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Fair Housing & Discrimination Part I

May a landlord choose to reject all tenants receiving Section 8 rental subsidies without violating Fair Housing Laws?

Fair Housing laws do not make all discrimination illegal. A landlord who insists upon receiving $1,000 a month rent for an apartment is discriminating against persons who cannot afford to pay $1,000 a month rent. Landlords can discriminate against people who smoke and pet owners. Fair Housing laws make it unlawful to discriminate against persons based upon their membership in a protected class. Federal Fair Housing laws make it illegal to discriminate on the basis of race, color, religion, sex, handicap, familial status and national origin. Colorado law also prohibits discrimination based upon marital status, creed, and ancestry. Some municipalities in Colorado prohibit discrimination based upon sexual orientation.

Concept of Discriminatory Impact

As far as this author is aware, there is no explicit prohibition within federal or state Fair Housing laws prohibiting discrimination against persons receiving Section 8 subsidies. (If any reader of this article is aware of law to the contrary, this author asks that you inform him through the email address below.) However, there is a notion in Fair Housing law that practices which on their face do not discriminate based upon an individual’s membership in a protected class may still violate Fair Housing laws if the practice has a discriminatory effect or a “disparate impact” on a protected group.

Next month’s column will discuss three different cases in which courts have concluded that the practice of discriminating against subsidized tenants does have a discriminatory effect on protected classes and is therefore prohibited. These three cases don’t decisively answer the question asked by this article. In two of the cases, the landlord rejected tenants receiving AFDC subsidies-a practice which has the direct consequence of discriminating against families. In the third case, the landlord rejected tenants receiving Social Security disability benefits-a practice which directly discriminates against disabled persons. In two of the cases, the plaintiffs merely survived a Motion to Dismiss; they did not necessarily win. The one unabashed victory for the plaintiffs was from an administrative law judge decision, not a decision by a court.

Yet, the doctrine of disparate impact has ample support. Landlords should be mindful that practices which, on their face, are neutral amongst protected classes may still create liability because they have a discriminatory effect against certain protected classes. The disparate impact theory has ramifications beyond rental subsidies and is an important concept for any landlord. Next month’s column will discuss these three cases in detail.

Read Part II of this article.

A version of this article appeared in the Colorado REALTOR® News, the monthly publication of the Colorado Association of REALTORS®.

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