Protecting Access to Affordable Housing in Texas

by Rob Van Someren Greve

Section 8 Housing Choice Vouchers allow beneficiaries to rent a property of their choice from private owners by having federal funds cover most of their rent. They provide access to affordable housing to over two million very low-income households in the United States.[1] Given the steady decline of other federal affordable housing programs, the Voucher program is of vital importance to the goal of “aiding low-income families in obtaining a decent place to live.”[2] For the program to be successful, private landlords must be willing to rent their properties to beneficiaries. Unfortunately, many landlords—especially those whose properties are not located in neighborhoods with high concentrations of poor households—refuse to participate in the program.[3] To combat this unwillingness and help ensure that Voucher recipients are able to find a “decent place to live,” numerous jurisdictions across the country have passed laws that prohibit landlords from discriminating against tenants on the basis of their source of income.[4]

Unsurprisingly, landlords who had been unwilling to rent to Voucher holders prior to the adoption of laws prohibiting source-of-income discrimination have generally not simply acquiesced after these laws were passed. Landlords in various jurisdictions have challenged these laws in court, arguing as follows: while participation in the Housing Choice Voucher program is voluntary, prohibiting source-of-income discrimination de facto forces them to participate; therefore, such laws are in conflict with, and thus preempted by, the federal statute.[5] Courts have, for the most part, not been particularly receptive to this line of argument.[6] Again unsurprisingly, landlords seeking to preserve the ability to reject otherwise eligible tenants seeking to pay with vouchers have focused their efforts elsewhere.

When the city of Austin, Texas, attempted to protect access to affordable housing in the city by adopting an ordinance prohibiting source-of-income discrimination in 2014, local landlords not only brought suit, but also turned to the state legislature in an attempt to get the law blocked.[7] The Texas legislature in turn adopted Tex. Local Gov’t Code Ann. § 250.007 in 2015, [8] which explicitly prevents municipalities and counties in the state from adopting ordinances prohibiting discrimination against Voucher recipients. Echoing opponents of the 1964 Civil Rights Act, one supporter of the state bill argued that anti-discrimination ordinances such as the one passed in Austin “trample the liberties of the business community.”[9]

The passage of the state statute does not necessarily mean the end for attempts to protect Voucher holders against discrimination, however. A Dallas-based non-profit, The Inclusive Communities Project, recently filed a complaint challenging the statute for violation of the Equal Protection Clause and the Fair Housing Act.[10] Inclusive Communities’ complaint is based on the failure of the city of Dallas to enact an anti-discrimination ordinance similar to Austin’s. While Dallas, after pressure from the Department of Housing and Urban Development, considered enacting such a measure, it ultimately did not do so because of the barrier thrown up by the state statute.[11] Inclusive Communities argues, first, that it is public knowledge that Section 8 Voucher holders in the Dallas area are predominantly African American, and that the African American communities in the area are concentrated in certain low-income neighborhoods “marked by conditions of slum and blight.”[12] Second, by preventing Dallas and other local governments in Texas from enacting an ordinance prohibiting source-of-income discrimination, the state legislature singled out African Americans for adverse treatment.[13] The ordinance would have combated not just the concentration of Voucher holders in high-poverty neighborhoods, but also the racial segregation that goes hand in hand with that concentration. This is because the units that would become available to Section 8 Voucher holders if source-of-income discrimination against them were prohibited are located in predominantly White neighborhoods.[14] Inclusive Communities’ argument in the complaint is not merely that the statute barring local governments from enacting anti-discrimination ordinances has a disparate impact on communities of color, a claim that can be sufficient to prove a violation of the Fair Housing Act.[15] They also argue that the legislature intentionally imposed an unequal burden on African Americans, a claim that is necessary to prove an Equal Protection violation under Washington v. Davis.[16]

Whether this challenge will be successful remains to be seen. Given that the argument relies heavily on both the demographical composition of Dallas as well as the history of the state statute’s enactment, a victory in this case may not easily translate to a successful strategy in other municipalities. Nonetheless, it is a case that may be of great importance. Iowa and Indiana are currently considering adopting a bill similar to the Texas statute challenged by Inclusive Communities.[17] Furthermore, the American Legislative Exchange Council (ALEC), a conservative organization that drafts model legislation serving corporate interests,[18] has been engaged in a broader effort to push state preemption laws prohibiting local governments from passing ordinances that provide protections to low-income constituents.[19] Finally, although Inclusive Communities’ argument relies squarely on facts specific to the Dallas area, the concentration of Voucher holders in general (and of African American Voucher holders in particular) in high-poverty neighborhoods is not unique to the Dallas area.[20] In light of this, the fate of Inclusive Communities’ challenge to the Texas’s statute may well play a significant role in shaping the future of access to affordable housing across America.

[1] Ctr. on Budget & Policy Priorities, Fact Sheet: Federal Rental Assistance http://www.cbpp.org/sites/default/files/atoms/files/4-13-11hous-US.pdf (last visited Mar. 11, 2017).

[2] 42 U.S.C. § 1437f(a) (2012). On the decline of other federal housing programs, in particular public housing, see, e.g., Dena Levitz, The Future of America’s Public Housing Stock: Demolition by Neglect, CityLab (May 14, 2014), http://www.citylab.com/housing/2014/05/future-americas-public-housing-stock-demolition-neglect/9090.

[3] Alana Semuels, How Housing Policy Is Failing America’s Poor, Atlantic (June 24, 2015), https://www.theatlantic.com/business/archive/2015/06/section-8-is-failing/396650 (noting that while landlords in low-income areas “aggressively recruit voucher-holders,” a study of available housing in Austin, Texas, showed that only a small portion of all available units were rented out by landlords willing to accept vouchers).

