300,000 Californians receive Housing Choice Vouchers, more commonly called "Section 8 vouchers." The federal voucher program includes Section 8 vouchers which are broadly available to lower income individuals and families and Veterans Affairs Supportive Housing (VASH) vouchers for lower income or homeless veterans. To qualify for a voucher, a tenant's income cannot exceed 50% of the county average median income. A voucher holder is required to pay 30% of their income toward rent and the remaining percentage is subsidized by the Federal government. In addition, a voucher holder must find a landlord that will accept a voucher within 60 days of receiving the voucher or it expires.

Existing law prohibits landlords from discriminating against a tenant based on their source of income, however, it defines source of income as verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. Because rent payments for a poriton of a voucher holder's rent are paid by the Federal Govnernment landlords can refuse to accept the voucher.

Requirements on landlords: Landlords are not required to reduce the rent if they accept a Section 8 voucher. A tenant pays their portion of the rent directly to the landlord and the remaining potion is paid by the local housing authority which awards and administers the vouchers on behalf of the federal government. The housing authority verifies a voucher applicant's source of income and assets before they can be eligible to receive a voucher. To be eligible to accept a voucher, a landlord is required to attend class and have their property inspected for basic code violations.

Although this bill would prohibit landlords from discriminating against tenants with Section 8 vouchers, they would be able to reject a tenant based on all other lawful grounds, provided it was not because the tenant is a paying rent with a voucher. Also, landlords would be free to screen tenants using existing methods including verifying income and checking creditworthiness.

Evidence that discrimination exists: This bill would prohibit landlords from discriminating against a tenant with a Section 8 voucher. There is both statistical and anecdotal evidence showing that landlords refuse to take housing vouchers. "Success rates" measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by the U.S. Department of Housing and Urban Development (HUD) found that the national success rate was just 69%. It was even lower in high demand markets such as Los Angeles.

More recent studies have reached similar conclusions. A 2018 investigation commissioned by HUD and carried out by the Urban Institute found that, nationally, an average of one in 40 advertised rental housing units was potentially eligible for rental with a Section 8 voucher. In Los Angeles, the figure was closer to one in 50. When the investigators called the potentially available units and asked, "Do you accept housing vouchers?" 76% of Los Angeles landlords said no. Veterans have a harder time securing housing using a VASH voucher than families and individuals with Section 8 vouchers. The Los Angeles Housing Authority reports data showing, for instance, that VASH housing vouchers have the lowest success rate amongst housing vouchers the Authority issues. The success rate for general (non-veteran) Section 8 recipients is 60%. The success rate for the Authority's other non-veteran housing vouchers is 67%. By comparison, the success rate for HUD-VASH vouchers is a mere 33%.

Several states across the country have already adopted laws to outlaw discrimination against tenants with housing vouchers. Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination. According to the author, both the City and County of Los Angeles are currently considering instituting such a ban as well.

According to the Author:

It is widely understood that the zip codes in which people live and grow up are a huge determinant of life expectancy as well as health and educational outcomes. In addition, the impacts of housing insecurity and, conversely, a stable and affordable home on a family's ability to exit poverty and achieve success with respect to a range of outcomes are well documented. This bill aims to give households receiving housing assistance, such as Section 8 vouchers and local subsidies, an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment. Research shows that when assisted households can access low-poverty, high-opportunity neighborhoods utilizing their housing assistance, they are better able to afford basic necessities and are more likely to make expenditures improving family health - in turn, allowing their children to focus on education and development.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

Arguments in Support:

The sponsors of this bill, write to clarify several concerns that have been raised with this bill, "The bill does not require landlords to accept any tenant with housing assistance, does not prohibit landlords from screening for tenant suitability, and does nothing to prevent landlords from setting their rents at desired levels. It simply requires landlords to give families that receive housing assistance the same consideration as other families who wish to apply. There have also been claims this bill would increase the burden on local housing authorities. The bill, in fact, would not significantly alter the administration of the Section 8 Voucher program or other assistance programs; HUD authorizes Housing Authorities to use only a limited number of vouchers each year, and SB 329 would not increase the amount of assistance available or the burden on local housing authorities in the state. To the contrary, the bill ensures the efficient use of existing housing assistance by increasing the likelihood that families are able to find a landlord who will accept it, as opposed to returning their assistance for reprocessing because it has expired."

Arguments in Opposition:

Opponents argue that SB 329 strips away property owner's choice to contract or not contract with a property they own. They contend that the Section 8 approval process for landlords is complicated and can take up to 60 days, delaying their ability to collect rent. In addition, opponents contend landlords will face higher insurance rates if they accept Section 8 vouchers. Although insurance companies cannot deny coverage to a landlord that accepts a voucher, they can raise the rates.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, costs (General Fund) of between $400,000 to $714,000 in fiscal year (FY) 2020-21 and $385,000 to $686,000 in FY 2021-22 to the Department of Fair Employment and Housing (DFEH) for four to seven additional staff members to address approximately 94 to 164 new housing complaints.

VOTES:

SENATE FLOOR: 24-11-3

YES: Allen, Atkins, Beall, Bradford, Caballero, Dodd, Durazo, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener

NO: Archuleta, Bates, Borgeas, Chang, Grove, Jones, Moorlach, Morrell, Nielsen, Stone, Wilk

ABS, ABST OR NV: Galgiani, Glazer, Roth

ASM HOUSING AND COMMUNITY DEVELOPMENT: 5-1-2

YES: Chiu, Gabriel, Gloria, Limón, Quirk-Silva

NO: Diep

ABS, ABST OR NV: Kiley, Maienschein

ASM JUDICIARY: 7-3-2

YES: Mark Stone, Chau, Chiu, Gonzalez, Holden, Kalra, Reyes

NO: Gallagher, Kiley, Obernolte

ABS, ABST OR NV: Maienschein, Petrie-Norris

ASM APPROPRIATIONS: 11-5-2

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Quirk, Robert Rivas

NO: Bigelow, Brough, Diep, Fong, Obernolte

ABS, ABST OR NV: Maienschein, Petrie-Norris

UPDATED:

VERSION: September 6, 2019

CONSULTANT: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0002087

SENATE THIRD READING

STR Bill Id:SB 329

Author:(Mitchell)

As Amended Ver:May 17, 2019

Majority vote

SUMMARY:

Prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher.

Major Provisions

1. Expands Federal Employment and Housing Act's (FEHA) definition of "source of income" to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the United States (U.S.) Housing Act of 1937.
2. States that it is the intent of the Legislature to provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing.

COMMENTS:

Background: California's high housing costs dramatically worsen poverty. Under the U.S. Census Bureau's official poverty measure, 16% of Californians lived in poverty in 2013, but this measure does not take into account differences in living costs across the country or count non-cash benefits such as rent subsidies as income. After adjusting for these factors, California's poverty rate jumps to 23%, primarily due to high housing. California also has a large and growing population of people experiencing homelessness.

Housing Choice Vouchers: According to the Center for Budget Priorities, 300,000 Californians receive Housing Choice Vouchers, more commonly called "Section 8 vouchers." The federal voucher program includes Section 8 vouchers which are broadly available to lower income individuals and families and Veterans Affairs Supportive Housing (VASH) vouchers for lower income or homeless veterans. To qualify for a voucher, a tenant's income cannot exceed 50% of the county average median income. A voucher holder is required to pay 30% of their income toward rent and the remaining percentage is subsidized by the Federal government. In addition, a voucher holder must find a landlord that will accept a voucher within 60 days of receiving the voucher or it expires.

Existing law prohibits landlords from discriminating against a tenant based on their source of income, however, it defines source of income as verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. Because rent payments for a poriton of a voucher holder's rent are paid by the Federal Govnernment landlords can refuse to accept the voucher.

Requirements on landlords: Landlords are not required to reduce the rent if they accept a Section 8 voucher. A tenant pays their portion of the rent directly to the landlord and the remaining potion is paid by the local housing authority which awards and administers the vouchers on behalf of the federal government. The housing authority verifies a voucher applicant's source of income and assets before they can be eligible to receive a voucher. To be eligible to accept a voucher, a landlord is required to attend class and have their property inspected for basic code violations.

Although this bill would prohibit landlords from discriminating against tenants with Section 8 vouchers, they would be able to reject a tenant based on all other lawful grounds, provided it was not because the tenant is a paying rent with a voucher. Also, landlords would be free to screen tenants using existing methods including verifying income and checking creditworthiness.

Evidence that discrimination exists: This bill would prohibit landlords from discriminating against a tenant with a Section 8 voucher. There is both statistical and anecdotal evidence showing that landlords refuse to take housing vouchers. "Success rates" measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by the U.S. Department of Housing and Urban Development (HUD) found that the national success rate was just 69%. It was even lower in high demand markets such as Los Angeles.

More recent studies have reached similar conclusions. A 2018 investigation commissioned by HUD and carried out by the Urban Institute found that, nationally, an average of one in 40 advertised rental housing units was potentially eligible for rental with a Section 8 voucher. In Los Angeles, the figure was closer to one in 50. When the investigators called the potentially available units and asked, "Do you accept housing vouchers?" 76% of Los Angeles landlords said no. Veterans have a harder time securing housing using a VASH voucher than families and individuals with Section 8 vouchers. The Los Angeles Housing Authority reports data showing, for instance, that VASH housing vouchers have the lowest success rate amongst housing vouchers the Authority issues. The success rate for general (non-veteran) Section 8 recipients is 60%. The success rate for the Authority's other non-veteran housing vouchers is 67%. By comparison, the success rate for HUD-VASH vouchers is a mere 33%.

Several states across the country have already adopted laws to outlaw discrimination against tenants with housing vouchers. Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination. According to the author, both the City and County of Los Angeles are currently considering instituting such a ban as well

According to the Author:

It is widely understood that the zip codes in which people live and grow up are a huge determinant of life expectancy as well as health and educational outcomes. In addition, the impacts of housing insecurity and, conversely, a stable and affordable home on a family's ability to exit poverty and achieve success with respect to a range of outcomes are well documented. This bill aims to give households receiving housing assistance, such as Section 8 vouchers and local subsidies, an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment. Research shows that when assisted households can access low-poverty, high-opportunity neighborhoods utilizing their housing assistance, they are better able to afford basic necessities and are more likely to make expenditures improving family health - in turn, allowing their children to focus on education and development.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

Arguments in Support:

The sponsors of the bill, write to clarify several concerns that have been raised with the bill, "The bill does not require landlords to accept any tenant with housing assistance, does not prohibit landlords from screening for tenant suitability, and does nothing to prevent landlords from setting their rents at desired levels. It simply requires landlords to give families that receive housing assistance the same consideration as other families who wish to apply. There have also been claims this bill would increase the burden on local housing authorities. The bill, in fact, would not significantly alter the administration of the Section 8 Voucher program or other assistance programs; HUD authorizes Housing Authorities to use only a limited number of vouchers each year, and SB 329 would not increase the amount of assistance available or the burden on local housing authorities in the state. To the contrary, the bill ensures the efficient use of existing housing assistance by increasing the likelihood that families are able to find a landlord who will accept it, as opposed to returning their assistance for reprocessing because it has expired."

Arguments in Opposition:

Opponents argue that this bill strips away property owner's choice to contract or not contract with a property they own. They contend that the Section 8 approval process for landlords is complicated and can take up to 60 days, delaying their ability to collect rent. In addition, opponents contend landlords will face higher insurance rates if they accept Section 8 vouchers. Although insurance companies cannot deny coverage to a landlord that accepts a voucher, they can raise the rates

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, Costs (General Fund) of between $400,000 to $714,000 in Fiscal Year (FY) 2020-21 and $385,000 to $686,000 in FY 2021-22 to the Department of Fair Employment and Housing (DFEH) for four to seven additional staff members to address approximately 94 to 164 new housing complaints.

VOTES:

SENATE FLOOR: 24-11-3

YES: Allen, Atkins, Beall, Bradford, Caballero, Dodd, Durazo, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener

NO: Archuleta, Bates, Borgeas, Chang, Grove, Jones, Moorlach, Morrell, Nielsen, Stone, Wilk

ABS, ABST OR NV: Galgiani, Glazer, Roth

ASM HOUSING AND COMMUNITY DEVELOPMENT: 5-1-2

YES: Chiu, Gabriel, Gloria, Limón, Quirk-Silva

NO: Diep

ABS, ABST OR NV: Kiley, Maienschein

ASM JUDICIARY: 7-3-2

YES: Mark Stone, Chau, Chiu, Gonzalez, Holden, Kalra, Reyes

NO: Gallagher, Kiley, Obernolte

ABS, ABST OR NV: Maienschein, Petrie-Norris

ASM APPROPRIATIONS: 11-5-2

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Quirk, Robert Rivas

NO: Bigelow, Brough, Diep, Fong, Obernolte

ABS, ABST OR NV: Maienschein, Petrie-Norris

UPDATED:

VERSION: May 17, 2019

CONSULTANT: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0001598

Date of Hearing: July 10, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 329

Author:(Mitchell) – As Amended Ver:May 17, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher.

FISCAL EFFECT:

Costs (GF) of between $400,000 to $714,000 in FY 2020-21 and $385,000 to $686,000 in FY 2021-22 to the Department of Fair Employment and Housing (DFEH) for four to seven additional staff members to address approximately 94 to 164 new housing complaints.

