How To Avoid A Fair Housing Claim Over Source Of Income Discrimination

How To Avoid A Fair Housing Claim Over Source Of Income Discrimination

Potential source of income discrimination as more and more cities and states pass these types of fair housing laws is the topic this week of the Grace Hill training tip.

By Ellen Clark

 Many states and cities, including Seattle and the State of Washington, have laws against source of income discrimination meaning a property owner cannot choose to reject an applicant based on where his income comes from as long as it is a lawful source.

Source-of-income discrimination has been documented by researchers, and advocates say it creates barriers for people struggling to find housing.

In Baltimore, the City Council has passed legislation that would make it illegal for property managers to discriminate against prospective residents because of how they would pay their rent. The law bans discrimination on the basis of a tenant’s source of income, so long as the income is lawful. Under the law, landlords will be unable to turn away voucher holders simply for paying their rent with a voucher rather than with earned income, a rule that is already on the books in dozens of cities and several states.

This type of discrimination is known as “source of income” discrimination, and though not prohibited under federal fair housing law, it is prohibited by some state, city, and county laws. According to reports at least 12 states and numerous cities have similar legislation in place so it pays to check your local city and state laws on this issue. The states of Washington, Oregon, Utah and Colorado all have these types of laws see the list here of states and cities with these types of laws.

Source of income discrimination is often directed at people whose lawful livelihoods come from sources other than a paycheck.

Examples of lawful sources of income include:

Source of income discrimination may not be prohibited under federal fair housing law, however, it is prohibited by some state, city, and county laws.

  • Housing Choice Vouchers (Section 8)
  • Supplemental Security Income (SSI)
  • Social Security
  • Veterans benefits
  • Alimony or child support payments
  • Temporary Assistance for Needy Families (TANF)

What types of actions may be considered source of income discrimination?

Here are some examples:

  • Advertising that a person “must have a job” to rent an apartment.
  • Requiring documentation, such as pay stubs, that are typically only available to people who are working.
  • Advertisements that express limitations as to the source of income of potential residents, such as, “No Section 8” or “We do not take public assistance”
  • Refusing to rent to a person who is receiving public benefits.
  • Setting income requirements artificially high in order to exclude applicants who receive public benefits.
  • Requiring co-signers or a larger security deposit because of an applicant’s source of income.

How to avoid a fair housing claim over source of income discrimination

If discrimination based on the source of income is prohibited in your state or locality, one of the most important things you can do to make sure you do not end up on the wrong side of a fair housing claim is to keep all employees well informed.

  • Staff members should refresh their fair housing knowledge at least annually and be aware that discrimination based on “source of income” is illegal.

All staff members who come into contact with residents and prospective residents must be trained in fair housing laws.

  • All staff members should refresh their fair housing knowledge at least annually and should be very clear that discrimination based on the source of income is illegal.
  • Don’t forget about vendors and contractors! Anyone who could possibly interact with your residents should be informed of your company’s fair housing policy and asked to abide by fair housing laws.

It is important to remember that many states, cities, and municipalities have expanded fair housing protection to include additional protected classes. In addition to the source of income, these may include characteristics such as ancestry, marital status, age, military status, and student status.

Even if your area does not include some or all of these additional protections, all people should be treated fairly and equally – as a housing provider, that’s your responsibility!

Read Ellen’s full blog post here.


Washington lawmakers OK bill to ban housing bias based on tenant’s source of income

Fair Housing: Source of Income Discrimination

List of states and cities with source of income laws

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About the author:

Ellen Clark is the Director of Assessment at Grace Hill.  Her work has spanned the entire learner lifecycle, from elementary school through professional education. She spent over 10 years working with K12 Inc.’s network of online charter schools – measuring learning, developing learning improvement plans using evidence-based strategies, and conducting learning studies. Later, at Kaplan Inc., she worked in the vocational education and job training divisions, improving online, blended and face-to-face training programs, and working directly with business leadership and trainers to improve learner outcomes and job performance. Ellen lives and works in Maryland, where she was born and raised.

About Grace Hill

For nearly two decades, Grace Hill has been developing best-in-class online training courseware and administration solely for the Property Management Industry, designed to help people, teams and companies improve performance and reduce risk. Contact Grace Hill at 866.472.2344 to hear more.