[4] Source of Income Discrimination in Housing, Affordable Housing Online, https://affordablehousingonline.com/source-of-income-antidiscrimination-laws (last visited Mar. 11, 2017) (noting that, as of November 2016, there were 42 jurisdictions prohibiting discrimination against Section 8 Housing Choice Voucher holders).

[5] See Bourbeau v. Jonathan Woodner Co., 549 F. Supp. 2d 78, 87-89 (D.D.C. 2008); Timkovsky v. 56 Bennett, LLC, 881 N.Y.S.2d 823, 831 (N.Y. 2009); Comm’n on Human Rights & Opportunities v. Sullivan Assocs., 739 A.2d 238, 245-46 (Conn. 1999); Franklin Tower One, L.L.C. v. N.M., 725 A.2d 1104, 1111-15 (N.J. 1999); Att’y Gen. v. Brown, 511 N.E.2d 1103, 1105-07 (Mass. 1987); Edwards v. Hopkins Plaza Ltd. P’ship, 783 N.W.2d 171, 175-79 (Minn. Ct. App. 2010); Montgomery Cnty v. Glenmont Hills Assocs. Privacy World at Glenmont Metro Centre, 936 A.2d 325, 334-39 (Md. Ct. App. 2007).

[6] See the cases cited in note 5, supra. Most courts upholding laws prohibiting source of income discrimination found that, because Section 8 vouchers constitute a “source of income” within the meaning of the state’s anti-discrimination statute, such laws do limit owner discretion, but “state and local law may [nevertheless] properly provide additional protections for recipients of Section 8 rent subsidies even if those protections could limit an owner’s ability to refuse to participate in the otherwise voluntary program.” Timkovsky, 881 N.Y.S.2d at 831. By contrast, the court in Edwards reasoned that, because (a) participation in the Section 8 program is voluntary, and (b) prohibiting owners from rejecting applicants and refusing to renew leases of existing tenants on the basis of their wish to use a Section 8 voucher makes participation in the program mandatory, such actions must not be prohibited by the anti-discrimination statute. 783 N.W.2d at 175-79; see also Knapp v. Eagle Prop. Mgmt. Corp., 54 F.3d 1272, 1282-83 (7th Cir. 1995) (suggesting in dicta that Section 8 vouchers should not be considered a “source of income” within the meaning of a Wisconsin anti-discrimination statute on the ground that an opposite holding would make the federal program mandatory). This way of avoiding a finding of conflict preemption amounts to a gutting of the anti-discrimination statute.

[7] Robert Wilonsky, Dallas nonprofit sues Texas over law that lets landlords refuse housing vouchers, Dallas News (Feb. 20, 2017), http://www.dallasnews.com/news/dallas/2017/02/20/dallas-nonprofit-sues-texas-law-landlords-turn-away-people-housing-vouchers.

[8] Tex. Local Gov’t Code Ann. § 250.007 (West 2017).

[9] Wilonsky, supra note 7. For an example of opposition to the 1964 Civil Rights Act appealing to the alleged right of business owners to decide who they want to do business with, see, e.g., A. K. Sandoval-Strausz, Travelers, Strangers, and Jim Crow: Law, Public Accommodations, and Civil Rights in America, 23 L. & History Rev. 53, 86 (citing an opponent of Act as asserting that the “fundamental question . . . is whether or not Congress has the power to take away the liberty of an individual to run his business as he sees fit in the selection and choice of his customers.”).

[10] Complaint at 1, Inclusive Communities Project, Inc. v. Abbott, No. 3:17-cv-440 (N.D. Texas Feb. 16, 2017), http://courthousenews.com/wp-content/uploads/2017/02/InclusiveCommunities.pdf.

[11] Id. at 7.

[12] Id. at 10, 12.

[13] Id. at 10.

[14] Id. at 12-13.

[15] Texas Dept. of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S.Ct. 2507, 2518-22 (2015).

[16] 426 U.S. 229, 239-41 (1976).

[17] See Rob Boshart, Republicans push ahead with local preemption, Globe Gazette (Feb. 9, 2017), http://globegazette.com/news/iowa/republicans-push-ahead-with-local-preemption/article_727f334c-f1b6-5c35-a5c9-60b3cda7b366.html (Iowa); Brian Eason, State to locals: You can’t do that. Or that., IndyStar (Mar. 6, 2016), http://www.indystar.com/story/news/politics/2016/03/06/state-locals-you-cant-do/80607546 (Indiana).

[18] See, e.g., Mike McIntire, Conservative Nonprofit Acts as a Stealth Business Lobbyist, N.Y. Times (Apr. 22, 2012), http://www.nytimes.com/2012/04/22/us/alec-a-tax-exempt-group-mixes-legislators-and-lobbyists.html.

[19] Max Rivlin Nadler, Preemption Bills: A New Conservative Tool to Block Minimum Wage Increases, New Republic (Feb. 29, 2016), https://newrepublic.com/article/130783/preemption-bills-new-conservative-tool-block-minimum-wage-increases. ALEC’s efforts in pushing state preemption statutes primarily target local minimum wage laws.

[20] See Housing Spotlight, Nat’l Low Income Hous.  Coalition (Nov. 2012), http://nlihc.org/sites/default/files/HousingSpotlight2-2.pdf (detailing percentage of households receiving federal housing assistance living in high-poverty neighborhoods by race).