COMMENTS:

1. Purpose. According to the author:

This bill aims to give households…an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment.

1. Housing Discrimination. Existing law prohibits housing discrimination against a tenant because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability or genetic information. “Source of income” is defined as lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. For the purposes of this definition, a landlord is not considered a representative of a tenant.
2. Section 8 housing and the Fair Employment and Housing Act. Section 8 housing is defined in 42 U.S.C. section 1437f, subdivision (a) as housing payment assistance for the purpose of aiding low-income families in “obtaining a decent place to live and of promoting economically mixed housing.” The definition of “source of income” should include tenants receiving Section 8 vouchers given that Section 8 vouchers are lawful, verified income. However, case law has expressly held “source of income” does not include Section 8 vouchers because Section 8 payments are made directly to a landlord. Sabi v. Sterling (2010) 183 Cal.App.4th 916, 927.
   
   However, the intent of the Fair Employment and Housing Act is to prevent, among other things, housing discrimination based on income. This should include tenants receiving Section 8 housing vouchers. Furthermore, according to the California Department of Housing and Community Development, only about 5% of landlords contract with public housing authorities to accept Section 8 vouchers. Most Section 8 tenants do not change residences for long periods of time. This bill will likely affect only new voucher recipients or the small minority of Section 8 recipients that change residences. Therefore, it does not seem likely DFEH will see 100 new applications for housing discrimination by expanding the definition of source of income to include Section 8 housing vouchers.
3. Related Legislation.
   1. SB 521 (Portantino) provides a tax credit to landlords who rent property to Section 8 voucher holders. SB 521 is pending in the Assembly Revenue and Taxation Committee.
   2. SB 222 (Hill) prohibits landlords from turning away prospective tenants based on their potential use of Veterans Affairs Supportive Housing vouchers as a source of income. SB 222 is pending on the Assembly Judiciary Committee.

Analysis Prepared by: Kimberly Horiuchi / APPR. / (916) 319-2081

SENATE THIRD READING

STR Bill Id:SB 329

Author:(Mitchell)

As Amended Ver:May 17, 2019

Majority vote

SUMMARY:

Prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher.

Major Provisions

1. Expands Federal Employment and Housing Act's (FEHA) definition of "source of income" to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the United States Housing Act of 1937.
2. States that it is the intent of the Legislature to provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing.

COMMENTS:

Background: California's high housing costs dramatically worsen poverty. Under the United States Census Bureau's official poverty measure, 16% of Californians lived in poverty in 2013, but this measure does not take into account differences in living costs across the country or count non-cash benefits such as rent subsidies as income. After adjusting for these factors, California's poverty rate jumps to 23%, primarily due to high housing. California also has a large and growing population of people experiencing homelessness.

Housing Choice Vouchers: According to the Center for Budget Priorities, 300,000 Californians receive Housing Choice Vouchers, more commonly called "Section 8 vouchers." The federal voucher program includes Section 8 vouchers which are broadly available to lower income individuals and families and VASH vouchers for lower income or homeless veterans. To qualify for a voucher, a tenant's income cannot exceed 50% of the county average median income. A voucher holder is required to pay 30% of their income toward rent and the remaining percentage is subsidized by the Federal government. In addition, a voucher holder must find a landlord that will accept a voucher within 60 days of receiving the voucher or it expires.

Existing law prohibits landlords from discriminating against a tenant based on their source of income, however, it defines source of income as verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. Because rent payments for a poriton of a voucher holder's rent are paid by the Federal Govnernment landlords can refuse to accept the voucher.

Requirements on landlords: Landlords are not required to reduce the rent if they accept a Section 8 voucher. A tenant pays their portion of the rent directly to the landlord and the remaining potion is paid by the local housing authority which awards and administers the vouchers on behalf of the federal government. The housing authority verifies a voucher applicant's source of income and assets before they can be eligible to receive a voucher. To be eligible to accept a voucher, a landlord is required to attend class and have their property inspected for basic code violations.

Although this bill would prohibit landlords from discriminating against tenants with Section 8 vouchers, they would be able to reject a tenant based on all other lawful grounds, provided it was not because the tenant is a paying rent with a voucher. Also, landlords would be free to screen tenants using existing methods including verifying income and checking creditworthiness.

Evidence that discrimination exists: This bill would prohibit landlords from discriminating against a tenant with a Section 8 voucher. There is both statistical and anecdotal evidence showing that landlords refuse to take housing vouchers. "Success rates" measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by HUD found that the national success rate was just 69%. It was even lower in high demand markets such as Los Angeles.

More recent studies have reached similar conclusions. A 2018 investigation commissioned by HUD and carried out by the Urban Institute found that, nationally, an average of one in 40 advertised rental housing units was potentially eligible for rental with a Section 8 voucher. In Los Angeles, the figure was closer to one in 50. When the investigators called the potentially available units and asked, "Do you accept housing vouchers?" 76% of Los Angeles landlords said no. Veterans have a harder time securing housing using a VASH voucher than families and individuals with Section 8 vouchers. The Los Angeles Housing Authority reports data showing, for instance, that VASH housing vouchers have the lowest success rate amongst housing vouchers the Authority issues. The success rate for general (non-veteran) Section 8 recipients is 60%. The success rate for the Authority's other non-veteran housing vouchers is 67%. By comparison, the success rate for HUD-VASH vouchers is a mere 33%.

Several states across the country have already adopted laws to outlaw discrimination against tenants with housing vouchers. Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination. According to the author, both the City and County of Los Angeles are currently considering instituting such a ban as well

According to the Author:

It is widely understood that the zip codes in which people live and grow up are a huge determinant of life expectancy as well as health and educational outcomes. In addition, the impacts of housing insecurity and, conversely, a stable and affordable home on a family's ability to exit poverty and achieve success with respect to a range of outcomes are well documented. This bill aims to give households receiving housing assistance, such as Section 8 vouchers and local subsidies, an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment. Research shows that when assisted households can access low-poverty, high-opportunity neighborhoods utilizing their housing assistance, they are better able to afford basic necessities and are more likely to make expenditures improving family health - in turn, allowing their children to focus on education and development.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

Arguments in Support:

The sponsors of this bill, write to clarify several concerns that have been raised with the bill, "The bill does not require landlords to accept any tenant with housing assistance, does not prohibit landlords from screening for tenant suitability, and does nothing to prevent landlords from setting their rents at desired levels. It simply requires landlords to give families that receive housing assistance the same consideration as other families who wish to apply. There have also been claims this bill would increase the burden on local housing authorities. The bill, in fact, would not significantly alter the administration of the Section 8 Voucher program or other assistance programs; HUD authorizes Housing Authorities to use only a limited number of vouchers each year, and SB 329 would not increase the amount of assistance available or the burden on local housing authorities in the state. To the contrary, the bill ensures the efficient use of existing housing assistance by increasing the likelihood that families are able to find a landlord who will accept it, as opposed to returning their assistance for reprocessing because it has expired."

Arguments in Opposition:

Opponents argue that this bill strips away property owner's choice to contract or not contract with a property they own. They contend that the Section 8 approval process for landlords is complicated and can take up to 60 days, delaying their ability to collect rent. In addition, opponents contend landlords will face higher insurance rates if they accept Section 8 vouchers. Although insurance companies cannot deny coverage to a landlord that accepts a voucher, they can raise the rates

FISCAL COMMENTS:

Unknown. This bill is keyed non-fiscal by the Legislative Counsel.

VOTES:

SENATE FLOOR: 24-11-3

YES: Allen, Atkins, Beall, Bradford, Caballero, Dodd, Durazo, Hertzberg, Hill, Hueso, Hurtado, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener

NO: Archuleta, Bates, Borgeas, Chang, Grove, Jones, Moorlach, Morrell, Nielsen, Stone, Wilk

ABS, ABST OR NV: Galgiani, Glazer, Roth

ASM HOUSING AND COMMUNITY DEVELOPMENT: 5-1-2

YES: Chiu, Gabriel, Gloria, Limón, Quirk-Silva

NO: Diep

ABS, ABST OR NV: Kiley, Maienschein

ASM JUDICIARY: 7-3-2

YES: Mark Stone, Chau, Chiu, Gonzalez, Holden, Kalra, Reyes

NO: Gallagher, Kiley, Obernolte

ABS, ABST OR NV: Maienschein, Petrie-Norris

UPDATED:

VERSION: May 17, 2019

CONSULTANT: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0001167

Date of Hearing: June 25, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 329

Author:(Mitchell) – As Amended Ver:May 17, 2019

SENATE VOTE: 24-11

SUBJECT: Discrimination: housing: source of income

KEY ISSUE: SHOULD CALIFORNIA PROHIBIT DISCRIMINATION AGAINST RECIPIENTS OF GOVERNMENTAL RENTAL ASSISTANCE, AND IN SO DOING, FORBID COVERT DISCRIMINATION, INCREASE HOUSING STABILITY, FIGHT HOMELESSNESS, AND POTENTIALLY TAKE ADVANTAGE OF MILLIONS OF DOLLARS IN CURRENTLY UNUSED FEDERAL FUNDING?

SYNOPSIS

This bill would prohibit landlords from discriminating against prospective tenants who receive federal, state, or local assistance to pay their rent. The most notable forms of such assistance are Housing Choice Vouchers (popularly known as “Section 8 vouchers”) and Veterans Affairs Supportive Housing (VASH) vouchers, both of which are funded by the federal government and administered by local housing authorities. The number of such vouchers is strictly limited by federal funding; individuals and families spend years on wait lists before receiving a voucher, and then have a very limited amount of time to find a landlord who will rent to them, which can be extremely difficult; otherwise, they forfeit their vouchers and, if they are unable to find market-rate housing, will likely become homeless.

SB 329 provides only one thing: a right for voucher holders to apply for housing. According to the author and supporters of the bill, pervasive, false negative stereotypes about voucher holders must be combated with antidiscrimination legislation. The alternative, they contend, is for more families who could be housed to fall into homelessness, and for the state to sacrifice several hundred million dollars in available federal funding every year. The analysis reviews how SB 329 does not force a landlord to contract with a housing authority. It also analyzes issues of federal preemption and concludes that SB 329 is not preempted by federal law.

This bill is co-sponsored by California Association of Housing Authorities, California Rural Legal Assistance Foundation, Housing California, Los Angeles County Board of Supervisors, National Housing Law Project, and the Western Center on Law & Poverty. It is opposed by seven associations for the rental housing industry, two associations for the real estate industry, and two other trade associations.

SUMMARY: Prohibits housing discrimination against individuals who receive public assistance with their rental payments, including holders of Section 8 vouchers. Specifically, this bill:

1. States the intention of the Legislature “to provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing.”
2. Expands the definition of “source of income” under FEHA to include federal, state, or local public assistance and housing subsidies paid to a housing owner or landlord, including, but not limited to, Housing Choice and Veterans Affairs Supportive Housing vouchers issued by the federal government under Section 8 of the United States Housing Act of 1937.

EXISTING LAW:

1. Defines “source of income” under FEHA to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. Clarifies that, under this definition, a landlord is not considered a representative of a tenant. (Government Code Sections 12927, 12955 (p)(1).)
2. Declares it to be against public policy, pursuant to FEHA, to practice discrimination in housing accommodations on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information; and declares further that every person has a civil right to seek, obtain, or hold housing without facing discrimination based on these protected classes. (Government Code Sections 12920, 12921 (b).)
3. Declares it unlawful, pursuant to FEHA, for the owner of any housing accommodation to inquire about; make known any preference or limitation as to; discriminate against; or harass, a person based on the person’s race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information. (Government Code Section 12955 (a) - (c).)
4. Clarifies, for the purposes of FEHA, that making a written or oral inquiry regarding the level or source of income does not constitute discrimination based on source of income. (Government Code Section 12955 (p)(2).)
5. Establishes the Department of Fair Employment and Housing (DFEH) in the Business, Consumer Services, and Housing Agency with the powers and duties to, among other things, receive, investigate, conciliate, mediate, and/or prosecute complaints relating to housing discrimination. (Government Code Sections 12901, 12930.)
6. Authorizes housing assistance payments, as part of the United States Housing Act of 1937, “[f]or the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing….” (42 U.S.C. Section 1437f (a).)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: This bill would extend FEHA’s housing nondiscrimination provisions to recipients of local, state, and federal housing subsidies, including Section 8 vouchers.

Background. SB 329 would, at its core, prohibit landlords from discriminating against prospective tenants who are recipients of federal Housing Choice Vouchers, popularly known as “Section 8 vouchers,” as well as other forms of government-administered rental housing assistance, such as Veterans Affairs Supportive Housing (VASH) vouchers. In addition, the bill would prohibit discrimination against renters who use local subsidies designed to combat rising homelessness. Such subsidies are increasingly available by California cities and counties in an attempt to stabilize struggling families.

