On June 20, 2017, the Council of the City of Rochester passed Ordinance No. 2017-163, amending Chapter 63 of the Municipal Code with regard to housing discrimination on the basis of source of income. Rochester area real estate professionals have long had the obligation to act in accordance with the City equal opportunity ordinance, which protects certain protected classes from housing discrimination. The new ordinance adds source of income to age, race, creed, color, national origin, gender, gender identity or expression, sexual orientation, disability, and marital status as a protected class. The amended ordinance was adopted and went into effect on June 21, 2017. Similar legislation has already been passed and implemented in both Buffalo and Syracuse.
While the amended ordinance pertains to anyone dealing in the sale, rental, or leasing of housing—and their agents—this article will focus specifically on the consequences to landlords and their agents.
As of June 21, a landlord in Rochester must consider as income any payments received from “a lawful occupation or employment, as well as other payments including, but not limited to, pensions, annuities, public assistance, supplemental security income, social security disability insurance, unemployment benefits, Housing Choice Vouchers (formerly known as Section 8), other housing voucher or subsidy programs, and any other governmental or charitable subsidy.” (Municipal Code § 63-2).
The amended ordinance makes it unlawful for a landlord, or their agent, to refuse to show, sell, transfer, or lease to anyone on the basis of their source of income. Furthermore, a landlord cannot exclude, deny, restrict, segregate, or otherwise limit or differentiate persons based on their source of income.
Landlords must take care to ensure that no statements in their written materials either directly or indirectly discriminate on the basis of source of income. Written materials include, but are not limited to, advertising, publications, application forms, and lease materials. For example, an advertisement that either explicitly forbids or dissuades applicants with Housing Choice Vouchers from applying for housing would violate this ordinance.
The new ordinance contains exceptions from liability for inquires, required disclosures, and required verifications of a prospective tenant’s source of income “that is necessitated by a Federal, State, or local law that is generally applicable, applicable to the housing at issue, or applicable to the financing or subsidies necessary to a person’s purchase or leasing of such housing.” (Municipal Code § 63-5(D)(1)).
Importantly, the amended ordinance does not preclude a landlord from refusing to rent or lease housing to a prospective tenant due to insufficient income. There is not a prescribed test for calculating insufficient income, however whatever test a landlord chooses to apply must be applied equally to all prospective tenants. Furthermore, a landlord may refuse to rent or lease housing to a prospective tenant that has failed to timely pay rent during part or all of the preceding 18 months. Neither of these refusals to rent are considered discriminatory as long as the selection criteria are applied equally to all prospective tenants, regardless of their source of income.
There are steps that landlords can take to protect themselves from inadvertent source of income discrimination. First, a landlord should apply all income requirements for tenants and prospective tenants equally. For example, a prospective tenant with Housing Choice Vouchers cannot be required to provide proof of greater income than is required of an applicant whose income is derived solely from wages. Second, the landlord should notify all applicants of legal sources of income and inform them that all enumerated sources are considered as income. This could be accomplished in a variety of ways, such as updating the language of the lease agreement to reflect changes in the ordinance. Third, the landlord may offer applicants a full opportunity to provide verification of income and ensure that required verification is not unreasonably burdensome. Verification of income may be considered to be unreasonably burdensome if the required verification for applicants using public assistance is more difficult than the verification of income required from wage earners. Fourth, a landlord should ensure that ancillary factors do not favor or disfavor applicants based on their source of income. An example of this may be setting a security deposit at a level that precludes certain applicants based solely on their source of income. It is also beneficial to review lease materials to ensure that nothing either deliberately or inadvertently has the effect of discriminating based on source of income. The preceding steps are illustrative and not meant to be an exhaustive list of all precautionary measures.
One notable topic that every landlord should be aware of is that they must consider future sources of income that are contingent on the applicant obtaining a lease. Examples of such income could include public assistance, supplemental security income, Housing Choice Vouchers, or other voucher or subsidy programs. To avoid liability for discrimination, a landlord could provide each applicant a written list of all sources of income that will be counted towards their overall income—including any future subsidies that may be contingent on the applicant obtaining a lease. Additionally, the list should describe what, if any, additional verification may be required for conditional future subsidies—taking care to ensure that such requirements are not unreasonably burdensome.
The new amendment does not prevent a landlord from requiring that all prospective tenants pass the same credit, reference, or income sufficiency requirements that are required of all tenants. As long as such checks are nondiscriminatory and equally applied to all applicants, such tests are not in contravention of this ordinance.
This amendment to Chapter 63 of the Municipal Code certainly represents a significant change for landlords. However, awareness of the changes and proper precautions, as discussed above, can help a landlord decrease their exposure to potential source of income discrimination suits—which can result in injunctive relief, compensatory and punitive damages, and the imposition of fines and penalties. Landlords can still require that prospective tenants meet certain criteria, as long as that criteria are applied equally to all applicants irrespective of their source of income.
If you have any questions or are interested in learning more about the new ordinance, you’re welcome to attend the Boylan Code Real Estate Roundtable Friday, August 4, 2017 at 8:30am. The roundtable will be at Boylan Code’s office in the Culver Road Armory. Please email email@example.com if you’d like to attend.
Austin P. Judkins is a summer clerk at Boylan Code LLP and a student at Syracuse University College of Law.
Jaime Michelle Cain is a Partner in Boylan Code’s Commercial Lending & Real Estate Group. She concentrates her practice on fair housing consultation and leasing.
To read the published article in the Daily Record, click here.