Why Is It Legal for Landlords to Refuse Section 8 Renters?

San Jose and Baltimore are considering bills to prevent landlords from rejecting tenants based on whether they are receiving federal housing aid. Why is that necessary?

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This week, the San Jose City Council asked the city attorney to draft an ordinance that would compel landlords to consider tenants who accept federal aid in the form of Housing Choice Vouchers, the program commonly known as Section 8. Baltimore’s city council is looking to pass a similar law. In these cities and in much of the nation, landlords are currently free to disregard or screen tenants merely on the basis of receiving assistance.

{snip} New research about landlords and renters points to tendencies that drive segregation by race and poverty. Unfortunately, these biases are hard to uproot — but some places are having an easier time of it than others.

“It’s very common for landlords to outright deny voucher holders,” says Martha Galvez, senior research associate at the Urban Institute.

Rules like the ones on track in Baltimore and San Jose would not “force” landlords to accept Section 8 vouchers (as some landlords might tell it). That’s a misperception, Galvez says. Rather, these laws prohibit landlords from rejecting tenants based exclusively on where the rent check is coming from.

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Prejudice is one reason. In many cities, the words “Section 8” function as a powerful slur. {snip} Housing vouchers are part of both the problem and the solution.

Filtering Section 8 applicants, housing advocates say, is a backdoor way for landlords to discriminate against minority renters. {snip} Nationwide, 69 percent of voucher holders are racial minorities. In cities, that share can be much higher: As the Equal Rights Center notes, more than 90 percent of voucher holders in Washington, D.C., are black, despite the fact that African Americans now make up only 48 percent of the city’s population.

But racial discrimination is at best an incomplete explanation for why landlords avoid renters who are receiving housing aid.

A lot of what we know about landlords’ attitudes stems from “classic” studies on inner-city landlords from the 1960s and ‘70s. Most low-income landlords aren’t racist slumlords, this research concluded, but they are inefficient managers with little knowledge about real estate, finance, or government programs; most are financially vulnerable themselves. More recent research shows that this is still largely true of low-income landlords today.

For their part, skittish landlords say that accepting tenants who use federal housing aid means signing up for tedious paperwork, frustrating delays, and demanding inspections. {snip}

While low-income landlords might be the victims of systemic segregation, too, they do make decisions that actively further the concentration of poverty. Landlords will sometimes accept vouchers for properties in poorer neighborhoods but screen them for others in wealthier areas, as a 2017 lawsuit demonstrated in Dallas. {snip}

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But there’s no research to show that voucher holders make worse tenants than any other renters; in fact, there’s some research to indicate that landlords ask more questions of other low-income applicants than they do for Section 8 applicants. {snip}

Explicit racial discrimination or no, the effect is the same: Landlords who slam the door shut steer voucher holders toward areas of concentrated poverty in minority neighborhoods. {snip}

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States have a great deal of say in how landlords treat Section 8 renters, from California (where the state’s source-of-income law doesn’t apply to vouchers) to Texas (where state law preempts any city from passing local protections). Dizzying state and local ordinances alone do not explain why there’s so much variance between places where this particular box is banned.

Other research sheds a light on why landlords might be biased against vouchers in the first place. Context drives landlord decision-making, according to researchers at the University of Hawaii, Georgetown University, Johns Hopkins University, and Princeton University. Landlords weigh the value of housing vouchers against the potential benefit of what researchers call a counterfactual tenant — another hypothetical renter who might walk through the door with an application. This means that landlords, too, are testing Section 8 applicants against control groups (of their own imagining).

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It’s important to remember that the Housing Choice Vouchers program is incredibly successful, despite the charges of racial discrimination or excessive red tape that critics have levied against it over the years. Some 2.5 million low-income families use vouchers to maintain affordable housing every day. Endless waiting lists are the biggest crisis for housing vouchers: More than 3 million families are stuck in this limbo. For the families who do receive a voucher, finding an apartment that will accept it is another hurdle. Landlords are largely responsible for how this process works.

That process can be improved. Source-of-income laws that require landlords to look at vouchers the same way they would any other kind of rent payment is part of the solution. Outreach to landlords in more affluent neighborhoods is another one. So are program-side fixes such as HUD’s Moving To Work program. In D.C., which is part of the Moving To Work demonstration, the city sets neighborhood rents for vouchers instead of a single citywide limit. That makes vouchers much more palatable to landlords across neighborhoods with a variety of economic circumstances.

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