The Section 8 program is administered at the federal level by the U.S. Department of Housing and Urban Development (HUD), and at the local level by public housing authorities. The program ostensibly enables low-income individuals and families to obtain subsidized housing through the private rental market. Under the Section 8 program, a tenant household generally pays 30% of its annual income towards rent, with the housing authority paying the rest. (42 U.S.C. Section 1437f (o)(2), (3).) To qualify for a voucher, an individual’s or family’s income cannot exceed the guidelines established by HUD. As of 2018, approximately 301,100 California households received Section 8 vouchers. (See Center on Budget and Policy Priorities, Federal Rental Assistance Fact Sheets, available at https://www.cbpp.org/research/housing/federal-rental-assistance-fact-sheets#CA.)

Unfortunately, there appears to be both insufficient vouchers, both nationally and in California, to meet the demand for affordable rental housing and an inadequate supply of housing where such vouchers can be used. Applicants must usually sit on wait lists for years before becoming eligible for a voucher. Once an individual or family is approved for a voucher, they generally have a limited period of time, often as little as 60 days, in order to find a landlord that is both willing to rent to them and that meets HUD’s and the housing authority’s guidelines. A voucher holder who is unable to find such a landlord within the allotted time forfeits the voucher, which is subsequently issued to the next person on the wait list.

The task of finding a landlord is onerous and complicated by the fact that discrimination against Section 8 voucher holders is perfectly legal under California law—except in those jurisdictions that have banned the practice. Searching for apartments on websites like Craigslist turns up numerous ads which state, “NO SECTION 8,” an echo of earlier times when it was legal for California landlords to publish rental listings which included phrases like, “NO BLACKS,” “NO MEXICANS,” and “NO WELFARE OR SSI.” As with these earlier, now-banned forms of discrimination, some landlords have proven unwilling to consider Section 8 voucher holders as individuals, even when voucher holders are able to afford the rent and meet other rental criteria. Instead, these landlords refuse to rent to them because of their perceived characteristics or the perceived difficulty of working with housing authorities. It is this pernicious practice which SB 329 seeks to outlaw.

Justification for the bill. The author writes:

It is widely understood that the zip codes in which people live and grow up are a huge determinant of life expectancy as well as health and educational outcomes. In addition, the impacts of housing insecurity and, conversely, a stable and affordable home on a family’s ability to exit poverty and achieve success with respect to a range of outcomes are well documented. This bill aims to give households…an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment. Research shows that when assisted households can access low-poverty, high-opportunity neighborhoods utilizing their housing assistance, they are better able to afford basic necessities and are more likely to make expenditures improving family health—in turn, allowing their children to focus on education and development.

The bill’s sponsors add:

Source of Income protections like those contained in SB 329 have been implemented locally in many parts of the State. Local governments have demonstrated that these protections work to prevent homelessness, give families a better chance of obtaining quality housing they can afford, and improve access to areas of opportunity which allow them and their children to thrive. Ending this form of discrimination was the number one housing recommendation of the Lifting Children and Families Out of Poverty Task Force, and recent research by the US Dept. of Housing and Urban Development found that it could drastically cut rates of rejection for assisted families applying for housing.

Finally, the California Coalition for Youth makes clear the importance of SB 329 for preventing youth homelessness:

California has the highest number of unaccompanied youth experiencing homelessness in the country and the second highest number of youth who are unsheltered. Solving youth homelessness is a critical part of ending California’s larger homelessness crisis because young people who experience homelessness are five times more likely than their peers to become homeless adults. For youth that are experiencing homelessness, federally subsidized housing may be available to them through the local housing authority, of which there are 105 housing authorities throughout California. Usually at any given time, less than 20% of these housing authorities have open applications. Once a youth receives a Housing Choice Voucher, they have to find an apartment. Just getting to this point of the process can be difficult enough for a youth. A youth should not be denied access to housing because they were one of the lucky ones to get a voucher or be on other public assistance.

Why is there so much opposition to a bill that would affect such a tiny percentage of the rental units and landlords in the state? The opposition’s principal argument against this bill is that it would unlawfully compel private landlords to contract with public housing authorities. Before turning to the merits of this argument, it is worth considering whether opposition to this bill is grounded in concerns about the practical burdens of Housing Assistance Payment contracts, or in inaccurate stereotypes about recipients of public assistance.

This bill would only affect a small percentage of the landlords in California. While we lack precise data on the number of rental housing units in California, U.S. Census Bureau data shows that, as of 2015, there were just under 6 million tenant households in the state. (California Department of Housing and Community Development, California’s Housing Future: Challenges and Opportunities (Feb. 2018) p. 27.) During the same time period, approximately 300,000 of these households utilized Section 8 vouchers. (Rice, Dohler, and Mazzara, The Center for Budget and Policy Priorities, How Housing Vouchers Can Help Address California’s Rental Crisis (Feb. 12, 2016) p. 1.) In other words, in 2015, only about 5% of California landlords were in contract with public housing authorities. The number of voucher holders looking for a landlord who will rent to them is much smaller than this 5%, of course, because there is extremely low turnover in the Section 8 program. Voucher holders who have found landlords to rent to them are reluctant to move unless they are certain that their new landlords will also accept their vouchers. The protections of SB 329 are necessary only for that small percentage of tenants who hold vouchers and need to move, or who are new voucher recipients.

In 2015, California’s voucher utilization rate was only 93%. That is, in 2015, Californians forfeited approximately 22,500 vouchers (meaning that the state’s economy forfeited something like $225 million in federal funding) because voucher holders were unable to find a landlord to rent to them. (See Center on Budget and Policy Priorities, National and State Housing Fact Sheets & Data (updated May 9, 2019), available at https://www.cbpp.org/research/housing/national-and-state-housing-fact-sheets-data.)

In other words, even if SB 329 meant that every voucher holder was able to find a landlord to rent to them, only 22,500 more housing units—0.375% of the total in the state—would be subject to Housing Assistance Payment contracts under a nondiscrimination law than under current law. The number of voucher holders in California is likely to remain stable for the foreseeable future, as Congress has not increased Section 8 funding in many years. SB 329 will not create a single new voucher holder.

The roots of opposition to SB 329 may lie in negative stereotypes about voucher holders. One might question why there is so much opposition to a bill like this that would, in the end, affect such a small percentage of rental units and landlords? Perhaps the real roots of the opposition to this bill are the still-pervasive negative stereotypes about voucher holders. In 2016, the California Apartment Association, one of this bill’s opponents, filed an amicus brief which provide, in pertinent part, the following:

[As plaintiff] concedes, a property associated with a Section 8 Housing Voucher Program can be branded with a stigma which can act as a negative marketing campaign against the property. […] Property owners are forced to combat the public perception in an ongoing effort to attract qualified applicants and to maximize the property’s returns. In many instances, property owners incur expenses for marketing materials and for offering incentives which the property owners would not otherwise incur. (Brief of Amicus Curiae California Apartment Association in Support of Respondents’ Position, Sacramento Manor, Inc. v. Dorothy Morris (Cal. App. Dep’t Super. Ct., Feb. 23, 2016) Sacramento County Superior Court no. 14UD08595 at 8.)

In a similar vein, just this past week, the Los Angeles Times reported:

Last fall, the Southern California Assn. of Governments appointed a committee with one voting representative from each of its six counties to discuss home building proposals. Some of the debate centered on the value of low-income housing.

At a March committee meeting, the Los Angeles County representative, Duarte City Councilwoman Margaret Finlay, said people opposed affordable housing because they feared that those with federal Section 8 housing assistance vouchers would come into their communities and commit crimes. But she also said more cities should accept low-income developments, noting that her son’s family could have qualified for such housing while he was in graduate school.

“My point is,” she said, that building affordable housing “doesn’t necessarily mean you’re talking about ‘skid row people’ that are going to be moving into your city.”

When asked by a fellow committee member what she meant by “skid row people,” Finlay replied, “I’m talking about Section 8 housing, people that qualify for that. That was the problem in our city; they have a greater need for sheriff’s services in that particular housing area.” (Dillon, Southern California cities cite ‘chaos’ in rejecting state push for more housing, Los Angeles Times (Jun. 18, 2019).)

These statements—one, made by the state’s largest rental housing association to a court, that renting to voucher holders subjects a property to increased public stigma; the other, made by an elected official in a governmental meeting, that voucher holders have a heightened propensity to commit crime—exemplify the stereotypes that SB 329 is intended to combat. Despite the fact that there is no evidence that voucher holders or their families cause more crime or bring other negative impacts to a property or their local communities, these negative stereotypes persist.

What SB 329 would do: provide a right to apply for housing without prejudice. By expanding the definition of “source of income” to include Section 8 vouchers, SB 329 would create a right for voucher holders to apply for rental housing. In the face of such pervasive, negative stereotypes about voucher holders, it appears to be crucial—as a matter of public policy—that landlords and property managers meet face-to-face with voucher holders and see for themselves that they are desirable tenants. This is particularly true given the fact that voucher holders are often people who are already in protected categories under federal and state antidiscrimination laws. By permitting landlords to categorically refuse to rent to voucher holders, California is, by proxy, permitting landlords to refuse to rent to female-headed households, racial minorities, people with disabilities, and the elderly. (See National Low-Income Housing Coalition, Who Lives in Federally Assisted Housing, (Nov. 2012) Housing Spotlight, vol. 2, issue 2, available at https://nlihc.org/sites/default/files/HousingSpotlight2-2.pdf.) Laws protecting these groups from housing discrimination become meaningless if a permissible form of discrimination screens them out.

SB 329 would not force any landlord to contract with a housing authority. If this bill were enacted, here is how the rental application process would typically work:

1. A landlord with a housing unit to rent would be forbidden to use phrases like “No Section 8” in any rental listing or otherwise rule out renting to a voucher holder. However, the landlord would be free to set the monthly rent as high as the landlord wished, even if that rent would exceed the payment standard set by the local housing authority. The landlord would also be free to state this rent in any advertising for the unit.
2. A voucher holder who was interested in renting the unit would submit a rental application. If the rental application asked for the voucher holder’s source of income, the voucher holder would list the voucher along with any other household income.
3. The landlord would be required to administer the same tenant screening process to the voucher holder as the landlord does to every other applicant. The landlord could meet the voucher holder personally if the landlord was meeting the other prospective tenants personally. The landlord could determine whether the voucher holder could afford the rent, had acceptable credit, had a criminal background, and so forth. However, the landlord could not screen out the voucher holder simply because of the voucher subsidy—any more than the landlord could screen out an applicant simply because they were African-American, or from Laos, or married to a person of the same gender, or had a traditionally-Latino surname.
4. The landlord would agree to rent the unit to the applicant who best satisfied the landlord’s lawful screening criteria. That would be the voucher holder if, for example, the voucher holder had the most reliable source of income (when including the voucher), better credit, and little or no criminal history relative to the other applicants. In this case—and only in this case—the landlord would be required to rent the unit to the voucher holder.
5. The local housing authority would inspect the unit to make sure that it satisfied federally-required habitability standards. The standards are not onerous and include fundamentals like “a flush toilet in proper operating condition” and “free[dom] from dangerous levels of…carbon monoxide.” (See 24 CFR 982.401.) If the landlord chose not to make repairs requested by the housing authority, the landlord would not have to rent to the voucher holder. However, if the landlord soon after made the repairs and then rented the unit to a non-voucher holder, this would likely be construed as illegal discrimination.
6. Simultaneously with the inspection, the housing authority would conduct a rent reasonableness test to determine whether the rent being sought by the landlord was comparable to the rent for similar units in the area. If the rent were to be found unreasonably high, the landlord could not rent the unit to the voucher holder.
7. When the unit satisfied the housing authority’s standards, the landlord and the local housing authority would enter into a Housing Assistance Payment contract. The voucher holder would also have to pay the same security deposit that the landlord would charge to any other tenant as a condition of tenancy.
8. The voucher holder would thereafter pay their share of the monthly rent to the landlord, with the balance being paid by the local housing authority.

This bill is unlikely to result in frivolous lawsuits against landlords. A voucher holder who claimed to be a victim of illegal housing discrimination under FEHA would have to find a private attorney willing to represent them in court. Any attorney would have to decide whether the claim was strong enough to take the financial risk of representing the complainant on contingency.

Alternately, the voucher holder could file a complaint with the Department of Fair Employment and Housing (DFEH). DFEH typically steers complainants towards mediation and settlement.

A discrimination claim under FEHA is brought under a burden-shifting framework in which the complainant first has to make out a prima facie (that is, plausible on its face) case of discrimination. (Dept. of Fair Employment & Housing v. Sup. Ct. (2002) 99 Cal. App. 4th 896, 902.) Say, for example, that a voucher holder complains to DFEH about being denied a tenancy because of their Section 8 voucher. Say, further, that when DFEH investigates, the agency finds that the voucher holder had a significantly worse credit history than the individual to whom the apartment was rented. Therefore, it seems unlikely, under such circumstances, that the complainant would be found to have made out a prima facie case of discrimination. If DFEH declined to sue the landlord and issued a right-to-sue letter, it is also highly unlikely that a private attorney would take the case given its apparent absence of merit.

By contrast, a voucher holder would have a strong case against a landlord who continued to run Craigslist ads with the phrase “No Section 8” or refused to permit the local housing authority to inspect the apartment. In other words, the existing system for litigating housing discrimination matters has built-in safeguards to protect against frivolous complaints and unfounded cases, but allows meritorious cases to go forward.

Source of income nondiscrimination laws have been enacted by a number of California jurisdictions and variety of states. Nondiscrimination ordinances that make housing assistance a protected source of income have been enacted in the following California jurisdictions: Marin County, Santa Clara County, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Francisco, San Rafael, Santa Monica, and as of last week, Los Angeles. The cities of San Jose and Richmond, and Los Angeles County are also moving towards adopting such ordinances.

A number of these jurisdictions are employing innovative practices to reduce inspection wait times. For example, according to the Western Center on Law & Poverty, San Diego’s housing authority offers a pre-inspection program that is good for 60 days, and completes inspections in about two business days. They can also perform inspections in real time on iPads. Implementation of this bill and the need to incorporate more landlords in the voucher program will hopefully lead to similar streamlining by other housing authorities.

Other states that have passed housing nondiscrimination laws encompassing vouchers include Connecticut, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, Vermont, and Washington, as well as the District of Columbia. (See Poverty & Race Research Action Council, Expanding Choice: Practical Strategies for Building a Successful Housing Mobility Program, Appendix B (updated Jan. 30, 2019), available at https://prrac.org/pdf/AppendixB.pdf.)

The bill is a valid application of state law. A coalition of rental housing groups, including Affordable Housing Management Association-Pacific Southwest, Apartment Association of Orange County, East Bay Rental Housing Association, and Apartment Association, California Southern Cities, argues that the bill is unlawful because it “forces owners to contract with the federal government, whether they want to or not.” In support of this argument, they cite four cases: Salute v. Stratford Greens Garden Apts. (2nd Cir. 1998) 136 F. 3d 293; Knapp v. Eagle Property Management Corp. (7th Cir. 1995) 54 F.3d 1272; Dussault v. RRE Coach Lantern Holdings, LLC (Me. 2014) 86 A.3d 52; and Edwards v. Hopkins Plaza Ltd. Partnership (Minn. Ct. App. 2010) 783 N.W.2d 171.

The opposition appears to misconstrue Salute, which holds that the United States Housing Act, standing alone, does not require a landlord to rent to a Section 8 voucher holder. If Salute meant what the opponents say it does, then voucher nondiscrimination laws enacted by various jurisdictions in the Second Circuit, including Connecticut, New Jersey, and New York City, would be unenforceable. These laws are, in fact, very much enforceable. (See Commission on Human Rights & Opportunities v. Sullivan Associates (Conn. 1999) 739 A.2d 238, 246 (“The Connecticut legislature had the authority to enact a mandatory section 8 housing program in this state.”); see also Franklin Tower One, L.L.C. v. N.M. (1999) 725 A.2d 1104, 1113 (“We are confident that application of the statute’s anti-discrimination provision to protect tenants who are eligible to receive Section 8 vouchers will neither conflict with nor frustrate the objectives of Congress in enacting the Section 8 program.”).) In sum, Salute has no bearing on the enforceability of state and local laws forbidding housing discrimination against voucher holders.

Knapp, Dussault, and Edwards each address claims brought under, respectively, Wisconsin’s, Maine’s, and Minnesota’s source of income housing nondiscrimination laws. Each case turns quite specifically on the text of the particular state law, rather than on federal preemption or another doctrine that would forbid California from enacting this bill. (See Knapp, 54 F.3d at 1282 (citing policy consequences the court found disagreeable, “together with the absence of language clearly including [voucher] assistance”); Dussault, 86 A.3d at 60 (“We will not, however, read into the [statute] a mandate that landlords accept terms of tenancy that are otherwise required only if the landlord chooses to participate in a voluntary federal program.”); Edwards, 783 N.W.2d at 178 (“We are constrained by the language in the Minnesota statute….”).)

By contrast, there is at least one published California decision that is pertinent to the legality of this bill. In City and County of San Francisco v. Post (2018) 22 Cal.App.5th 121, a landlord sought to invalidate San Francisco’s source of income nondiscrimination ordinance on the grounds that it was preempted by FEHA. The First District Court of Appeals upheld the San Francisco law, finding that there was no federal preemption. Notably, the court took no issue with the ability of a local government to “outlaw[] discrimination based on a tenant’s participation in the Section 8 program.” (Id. at p. 125.)

The bill would not be preempted by federal law if it were enacted. Courts have generally recognized three forms of federal preemption of state law: express preemption, field preemption, and conflict preemption. Express preemption occurs when a federal statute contains a provision that explicitly “withdraw[s] specified powers from the States.” (Arizona v. United States (2012) 567 U.S. 387, 399.) Field preemption occurs when the “intent to displace state law altogether can be inferred from a framework of [federal] regulation so pervasive […] that Congress left no room for the States to supplement it or where there is a federal interest […] so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” (Ibid., internal quotations omitted.) Conflict preemption generally occurs in situations where it is physically impossible to comply with both federal and state regulations, or where state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” (Ibid.)

This bill does not appear to run afoul of any of these three forms of preemption. First, there is no express federal preemption of state and local voucher nondiscrimination laws, whether in statute or in regulation. Massachusetts and New Jersey enacted statutes outlawing discrimination against Section 8 voucher holders in the 1980s. Both Congress and HUD have had ample time to bar states from enacting such statutes if they so wished. Their silence speaks volumes.

Second, there is no evidence of federal field preemption. The idea that landlord participation in the Section 8 program is voluntary is generally inferred from regulatory pronouncement such as, “If the family finds a unit, and the owner is willing to lease the unit under the program, the family may request [housing authority] approval of the tenancy” (24 CFR Section 982.302), rather than anything resembling “pervasive” federal regulation around the topic of voluntariness.

Finally, as for conflict preemption, the purposes of the Section 8 program, and of federal housing assistance more broadly, include the following:

• “[A]ssist[ing] States and political subdivisions of States to remedy the unsafe housing conditions and the acute shortage of decent and safe dwellings for low-income families….” (42 U.S.C. Section 1437(a)(1)(A).)
• “[A]ssist[ing] States and political subdivisions of States to address the shortage of housing affordable to low-income families….” (42 U.S.C. Section 1437(a)(1)(B).)
• “[A]iding low-income families in obtaining a decent place to live and of promoting economically mixed housing…” (42 U.S.C. Section 1437f (a).)

The United States Housing Act makes no mention of landlord voluntariness as one of its purposes. It is therefore difficult to perceive how state laws banning voucher discrimination would conflict with the federal government’s purposes in enacting the Section 8 program. To sum, the bill appears well-insulated from charges of federal preemption.

Related Pending Legislation: SB 521 (Portantino) would provide a tax credit to landlords who rent property to Section 8 and VASH voucher holders. SB 521 is not mutually exclusive with the instant bill; in fact, the two bills would reinforce each other. SB 521 is scheduled to be heard in the Assembly Revenue and Taxation Committee on June 24, 2019.

SB 222 (Hill) would prohibit landlords from turning away prospective tenants based on their potential use of VASH vouchers as a source of income. The bill would also add military and veteran status to the protected classes under FEHA and other state anti-discrimination laws. The bill is identical to SB 1427 (Hill, 2018), which was vetoed last year by then-Governor Brown. SB 222 is scheduled to be heard by this Committee on July 2, 2019.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Housing Authorities (co-sponsor)

California Rural Legal Assistance Foundation (co-sponsor)

Housing California (co-Sponsor)

Los Angeles County Board of Supervisors (co-sponsor)

National Housing Law Project (co-sponsor)

Western Center on Law & Poverty, Inc. (co-sponsor)

AARP California

AIDS Legal Referral Panel

ACCE Action

ACLU California

AFSCME, AFL-CIO

Association of Regional Center Agencies

Aspiranet

California State Association of Counties

California Coalition for Youth

California Voices of Progress

California YIMBY

Central California Legal Services

City of San Jose

City of Santa Monica

City of Stockton

Community Clinic Association of Los Angeles County

Community Legal Services In East Palo Alto

County of Santa Clara

County Welfare Directors Association

Courage Campaign

Disability Rights California

East Bay Community Law Center

Eric Garcetti, Mayor of Los Angeles

Fair Housing Advocates of Northern California

Fair Housing Council of the San Fernando Valley

Family Violence Appellate Project

Family Violence Law Center

Friends Committee on Legislation of California

Greater Napa Valley Fair Housing Center

Hathaway-Sycamores Child and Family Services

Law Foundation of Silicon Valley

Leadership Council for Justice and Accountability

League of California Cities

League of Women Voters of California

Legal Aid Foundation of Los Angeles

Legal Aid of Marin

Los Angeles Homeless Services Authority

Mental Health Advocacy Services

National Association of Social Workers, California Chapter

Neighborhood Legal Services of Los Angeles County

NextGen California

Non-Profit Housing Association of Northern California

People Organized For Westside Renewal

PolicyLink

Poverty & Race Research Action Council

Power

Public Counsel

Public Interest Law Project

Public Law Center

Roseville Housing Authority

San Diego Housing Federation

Santa Monica Rent Control Board

State Council on Developmental Disabilities

Strategic Actions for a Just Economy

UDW/AFSCME Local 3930

Oppose Unless Amended

Affordable Housing Management Association-Pacific Southwest

Apartment Association of Orange County

Apartment Association, California Southern Cities

East Bay Rental Housing Association

Opposition

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Rental Housing Association

Southern California Rental Housing Association

Analysis Prepared by: Jith Meganathan / JUD. / (916) 319-2334

Date of Hearing: June 19, 2019

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

SBPCA Bill Id:SB 329

Author:(Mitchell) – As Amended Ver:May 17, 2019

SENATE VOTE: 24-11

SUBJECT: Discrimination: housing: source of income

SUMMARY: Prohibit landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher. Specifically, this bill:

1. Expands Federal Employment and Housing Act’s (FEHA) definition of “source of income” to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the U.S. Housing Act of 1937.
2. States that it is the intent of the Legislature to provide a participant in a housing voucher program an opportunity to receive a thorough and fair vetting when they seek housing.

EXISTING LAW:

1. States, as part of FEHA that it is against public policy to discriminate on the basis of source of income in housing accommodations.
2. Declares that the opportunity to seek, obtain, and hold housing without discrimination because of source of income is a civil right.
3. Makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the source of income of that person.
4. Specifies certain acts that constitute unlawful discrimination, including either of the following:
5. Using a financial or income standard in the rental of housing that fails to account for the aggregate income of persons residing together or proposing to reside together on the same basis as the aggregate income of married persons residing together or proposing to reside together; or
6. In instances where there is a government rent subsidy, using a financial or income standard in assessing eligibility for the rental of housing that is not based on the portion of the rent to be paid by the tenant.
7. Specifies that it shall not constitute discrimination based on source of income to make a written or oral inquiry concerning the level or source of income.
8. Provides that a person intends to unlawfully discriminate if one of the protected classes played a motivating factor in committing a discriminatory housing practice, as specified. A violation can be found when the act has the effect of unlawfully discriminating, regardless of the intent, as specified.
9. Defines “source of income” to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant.

FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS:

Background: California’s high housing costs dramatically worsen poverty.  Under the U.S. Census Bureau’s official poverty measure, 16 percent of Californians lived in poverty in 2013, but this measure does not take into account differences in living costs across the country or count non-cash benefits such as rent subsidies as income.  After adjusting for these factors, California’s poverty rate jumps to 23 percent, primarily due to high housing. California also has a large and growing population of people experiencing homelessness.

Housing Choice Vouchers: According to the Center for Budget Priorities, 300,000 Californians receive Housing Choice Vouchers, more commonly called “Section 8 vouchers.” The federal voucher program includes Section 8 vouchers which are broadly available to lower income individuals and families and VASH vouchers for lower income or homeless veterans. To qualify for a voucher, a tenant’s income cannot exceed 50% of the county average median income. A voucher holder is required to pay 30% of their income toward rent and the remaining percentage is subsidized by the Federal government. In addition, a voucher holder must find a landlord that will accept a voucher within 60 days of receiving the voucher or it expires.

Existing law prohibits landlords from discriminating against a tenant based on their source of income, however, it defines source of income as verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. Because rent payments for a poriton of a voucher holder’s rent are paid by the Federal Govnernment landlords can refuse to accept the voucher.

Requirements on landlords: Landlords are not required to reduce the rent if they accept a Section 8 voucher. A tenant pays their portion of the rent directly to the landlord and the remaining potion is paid by the local housing authority which awards and administers the vouchers on behalf of the federal government. The housing authority verifies a voucher applicant’s source of income and assets before they can be eligible to receive a voucher. To be eligible to accept a voucher, a landlord is required to attend class and have their property inspected for basic code violations.

Evidence that discrimination exists: This bill would prohibit landlords from discriminating against a tenant with a Section 8 voucher. There is both statistical and anecdotal evidence showing that landlords refuse to take housing vouchers. “Success rates” measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by HUD found that the national success rate was just 69 percent. It was even lower in high demand markets such as Los Angeles.

More recent studies have reached similar conclusions. A 2018 investigation commissioned by HUD and carried out by the Urban Institute found that, nationally, an average of one in 40 advertised rental housing units was potentially eligible for rental with a Section 8 voucher. In Los Angeles, the figure was closer to one in 50. When the investigators called the potentially available units and asked, “Do you accept housing vouchers?” 76 percent of Los Angeles landlords said no. Veterans have a harder time securing housing using a VASH voucher than families and individuals with Section 8 vouchers. The Los Angeles Housing Authority reports data showing, for instance, that VASH housing vouchers have the lowest success rate amongst housing vouchers the Authority issues. The success rate for general (non-veteran) Section 8 recipients is 60 percent. The success rate for the Authority’s other non-veteran housing vouchers is 67 percent. By comparison, the success rate for HUD-VASH vouchers is a mere 33 percent.

Several states across the country have already adopted laws to outlaw discrimination against tenants with housing vouchers. Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination. According to the author, both the City and County of Los Angeles are currently considering instituting such a ban as well.

Arguments in support: The sponsors of the bill, write to clarify several concerns that have been raised with the bill, “The bill does not require landlords to accept any tenant with housing assistance, does not prohibit landlords from screening for tenant suitability, and does nothing to prevent landlords from setting their rents at desired levels. It simply requires landlords to give families that receive housing assistance the same consideration as other families who wish to apply. There have also been claims this bill would increase the burden on local housing authorities. The bill, in fact, would not significantly alter the administration of the Section 8 Voucher program or other assistance programs; HUD authorizes Housing Authorities to use only a limited number of vouchers each year, and SB 329 would not increase the amount of assistance available or the burden on local housing authorities in the state. To the contrary, the bill ensures the efficient use of existing housing assistance by increasing the likelihood that families are able to find a landlord who will accept it, as opposed to returning their assistance for reprocessing because it has expired.”

Arguments in opposition: Opponents argue that SB 329 strips away property owner’s choice to contract or not contract with a property they own. They contend that the Section 8 approval process for landlords is complicated and can take up to 60 days, delaying their ability to collect rent. In addition, opponents contend landlords will face higher insurance rates if they accept Section 8 vouchers. Although insurance companies cannot deny coverage to a landlord that accepts a voucher, they can raise the rates.

Related legislation:

SB 222 (Hill) would underscore that housing discrimination on account of military or veteran status is unlawful in California by explicitly stating so within the Fair Employment and Housing Act (FEHA). In addition, by defining a Veterans Affairs Supportive Housing (VASH) voucher as a source of income for purposes of FEHA, this bill prohibits landlords from discriminating against a tenant on the basis that the tenant pays part or all of the rent using a VASH voucher. This bill is pending a hearing in the Assembly Judiciary Committee.

Double-referred: This bill was also referred to the Committee on Judiciary where it will be heard should it pass out of this committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Housing Authorities (Co-Sponsor)

California Rural Legal Assistance Foundation (Co-Sponsor)

Housing California (Co-Sponsor)

Los Angeles County Board of Supervisors (Co-Sponsor)

National Housing Law Project (Co-Sponsor)

Western Center on Law & Poverty, Inc. (Co-Sponsor)

AARP California

AIDS Legal Referral Panel

ACCE Action

ACLU California

AFSCME

Association of Regional Center Agencies

Aspiranet

California State Association of Counties

California Coalition for Youth

California Voices for Progress

California YIMBY

Central California Legal Services

City Of San Jose

City Of Stockton

Community Clinic Association of Los Angeles County

Community Legal Services In East Palo Alto

County of Santa Clara

Disability Rights California

East Bay Community Law Center

Eric Garcetti, Mayor of Los Angeles

Fair Housing Advocates of Northern California

Fair Housing Council of the San Fernando Valley

Family Violence Appellate Project

Family Violence Law Center

Greater Napa Valley Fair Housing Center

Law Foundation of Silicon Valley

Leadership Council for Justice and Accountability

League of California Cities

League of Women Voters of California

Legal Aid Foundation of Los Angeles

Legal Aid of Marin

Los Angeles Homeless Services Authority

Los Angeles Homeless Services Authority

Mental Health Advocacy Services

National Association of Social Workers, California Chapter

Neighborhood Legal Services of Los Angeles County

NextGen California

Non-Profit Housing Association of Northern California

People Organized For Westside Renewal

Poverty & Race Research Action Council

Power

Public Counsel

Public Interest Law Project

Public Law Center

San Diego Housing Federation

Santa Monica Rent Control Board

State Council on Developmental Disabilities

Strategic Actions for a Just Economy

UDW/AFSCME Local 3930

Opposition

Affordable Housing Management Association -Pacific Southwest

Apartment Association of Orange County

Apartment Association, California Southern Cities

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Rental Housing Association

East Bay Rental Housing Association

Southern California Rental Housing Association

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085

 THIRD READING  

Bill No: SB 329

Author: Mitchell (D), et al.

Amended: 5/17/19

Vote: 21

SENATE JUDICIARY COMMITTEE: 7-2, 4/30/19

AYES: Jackson, Allen, Caballero, Monning, Stern, Umberg, Wieckowski

NOES: Borgeas, Jones

SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/16/19

AYES: Portantino, Bradford, Hill, Wieckowski

NOES: Bates, Jones

SUBJECT: Discrimination: housing: source of income

SOURCE: California Rural Legal Assistance Foundation

Housing California

National Housing Law Project

Western Center on Law and Poverty

DIGEST:

This bill expands the definition of “source of income,” a category that California’s Fair Employment and Housing Act (FEHA) protects against discrimination. This bill prohibits landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher, to help them pay the rent.

ANALYSIS:

Existing law:

1. Makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the source of income of that person. (Gov. Code § 12955(a).)
2. Defines “source of income” to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. (Gov. Code § 12927, 12955(p).)

This bill:

1. Expands FEHA’s definition of “source of income” to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the U.S. Housing Act of 1937.
2. Declares that the Legislature’s intent in enacting this legislation is to provide housing voucher program participants an opportunity to receive a thorough and fair vetting when seeking housing.

Comments

1. About housing voucher programs. Roughly 300,000 low-income Californians rely on government subsidies in the form of housing vouchers to help pay their rent each month.^[1] There are a number of different types of housing voucher programs and they are generally designed to assist populations that are at high risk for homelessness or for whom homelessness would have especially devastating consequences.

By far the most common form of housing voucher is a Housing Choice Voucher (HCV), popularly known as “Section 8.” Section 8 is the federal government’s “major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.”^[2] Administered by the U.S. Department of Housing and Urban Development (HUD) in partnership with local public housing agencies, this program allows individuals and families to receive federal housing assistance in the form of a voucher that can be used to acquire housing on the private market.

In order to use a voucher under the program, a participant must find suitable housing with a landlord willing to accept Section 8 tenants, and the participant must find that housing before the voucher expires, which is usually 60 days from when it was issued. Once the participant moves into a unit, the voucher program’s housing subsidy is paid directly to the landlord through a local public housing agency, and the program participant pays the difference between the rent charged by the landlord and the amount subsidized by the housing agency.

Although Section 8 vouchers are the most common form of housing subsidy, there are other forms of housing assistance and this bill would cover them as well. For example, Veterans Assistance Supportive Housing (VASH) vouchers operate similarly to Section 8 vouchers, but they are available exclusively to homeless veterans and they come with supportive case management services. Housing Opportunities for People with AIDS (HOPWA) vouchers provide housing assistance and related supportive services for low-income persons living with HIV/AIDS and their families.

1. The role of vouchers in combatting homelessness. A 2015 HUD study concluded that, of several alternative methods for addressing family homelessness, housing vouchers are the most successful.^[3] (See the Senate Judiciary Committee Analysis of this bill for more details on the study’s conclusions.) These results are consistent with other research that has shown housing vouchers to be an effective way to address homelessness and its consequences.^[4]
2. Evidence that many landlords are refusing to accept housing vouchers. There is both statistical and anecdotal evidence showing that many landlords refuse to take housing vouchers. “Success rates” measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by HUD found that the national success rate was just 69 percent. It was even lower in high demand markets such as Los Angeles. ^[5] More recent studies have reached similar conclusions. (See the Senate Judiciary Committee Analysis of this bill for details.)
3. Likely effect of the bill on housing rates. Several states across the country have already adopted laws that do the same thing this bill would: outlaw discrimination against tenants with housing vouchers.^[6] Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination.

Studies conducted in a number of these jurisdictions have shown that prohibiting discrimination against housing voucher holders leads to higher rates of housing for them. (See the Senate Judiciary Committee Analysis of this bill for details on the results of these studies.)

1. Bill only prohibits discrimination; landlords retain other rights. While this bill prohibits landlords from discriminating against tenants on the basis of their participation in a housing voucher program, landlords would remain free to reject tenancy applications from program participants, provided they do so on otherwise lawful grounds that are not based on a participant’s receipt of a housing subsidy. Landlords would also remain free to charge rents as allowed under law, and would not be required to reduce rents even if chosen rent levels would make a unit too expensive for a voucher holder to afford. Further, landlords would continue to be able to use appropriate financial and income standards in making rental decisions, like verifying income levels or checking creditworthiness. However, landlords would no longer have the option to forgo participation in housing subsidy programs when presented with a prospective tenant who is qualified to rent from them in all other respects.
2. Landlord requirements associated with housing vouchers. From the landlord’s perspective, renting to a tenant who will pay part or all of the rent with a housing voucher is not as simple as just moving the person in and accepting rent payments. Before the federal government will subsidize rent payments to a landlord on behalf of a tenant, the landlord must comply with certain requirements. Those requirements may include: attending an informational session regarding the landlord’s rights and responsibilities as a participant in a housing voucher program; scheduling and passing a HUD Housing Quality Standards inspection to ensure the property meets minimum residential housing codes; and executing a lease that complies with the housing voucher program’s lease requirements.^[7]

Landlords who currently refuse to accept housing voucher holders as tenants avoid these requirements in the process. If this bill were enacted, landlords would sometimes be put in the position of having to go through these requirements.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

According to the Senate Appropriations Committee:

• Department of Fair Employment and Housing: The department estimates additional staffing costs of between $400,000 and $714,000 in FY 2020-21 and $384,823 to $686,000 annually thereafter to address a workload increase. (General Fund)
• County counsel: Potential minor increase in the time required to review and approve Restrictive Covenant Modification documents. These costs potentially are reimbursable by the state to the extent the Commission on State Mandates determines the revised definition of “source of income” expands upon a formerly-mandated higher level of service on county counsel to determine whether there exists an unlawfully restrictive covenant based on source of income, as redefined under the provisions of this bill. (Local funds, General Fund)
• Department of Housing and Community Development: The department reports no fiscal impact associated with SB 329.

SUPPORT: (Verified 5/17/19)

California Rural Legal Assistance Foundation (co-source)

Housing California (co-source)

National Housing Law Project (co-source)

Western Center on Law and Poverty (co-source)
American Civil Liberties Union of California

American Federation of State, County and Municipal Employees, AFL-CIO

Aspiranet

Bay Area Legal Aid

California Coalition for Youth

California Protective Parents Association

California State Association of Counties

California YIMBY

Central California Legal Services

City of Santa Monica

City of West Hollywood

Corporation for Supportive Housing

County of Santa Clara

Disability Rights California

Disability Rights Education & Defense Fund

Downtown Women’s Center, Los Angeles

Eric Garcetti, Mayor, City of Los Angeles

Fair Housing Council of the San Fernando Valley

Family Violence Appellate Project

Family Violence Law Center, Alameda County

Jewish Family Service of Los Angeles

Lassen Family Services

Law Foundation of Silicon Valley

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Legal Aid Foundation of Los Angeles

Los Angeles County Board of Supervisors

Los Angeles Homeless Services Authority

National Association of Social Workers – California Chapter

Public Interest Law Project

State Council on Developmental Disabilities

Strategic Actions for a Just Economy

Su Casa – Ending Domestic Violence, Long Beach

Tri-Valley Haven, Alameda County

United Domestic Workers of America – AFSCME Local 3930/AFL-CIO

Voices for Progress

2 individuals

OPPOSITION: (Verified 5/17/19)

Affordable Housing Management Association, Pacific Southwest

Apartment Association of Orange County

Apartment Association, Southern California Cities

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Rental Housing Association

East Bay Rental Housing Association

Southern California Rental Housing Association

5 individuals

ARGUMENTS IN SUPPORT: According to the author:

Voucher holders are a vulnerable population who are at a higher risk to become homeless due to their socioeconomic status. In order to address the homelessness issue, we need to support low-income populations so that they can find suitable housing.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

In further support of the bill, the Los Angeles Homeless Services Authority writes:

Rental subsidies are a key tool to combatting homelessness and providing stability to families that would otherwise be vulnerable to or at-risk of falling into homelessness. […] The effectiveness of these resources is strained by a competitive housing market. The utilization rate for new Section 8 vouchers in Los Angeles County has fallen to about 52%, meaning many households are unable to find landlords or units that are willing to accept this resource. […] Non-profit service providers report that landlords rejecting Rapid Re-Housing or other subsidies is a common problem curtailing the ability to effectively use these tools.

ARGUMENTS IN OPPOSITION: In opposition to the bill, a coalition of organizations representing businesses, landlords, realtors, and developers writes:

We agree that Section 8 vouchers play an important role in helping low-income Californians find housing, and many property owners participate in the program. However, because of the significant number of challenges associated with the program, a statewide mandate is not feasible for property owners or for housing authorities. […]

The Section 8 approval process is time consuming and difficult to understand, with little assistance available to owners through the housing authorities. It includes a very lengthy document preparation process that owners and tenants must complete. Many small rental property owners simply do not have the time or resources to maneuver the long and complicated process. […]

In further opposition to the bill, the California Association of Realtors writes:

Under SB 329 […], EVERY residential rental property owner will be effectively forced to enter into a contract with the local housing authority requiring they accept tenants who use Section 8 housing vouchers to pay a portion of their rent. […] Instead of fixing Section 8 by remedying this and other problems to attract more landlords to voluntarily participate in the program, SB 329 creates new mandates. […]

Prepared by: Timothy Griffiths / JUD. / (916) 651-4113

5/20/19 11:26:21

**** END ****

1. Rice, Dohler, and Mazzara, How Housing Vouchers Can Help Address California’s Rental Crisis (Feb. 12, 2016) The Center for Budget and Policy Priorities https://www.cbpp.org/research/housing/how-housing-vouchers-can-help-address-californias-rental-crisis (as of Mar. 10, 2019). ↑

2. See Housing Choice Vouchers Fact Sheet, U.S. Department of Housing and Urban Development https://www.hud.gov/topics/housing_choice_voucher_program_section_8 [as of Apr. 4, 2019].). ↑

3. Gubits et al, Family Options Study: Short-Term Impacts of Housing and Services Interventions for Homeless Families (July 2015) U.S. Department of Housing and Urban Development https://www.huduser.gov/portal/sites/default/files/pdf/FamilyOptionsStudy_final.pdf (as of Apr. 4, 2019) at p. xxx. ↑

4. Fischer, Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children (Oct. 7, 2015) Center on Budget and Policy Priorities https://www.cbpp.org/research/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term-gains (as of Apr. 4, 2019). ↑

5. Finkel and Buron, Study on Section 8 Voucher Success Rates (2001) U.S. Department of Housing and Urban Development https://www.huduser.gov/publications/pdf/sec8success.pdf (as of Apr. 4, 2019) at p. ii. ↑

6. Connecticut, District of Columbia, Maine, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, and Vermont. Texas law, by contrasts, preempts any local ordinance that would otherwise ban discrimination against voucher holders. See Source of Income Discrimination in Housing, Affordable Housing Online https://affordablehousingonline.com/source-of-income-antidiscrimination-laws (as of Apr. 27, 2019). ↑

7. See How Landlords can Help End Veteran Homelessness, U.S. Department of Veterans Affairs https://www.va.gov/homeless/docs/landlords_factsheet.pdf (as of Apr. 5, 2019). ↑

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 329 (Mitchell) - Discrimination: housing: source of income

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 16, 2019

Bill Summary:

SB 329 would prohibit housing discrimination under the California Fair Employment and Housing Act based on verifiable income paid directly to a housing owner or landlord on a tenant’s behalf, as specified.

Fiscal Impact:

• Department of Fair Employment and Housing: The department estimates additional staffing costs of between $400,000 and $714,000 in FY 2020-21 and $384,823 to $686,000 annually thereafter to address a workload increase. (General Fund)
• County counsel: Potential minor increase in the time required to review and approve Restrictive Covenant Modification documents. These costs potentially are reimbursable by the state to the extent the Commission on State Mandates determines the revised definition of “source of income” expands upon a formerly-mandated higher level of service on county counsel to determine whether there exists an unlawfully restrictive covenant based on source of income, as redefined under the provisions of this bill. (Local funds, General Fund)
• Department of Housing and Community Development: The department reports no fiscal impact associated with SB 329.

Committee Amendments:

Provide intent language of the Legislature’s intent in enacting this legislation to provide participants of a housing voucher program an opportunity to receive a thorough and fair vetting when seeking housing.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 329 (Mitchell) - Discrimination: housing: source of income

Bill Summary:

SB 329 would prohibit housing discrimination under the California Fair Employment and Housing Act (FEHA) based on verifiable income paid directly to a housing owner or landlord on a tenant’s behalf, as specified.

Fiscal Impact:

• Department of Fair Employment and Housing: The department estimates additional staffing costs of between $400,000 and $714,000 in FY 2020-21 and $384,823 to $686,000 annually thereafter to address a workload increase. (General Fund)
• County counsel: Potential minor increase in the time required to review and approve Restrictive Covenant Modification documents. These costs potentially are reimbursable by the state to the extent the Commission on State Mandates determines the revised definition of “source of income” expands upon a formerly-mandated higher level of service on county counsel to determine whether there exists an unlawfully restrictive covenant based on source of income, as redefined under the provisions of this bill. (Local funds, General Fund)
• Department of Housing and Community Development: The department reports no fiscal impact associated with SB 329.

Background:

The California Fair Employment and Housing Act prohibits employment and housing discrimination against any person on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information of that person. (Gov. Code, § 12920.) Under FEHA, the opportunities to seek, obtain, and hold employment and housing without facing discrimination is a civil right. (Gov. Code, § 12921.)

The act protects against housing discrimination on the basis of one’s “source of income,” which is defined as the “lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.” “[A] landlord is not considered a representative of a tenant” for purposes of this definition. (Gov. Code, §§ 12927, subd. (i), 12955, subd. (p).)

Federal housing assistance programs such as the Housing Choice Voucher (HCV) program, more commonly referred to as “Section 8 vouchers,” provide assistance in the form of vouchers that can be used to acquire housing on the private market to provide decent, safe, and sanitary housing to low-income families, the elderly, and the disabled. At the state level, public assistance programs such as the Housing Opportunity for People with AIDS (HOPWA) and HOME provide tenant-based rental assistance to eligible persons. Additionally, California has established the Housing Support Program (HSP) pursuant to SB 855 (Ch. 29, Stats. 2014) for eligible CalWORKs families.

Proposed Law:

This bill would expand the definition of “source of income” under FEHA to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the United States Housing Act of 1937, as specified. Consistently, it would strike language that states that a landlord is not considered a representative of a tenant for the purpose of this provision.

Related Legislation:

SB 1053 (Leno, 2016) was identical to this measure. SB 1053 was held on the Suspense File of this Committee.

Staff Comments:

According to analysis of impediments done by the state, over 2.5 million vouchers were provided to Californians by HCV program between 2007 and 2010, with the greater Los Angeles area receiving the biggest share at 47 percent (which was consistent with the area’s share of the state’s households (47%) and families (48%)), the Bay Area receiving roughly 18 percent, the Sacramento area receiving approximately 6 percent, and the Central Valley and the San Diego area both receiving about 10 percent each. Other highlights of the analysis were that, during this period, the majority of voucher recipients were families with one or more members with at least one disability (48%), most California voucher recipients during this period were in the race/ethnicity categories of “Non-Hispanic White” or “Black or African American,” and the majority of minority HCV recipients reside in areas where they are over-represented.

The Housing Choice Voucher program assists more than 250,000 families and one million individuals each year. The Department of Fair Employment and Housing predicts it would receive approximately 94 to 164 additional housing discrimination complaints annually associated with sources of income being public assistance that is paid directly to the landlord. Actual costs would depend on the actual increase in claims filed alleging discrimination based on this source of income and the resulting workload. Depending on how many claims DFEH would be required to investigate and enforce because of the expansion of FEHA protections resulting from SB 329, the department would need 4.0 to 7.0 positions to address the increased workload. These positions would be 2.0 Staff Services Analysts (SSA) and 2.0 Associate Governmental Program Analysts (AGPA) at the low end, with 1.0 additional SSA and 2.0 additional AGPAs at the high end.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: SB 329 (Author:Mitchell)

Version: February 15, 2019

Hearing Date: April 30, 2019

Fiscal: No

Urgency: No

Consultant: TSG

SUBJECT

Discrimination: housing: source of income

DIGEST

This bill expands the definition of “source of income,” a category that California’s Fair Employment and Housing Act (FEHA) protects against discrimination. If enacted, the bill would prohibit landlords from discriminating against tenants who rely upon housing assistance paid directly to landlords, such as a Section 8 voucher, to help them pay the rent.

EXECUTIVE SUMMARY

Many low-income Californians rely on government subsidies in the form of housing vouchers to help them pay their rent each month. These vouchers come in a variety of forms, the most common being Housing Choice Vouchers (HCV), better known by the federal law that governs them: “Section 8.” Another significant source of vouchers is the Veterans Assistance Supportive Housing (VASH) program for homeless veterans. FEHA makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of that person’s source of income. Under existing law, however, housing vouchers are not considered a source of income. As a result, landlords are free to refuse to rent to tenants whose rent will be partially or completely paid using a housing voucher and, in fact, many landlords do refuse to accept vouchers. This bill would expand the definition of “source of income” to include housing vouchers, thus prohibiting landlords from discriminating against housing voucher holders.

The bill is sponsored by California Rural Legal Assistance Foundation, Housing California, National Housing Law Project, and Western Center on Law and Poverty. Support is from housing advocates, homelessness prevention agencies, and veterans groups who view the bill as a critical tool for housing low-income people. Opposition is from landlords’ associations who assert that housing voucher programs are onerous for landlords and that participation in these programs should be voluntary.

PROPOSED CHANGES TO THE LAW

Existing federal law:

Authorizes housing assistance payments, as part of the U.S. Housing Act of 1937, “[f]or the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing.” (42 U.S.C. § 1437f(a).)

Existing state law:

1. States, as part of FEHA, that it is against public policy to discriminate on the basis of source of income in housing accommodations. (Gov. Code § 12920.)
2. Declares that the opportunity to seek, obtain, and hold housing without discrimination because of source of income is a civil right. (Gov. Code § 12921.)
3. Makes it unlawful for the owner of any housing accommodation to discriminate against or harass any person because of the source of income of that person. (Gov. Code § 12955(a).)
4. Specifies certain acts that constitute unlawful discrimination, including either of the following:
5. using a financial or income standard in the rental of housing that fails to account for the aggregate income of persons residing together or proposing to reside together on the same basis as the aggregate income of married persons residing together or proposing to reside together; or
6. in instances where there is a government rent subsidy, using a financial or income standard in assessing eligibility for the rental of housing that is not based on the portion of the rent to be paid by the tenant. (Gov. Code § 12955 (n), (o).)
7. Specifies that it shall not constitute discrimination based on source of income to make a written or oral inquiry concerning the level or source of income. (Gov. Code § 12955 (p).)
8. Provides that a person intends to unlawfully discriminate if one of the protected classes played a motivating factor in committing a discriminatory housing practice, as specified. A violation can be found when the act has the effect of unlawfully discriminating, regardless of the intent, as specified. (Gov. Code § 12955.8.)
9. Defines “source of income” to mean lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant, but specifies that a landlord is not considered a representative of a tenant. (Gov. Code § 12927, 12955 (p).)

This bill:

1. Expands FEHA’s definition of “source of income” to include lawful, verifiable income paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the U.S. Housing Act of 1937.

COMMENTS

1. Types of housing voucher programs

Roughly 300,000 low-income Californians rely on government subsidies in the form of housing vouchers to help pay their rent each month.^[1] There are a number of different types of housing voucher programs and they are generally designed to assist populations that are at high risk for homelessness or for whom homelessness would have especially devastating consequences.

By far the most common form of housing voucher is a Housing Choice Voucher (HCV), popularly known as “Section 8.” Section 8 is the federal government’s “major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.”^[2] Administered by the U.S. Department of Housing and Urban Development (HUD) in partnership with local public housing agencies, this program allows individuals and families to receive federal housing assistance in the form of a voucher that can be used to acquire housing on the private market.

In order to use a voucher under the program, a participant must find suitable housing with a landlord willing to accept Section 8 tenants, and the participant must find that housing before the voucher expires, which is usually 60 days from when it was issued. Once the participant moves into a unit, the voucher program’s housing subsidy is paid directly to the landlord through a local public housing agency, and the program participant pays the difference between the rent charged by the landlord and the amount subsidized by the housing agency. Eligibility requirements to participate in the program are generally set by local housing agencies, though certain federal requirements govern program eligibility as well. In general, a participant’s income may not exceed 50 percent of the median income for the county or metropolitan area in which the participant lives. The program requires participants to pay at least 30 percent of their monthly income toward rent and utilities, and although it does not limit the amount of rent a landlord may charge, it does limit how much participants can pay as a percentage of their monthly income in certain circumstances.

Although Section 8 vouchers are the most common form of housing subsidy, there are other forms of housing assistance and this bill would cover them as well. For example, Veterans Assistance Supportive Housing (VASH) vouchers operate similarly to Section 8 vouchers, but they are available exclusively to homeless veterans and they come with supportive case management services. Housing Opportunities for People with AIDS (HOPWA) vouchers provide housing assistance and related supportive services for low-income persons living with HIV/AIDS and their families.

2) The role of vouchers in combatting homelessness

A 2015 HUD study concluded that, of several alternative methods for addressing family homelessness, housing vouchers are the most successful.^[3] The study tracked families for 18 months after the respective housing interventions. According to a synopsis of the study:

Compared to families in homeless shelters that received no extra help under the study, families given vouchers were:

• 56 percent less likely to experience another episode of homelessness;
• 55 percent less likely to report incidents of domestic violence; and
• 42 percent less likely to have their children placed in foster care or temporarily housed with other family members.

Families with vouchers also had 16 percent fewer absences from school or child care for their children.

The other forms of assistance tested, community-based rapid re-housing and project-based transitional housing, had few significant effects on homelessness and only scattered effects on other outcomes.^[4]

These conclusions are consistent with other research that has shown housing vouchers to be an effective way to address homelessness and its consequences.^[5]

There are at least two problems with Section 8 as a tool for fighting homelessness, however. First, demand for housing assistance vouchers far exceeds the supply. The Section 8 waiting lists in many cities are notoriously long. In 2017, for example, Los Angeles’ Public Housing Authority estimated that it would take 11 years from the time an Angeleno signed up for Section 8 until the person actually received a voucher.^[6] Second, even once someone has a voucher in hand, finding housing remains difficult because many landlords will not accept tenants with vouchers.

3) Evidence that many landlords are refusing to accept housing vouchers

There is both statistical and anecdotal evidence showing that many landlords refuse to take housing vouchers. “Success rates” measure the frequency with which a voucher holder is able to find a place to live before the voucher expires. In 2001, a study commissioned by HUD found that the national success rate was just 69 percent. It was even lower in high demand markets such as Los Angeles. ^[7]

More recent studies have reached similar conclusions. A 2018 investigation commissioned by HUD and carried out by the Urban Institute found that, nationally, an average of one in 40 advertised rental housing units was potentially eligible for rental with a Section 8 voucher. In Los Angeles, the figure was closer to one in 50. When the investigators called the potentially available units and asked, “Do you accept housing vouchers?” 76 percent of Los Angeles landlords said no. Considering these and other barriers, the investigators concluded that:

searching for housing with vouchers is time consuming and frustrating. Voucher holders must navigate the rental market on their own, searching for units that meet the program rental cap. This search requires combing apartment listings and making multiple telephone calls to landlords to inquire about apartment availability. Many searches turn up short.^[8]

While it may be hard for Section 8 voucher holders to find a place that will accept them, some other types of housing voucher holders have it even worse. The Los Angeles Housing Authority reports data showing, for instance, that VASH housing vouchers have the lowest success rate amongst housing vouchers the Authority issues. The success rate for general (non-veteran) Section 8 recipients is 60 percent. The success rate for the Authority’s other non-veteran housing vouchers is 67 percent. By comparison, the success rate for HUD-VASH vouchers is a mere 33 percent.

A recent Los Angeles Times article documented the toll this can take on individuals. It chronicled the experience of one Angeleno who phoned over 70 landlords in a single day. Of those who responded, none would accept Section 8.^[9]

There are a number of possible explanations for landlords’ apparent reluctance to accept Section 8 voucher holders as tenants. In their comments about this bill, a number of opponents assert that the public housing authorities charged with operating the Section 8 program are overwhelmed and slow. As a result, the opponents contend, landlords often have to wait several weeks before they can move a Section 8 tenant in. In the meantime, the rental property sits empty, depriving the landlord of income.

The fair market rate that the Section 8 program sets may also be a factor. While landlords are free to set the price they will charge for their unit, the amount of the subsidy that they will receive from public housing authority depends on a formula intended to capture the fair market value of a similar size rental in the same general location. For landlords whose property is not as attractive, this formula results in a windfall, since they probably could not get the average market rate for that property in the absence of the subsidy. On the other hand, landlords whose property might fetch higher than the average market value have no incentive to participate in the Section 8 program. In this way, the current, voluntary nature of participation in the Section 8 program drives voucher holders into the less desirable rental units in any given geographic area.

Finally, racism plays a role. Section 8 voucher holders are predominantly people of color. Single, African-American, female heads-of-household constitute a significant fraction of them.^[10] Examining these demographics, some observers have pointed out that by refusing to rent to Section 8 voucher holders, landlords can legally engage in what is otherwise prohibited in housing: race discrimination.^[11]

4. Likely effect of the bill on housing rates

Several states across the country have already adopted laws that do the same thing this bill would: outlaw discrimination against tenants with housing vouchers.^[12] Within California, Berkeley, Corte Madera, East Palo Alto, Fairfax, Novato, San Anselmo, San Diego, San Rafael, Santa Monica, Woodland, and Marin County have all passed local ordinances prohibiting such discrimination. According to the author, both the City and County of Los Angeles are currently considering instituting such a ban as well.

Studies conducted in a number of these jurisdictions have shown that prohibiting discrimination against housing voucher holders leads to higher rates of housing for them. As summarized in the Urban Institute’s 2018 report to HUD:

The studies have mixed results, but they suggest antidiscrimination laws have modest effects on program outcomes. Looking at 50 metropolitan areas, Finkel and Buron (2001) found that voucher holders were more likely to successfully find housing in areas with protections (success rates of 76 percent compared with 69 percent in areas without protections). Freeman (2012) compared voucher utilization rates (a measure of the total number of vouchers available to a [Public Housing Agency] PHA that are in use) for adjacent jurisdictions with and without protections before and after antidiscrimination laws were passed or repealed. He found an increase in utilization rates after laws were passed (between 4 and 11 percentage points). Freeman and Li (2014) and Galvez (2011) found that voucher holders lived in slightly (1 percentage point) lower poverty neighborhoods in jurisdictions where source-of-income laws were in place, but did not find that such laws had a measurable effect on dispersing concentrations of voucher holders. Finally, Metzger (2014) found no statistically significant differences in the geographic distribution of voucher holders in metro areas with and without source-of-income protections in place.^[13]

The Urban Institute’s report reached an even more positive conclusion regarding the effect that laws prohibiting voucher-based discrimination have on housing success rates. Its data showed that landlords in jurisdictions without laws against voucher-based discrimination rejected Section 8 tenants 77 percent of the time, compared with just a 33 percent rejection rate in jurisdictions that do protect against voucher-based discrimination.^[14]

Considered as a whole, this research suggests that enactment of this bill would likely produce a moderate improvement in the rates at which voucher holders are able to obtain housing in California.

Given this evidence, it is perhaps not surprising that eliminating discrimination against housing voucher holders was the number one priority housing policy recommendation that emerged from the California Department of Social Services’ Lifting Children and Families Out of Poverty Task Force.^[15] This bill would fulfill that policy recommendation.

5. Bill only prohibits discrimination; landlords retain other rights

While this bill would prohibit landlords from discriminating against tenants on the basis of their participation in a housing voucher program, landlords would remain free to reject tenancy applications from program participants, provided they do so on otherwise lawful grounds that are not based on a participant’s receipt of a housing subsidy. Landlords would also remain free to charge rents as allowed under law, and would not be required to reduce rents even if chosen rent levels would make a unit too expensive for a voucher holder to afford. Further, landlords would continue to be able to use appropriate financial and income standards in making rental decisions, like verifying income levels or checking creditworthiness. However, landlords would no longer have the option to forgo participation in housing subsidy programs when presented with a prospective tenant who is qualified to rent from them in all other respects.

6. Landlord requirements associated with housing vouchers

From the landlord’s perspective, renting to a tenant who will pay part or all of the rent with a housing voucher is not as simple as just moving the person in and accepting rent payments. Before the federal government will subsidize rent payments to a landlord on behalf of a tenant, the landlord must comply with certain requirements. Those requirements may include:

• applying to the local public housing authority to be put on the list of approved properties;
• attending an informational session regarding the landlord’s rights and responsibilities as a participant in a housing voucher program;
• scheduling and passing a HUD Housing Quality Standards inspection to ensure the property meets minimum residential housing codes; and
• executing a lease that complies with the housing voucher program’s lease requirements.^[16]

Landlords who currently refuse to accept housing voucher holders as tenants avoid these requirements in the process. If this bill were enacted, landlords would sometimes be put in the position of having to go through these requirements. Presented with a prospective voucher-holding tenant who was qualified in all other respects, a landlord would not be able to refuse to rent to that tenant solely on the basis of the voucher. As a result, that landlord might have to comply with the housing voucher program requirements.

On the one hand, this represents some additional administrative burdens for a landlord and the possibility of lost rental income if the process delays a tenant’s move-in date. The opponents of the bill assert that:

[t]he Section 8 approval process for a rental property owner to participate is extremely time consuming and difficult to understand, with little assistance available to owners through the housing authorities. It includes a very lengthy document preparation process that owners and tenants must complete. Many small rental property owners simply do not have the resources to maneuver the long and complicated process.

On the other hand, several aspects of the process for a landlord simply hold them accountable for things they are already legally required to do. For example, to pass a HUD housing inspection on the first try, the U.S. Department of Veterans Affairs recommends that landlords ensure that their rental properties have: working smoke alarm(s); proper ventilation in bathrooms (window or fan); connected utilities; a functional stove and refrigerator; a window in every bedroom that can stay open without props; a working water heater discharge line and pop/relief valves; handrails for steps; and secure railings for porches and balconies. By the same token, landlords are encouraged to make sure their rental properties do not have: broken or missing locks; broken or missing windows; bugs or vermin; tripping hazards on the floor; exposed electrical wiring; and chipping or peeling paint inside or outside.^[17]

These are, of course, the sort of bare minimum conditions that a landlord must maintain under California’s warranty of habitability. (Civ. Code § 1941.1.) Outside of the subsidized housing voucher context, however, it is rare for any government entity to proactively inspect rental housing to ensure that it complies with these basic requirements. Thus, participating in subsidized housing programs does not impose any additional legal requirements about the conditions in which landlords must maintain the rental property, but it does subject them to greater accountability for doing so.

In addition to the annual inspection requirement, the required lease terms for Section 8 tenancies also differ from ordinary private market tenancies in at least two respects. Leases that do not involve a voucher can be for any length. The initial lease term for a Section 8 lease generally must be for one year, though local housing authorities have discretion to permit shorter initial lease terms. Similarly, in the absence of a local ordinance to the contrary, California landlords can terminate a standard month-to-month tenancy without cause on 30 days’ notice within the first year, and 60 days’ notice after that. In the case of Section 8 tenancies, by contrast, the landlord must give 90 days’ notice. (Civ. Code § 1954.535.)

At the same time, Section 8 provides some additional protections for landlords that a standard, private-market tenancy does not. First, because the government is paying the overwhelming majority of the rent bill, Section 8 landlords can usually rely more confidently on receiving that money each month. Second, Section 8 tenants have an especially strong motivation to stay current on their rent and avoid problems with their landlord. Getting evicted from Section 8 tenancy almost always means not only losing your home, but your housing voucher as well.

7. Court decisions regarding discrimination against Section 8 voucher holders

In their letter opposing this bill, a group of regional apartment associations states that “[n]umerous courts have refused to force property owners to involuntarily participate in the voluntary federal programs like the Section 8 program, recognizing that property owners have legitimate business reasons for refusing to participate in the program.” The group goes on to cite two federal circuit opinions and state court opinions from Maine and Minnesota in support of this proposition. (Salute v. Stratford Greens Garden Apartments (2d Cir. 1998) 136 F. 293; Knapp v. Eagle Property Management Corp. (7th Cir. 1995) 54 F. 3d 1272; Dussault v. RRE Coach Lantern Holdings, LLC (Me. 2014) 86 A.3d 52; Edwards v. Hopkins Plaza Ltd. Partnership (Minn. Ct. App. 2010) 783 N.W.2d 171.)

Case law from these jurisdictions is not binding in California. Nonetheless, these decisions might have some persuasive influence on California courts. Regardless, there is a substantial body of contrary case law, including cases out of Connecticut, the District of Columbia, New Jersey, Maryland, Massachusetts, and Texas, where laws banning discrimination against Section 8 voucher holders were either specifically upheld, or were enforced without even being contested. (Commission on Human Rights & Opportunities v. Sullivan Assocs. (1999) 250 Conn. 763); Bourbeau v. Jonathan Woodner Co. (D.D.C. 2008) 549 F.Supp 3d 78; Franklin Tower One v. N.M. (1999) 157 N.J. 602; Montgomery County v. Glenmont Hills Assocs. (2007) 402 Md. 250, cert. den. (2008) 553 U.S. 1102; Attorney General v. Brown (1987) 400 Mass. 826; Austin Apt. Ass’n v. City of Austin (W.D. Tex. 2015) 89 F.Supp. 3d 886.)

Finally, and most significantly, there are two California cases on point, both of which upheld local ordinances prohibiting discrimination against housing voucher holders. In one, a California Court of Appeal upheld San Francisco ordinance banning discrimination against Section 8 voucher holders in the face of a preemption challenge backed by the California Apartment Association. (City and County of San Francisco v. Post (2018) 22 Cal.App.5th 121.) In the other, a Los Angeles County Superior Court upheld Santa Monica’s prohibition on discrimination against housing voucher holders. (Apartment Association of Greater Los Angeles, et al v. City of Santa Monica (Super. Ct., L.A. County, 2017, No. SC124308).)

In summary, while there is some conflict among the decision, the majority of courts – including the California courts that have ruled on the matter – have thus far found that state and local governments can prohibit discrimination against housing voucher holders, as this bill would do. The regional apartment association’s letter is nonetheless indicative that, if enacted, this bill is likely to face challenge in court.

8. Arguments in support of the bill

According to the author:

It is widely understood that the zip codes in which people live and grow up are a huge determinant of life expectancy as well as health and educational outcomes. In addition, the impacts of housing insecurity and, conversely, a stable and affordable home on a family’s ability to exit poverty and achieve success with respect to a range of outcomes are well documented. This bill aims to give households receiving housing assistance, such as Section 8 vouchers and local subsidies, an increased ability to successfully acquire suitable housing on the private market and access areas that can provide them and their children better educational opportunities and a healthier environment. Research shows that when assisted households can access low-poverty, high-opportunity neighborhoods utilizing their housing assistance, they are better able to afford basic necessities and are more likely to make expenditures improving family health - in turn, allowing their children to focus on education and development. […]

Voucher holders are a vulnerable population who are at a higher risk to become homeless due to their socioeconomic status. In order to address the homelessness issue, we need to support low-income populations so that they can find suitable housing.

Under this proposal, landlords would still be able to screen tenants for suitability, and would not lose the power to set the rents for their units; they simply would not be allowed to refuse a tenant solely on the basis that the tenant intends to use housing assistance to help pay their rent. Local jurisdictions are increasingly turning to housing vouchers and other subsidies as a part of the solution to homelessness. For these strategies to be successful, it is critical to create access to suitable housing for some of our most vulnerable populations.

In support, California YIMBY writes:

According to the most recent HUD estimates, housing choice voucher holders nationwide were successful in finding housing only 69 percent of the time, with that number falling to 61 percent in tighter housing markets, such as California’s, revealing possible discrimination against voucher holding tenants. This discrimination has a disparate racial impact, and some evidence suggests that discrimination against housing choice voucher holders is intentionally a proxy for discrimination on race, which is illegal.

SB 329 would make it unlawful for a landlord to refuse tenancy to someone on the basis that they hold a housing choice voucher. This method is proven to increase the rate at which voucher holders can find housing […].

In further support of the bill, the Los Angeles Homeless Services Authority writes:

Rental subsidies are a key tool to combatting homelessness and providing stability to families that would otherwise be vulnerable to or at-risk of falling into homelessness. […] The effectiveness of these resources is strained by a competitive housing market. The utilization rate for new Section 8 vouchers in Los Angeles County has fallen to about 52%, meaning many households are unable to find landlords or units that are willing to accept this resource. […] Non-profit service providers report that landlords rejecting Rapid Re-Housing or other subsidies is a common problem curtailing the ability to effectively use these tools.

In further support of the bill, Disability Rights California writes:

Even with assistance, many individuals and families are unable to even apply for housing due to blanket policies of landlords who refuse to accept housing assistance payments. Persons with disabilities often receive benefits and public assistance that is frequently refused.

In further support of the bill, Aspiranet writes:

Nonminor dependents and former foster youth often struggle to find housing, and the current housing market does not make it easy. This bill will be helpful for many current and former foster youth whose source of income may include vouchers or Supervised Independent Living Placement payments.

9. Arguments in opposition to the bill

In opposition to the bill, a coalition of organizations representing businesses, landlords, realtors, and developers writes:

We agree that Section 8 vouchers play an important role in helping low-income Californians find housing, and many property owners participate in the program. However, because of the significant number of challenges associated with the program, a statewide mandate is not feasible for property owners or for housing authorities. […]

The Section 8 approval process is time consuming and difficult to understand, with little assistance available to owners through the housing authorities. It includes a very lengthy document preparation process that owners and tenants must complete. Many small rental property owners simply do not have the time or resources to maneuver the long and complicated process. […]

Housing authorities must conduct a 3-step process before a tenant is able to move in. This process takes at minimum two-weeks, but commonly takes well over a month. During this time, units sit empty, and owners lose rent revenue that they need to pay building expenses. […]

In addition to absorbing a loss of rent, property owners will […] continue to face higher costs of insurance if they accept Section 8 recipients.

In further opposition to the bill, the California Association of Realtors writes:

Under SB 329 […], EVERY residential rental property owner will be effectively forced to enter into a contract with the local housing authority requiring they accept tenants who use Section 8 housing vouchers to pay a portion of their rent. […] Instead of fixing Section 8 by remedying this and other problems to attract more landlords to voluntarily participate in the program, SB 329 creates new mandates. […]

Section 8 requires property owners to abide by federal regulations that differ from state and local laws. Many property owners, particularly small landlords with only one rental unit, struggle with these complex rules and regulations, which compromise their ability to provide quality housing at reasonable rents.

SUPPORT

California Rural Legal Assistance Foundation (sponsor)

Housing California (sponsor)

National Housing Law Project (sponsor)

Western Center on Law and Poverty (sponsor)
American Civil Liberties Union of California

American Federation of State, County and Municipal Employees, AFL-CIO

Aspiranet

Bay Area Legal Aid

California Coalition for Youth

California Protective Parents Association

California State Association of Counties

California YIMBY

Central California Legal Services

Corporation for Supportive Housing

Disability Rights California

Disability Rights Education & Defense Fund

Downtown Women’s Center, Los Angeles

Fair Housing Council of the San Fernando Valley

Family Violence Appellate Project

Family Violence Law Center, Alameda County

Eric Garcetti, Mayor, City of Los Angeles

Jewish Family Service of Los Angeles

Lassen Family Services

Law Foundation of Silicon Valley

Leadership Counsel for Justice & Accountability

League of Women Voters of California

Legal Aid Foundation of Los Angeles

Los Angeles Homeless Services Authority

Los Angeles County Board of Supervisors

National Association of Social Workers – California Chapter

Public Interest Law Project

County of Santa Clara

City of Santa Monica

State Council on Developmental Disabilities

Strategic Actions for a Just Economy

Su Casa – Ending Domestic Violence, Long Beach

Tri-Valley Haven, Alameda County

United Domestic Workers of America – AFSCME Local 3930/AFL-CIO

Voices for Progress

City of West Hollywood

2 individuals

OPPOSITION

Affordable Housing Management Association, Pacific Southwest

Apartment Association, Southern California Cities

Apartment Association of Orange County

California Apartment Association

California Association of Realtors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Rental Housing Association

East Bay Rental Housing Association

Southern California Rental Housing Association

5 individuals

RELATED LEGISLATION

Pending Legislation: SB 222 (Hill, 2019) proposes to define a VASH voucher as a “source of income” for purposes of FEHA, thereby prohibiting landlords from refusing to rent to a prospective tenant on the basis that the applicant proposes to pay part or all of the rent using a VASH voucher. SB 222 is currently pending consideration before the Senate Appropriations Committee.

Prior Legislation:

SB 1427 (Hill, 2018) would have defined a Veterans Affairs Supportive Housing (VASH) voucher as a “source of income” for purposes of FEHA, thereby prohibiting landlords from refusing to rent to a prospective tenant on the basis that the applicant proposes to pay part or all of the rent using a VASH voucher. In his message vetoing SB 1427, then Governor Brown wrote: “This bill goes too far. Specifically, it forces landlords and property owners to take part in what has always been a voluntary federal program with numerous requirements… I don’t believe a mandate to comply with all these requirements is warranted.”

AB 2219 (Ting, Ch. 233, Stats. 2018) required residential landlords to accept rent payments from third parties, provided that the third party acknowledges that the payment does not confirm nor create a tenancy. AB 2219 included a provision explicitly clarifying that the bill did not require landlords to accept subsidized housing voucher holders.

SB 1053 (Leno, 2016) was nearly identical to this bill. SB 1053 died in the Senate Appropriations Committee.

AB 447 (Maienschein, Ch. 432, Stats. 2015) prohibited real property insurers from, among other things, failing or refusing to accept an application, issue, or cancel a policy based on the level or source of income of individuals residing or intending to reside on the real property, or based on the receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, by an individual or group of individuals residing or intending to reside upon the property, as specified. This bill also prohibited real property insurers from requiring this information on an application for insurance, as specified.

SB 1252 (Corbett, Ch. 524, Stats. 2010) made technical revisions to several provisions of FEHA, including consistently listing “source of income” as a characteristic that is protected from housing discrimination in various sections of the act.

SB 1145 (Burton, Ch. 568, Stats. 2004), among other things, removed the sunset date and thereby extended indefinitely a provision adopted in SB 1098 (Burton, Ch. 590, Stats. 1999), which prohibited discrimination under FEHA on the basis of a person’s source of income, as specified.

SB 1098 (Burton, Ch. 590, Stats. 1999) prohibited, until January 1, 2005, discrimination under FEHA on the basis of a person’s source of income, the failure to account for the aggregate income of co-residents, or the failure to exclude a government rent subsidy from that portion of the rent to be paid by the tenant in assessing the tenant’s eligibility for rental housing.

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1. Rice, Dohler, and Mazzara, How Housing Vouchers Can Help Address California’s Rental Crisis (Feb. 12, 2016) The Center for Budget and Policy Priorities https://www.cbpp.org/research/housing/how-housing-vouchers-can-help-address-californias-rental-crisis (as of Mar. 10, 2019). ↑

2. See Housing Choice Vouchers Fact Sheet, U.S. Department of Housing and Urban Development https://www.hud.gov/topics/housing_choice_voucher_program_section_8 [as of Apr. 4, 2019].). ↑

3. Gubits et al, Family Options Study: Short-Term Impacts of Housing and Services Interventions for Homeless Families (July 2015) U.S. Department of Housing and Urban Development https://www.huduser.gov/portal/sites/default/files/pdf/FamilyOptionsStudy_final.pdf (as of Apr. 4, 2019) at p. xxx. ↑

4. Rice, Major Study: Housing Vouchers Most Effective Tool to End Family Homelessness (July 14, 2015) Center on Budget and Policy Priorities https://www.cbpp.org/blog/major-study-housing-vouchers-most-effective-tool-to-end-family-homelessness (as of Apr. 4, 2019). ↑

5. Fischer, Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children (Oct. 7, 2015) Center on Budget and Policy Priorities https://www.cbpp.org/research/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term-gains (as of Apr. 4, 2019). ↑

6. Wick, The Waiting List For Section 8 Vouchers In L.A. Is 11 Years Long (Apr. 4, 2017) LAist https://laist.com/2017/04/04/section_8_waiting_list.php (as of Apr. 4, 2019). ↑

7. Finkel and Buron, Study on Section 8 Voucher Success Rates (2001) U.S. Department of Housing and Urban Development https://www.huduser.gov/publications/pdf/sec8success.pdf (as of Apr. 4, 2019) at p. ii. ↑

8. Cunningham et al, A Pilot Study of Landlord Acceptance of Housing Choice Vouchers (Aug. 2018) U.S. Department of Housing and Urban Development Office of Policy Development and Research https://www.huduser.gov/portal/sites/default/files/pdf/ExecSumm-Landlord-Acceptance-of-Housing-Choice-Vouchers.pdf (as of Apr. 5, 2019) at p. 3. ↑

9. Khouri, Housing Vouchers Can Save People from Homelessness. But Landlords May Not Accept Them (Mar. 29, 2019) Los Angeles Times https://www.latimes.com/business/la-fi-section-8-landlords-20190329-story.html (as of Apr. 4 2019). ↑

10. See National Low-Income Housing Coalition, Who Lives in Federally Assisted Housing (Vol. 2, Issue 2, Nov. 2012) Housing Spotlight https://nlihc.org/sites/default/files/HousingSpotlight2-2.pdf (as of Apr. 4, 2019). ↑

11. See, e.g., Badger, A Pervasive Form of Housing Discrimination That’s Still Legal (Aug. 3, 2017) Washington Post https://www.washingtonpost.com/news/wonk/wp/2016/08/03/a-pervasive-form-of-housing-discrimination-thats-still-legal/?utm_term=.4018040c3de0 (as of Apr. 4, 2019). ↑

12. Connecticut, District of Columbia, Maine, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, and Vermont. Texas law, by contrasts, preempts any local ordinance that would otherwise ban discrimination against voucher holders. See Source of Income Discrimination in Housing, Affordable Housing Online https://affordablehousingonline.com/source-of-income-antidiscrimination-laws (as of Apr. 27, 2019). ↑

13. Cunningham et al, A Pilot Study of Landlord Acceptance of Housing Choice Vouchers (Aug. 2018) U.S. Department of Housing and Urban Development Office of Policy Development and Research https://www.huduser.gov/portal/sites/default/files/pdf/ExecSumm-Landlord-Acceptance-of-Housing-Choice-Vouchers.pdf (as of Apr. 5, 2019) at p. 12. ↑

14. Bell, Sard, and Koepnick, Prohibiting Discrimination Against Renters Using Housing Vouchers Improves Results (Dec. 2018) Center on Budget and Policy Priorities https://www.cbpp.org/research/housing/prohibiting-discrimination-against-renters-using-housing-vouchers-improves-results (as of Apr. 5, 2019). Calculations based on Urban Institute data. ↑

15. Lifting Children and Families Out of Poverty Taskforce Report, November, 2018. Available at https://www.cdss.ca.gov/Portals/9/CalWORKs/AB1520%20-%20Final%20Report.pdf?ver=2018-11-19-145600-677 (as of Apr. 4, 2019) at p. 38. ↑

16. See How Landlords can Help End Veteran Homelessness, U.S. Department of Veterans Affairs https://www.va.gov/homeless/docs/landlords_factsheet.pdf (as of Apr. 5, 2019). ↑

17. How Landlords can Help End Veteran Homelessness, supra U.S. Department of Veterans Affairs. ↑