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‘Source of income’ protection looming at Council

Tuesday, September 23, 2014 by Michael Kanin

Austin City Council members appear to be nearing final debate over a code change that would bar housing discrimination based on a resident’s “source of income.” Indeed, a Sept. 10 memo from city human resources director Mark Washington to Council outlines staff’s suggested language for the potential change.

Some herald the new language as a key step in improving access to housing for those aided by the Housing Choice Voucher program, otherwise known as Section 8. However, proposed code changes are meeting with concern from some quarters.

Washington was charged by a Council resolution sponsored by Council Member Bill Spelman to handle the job.

If the language in the change holds, it would define “source of income” as “lawful and verifiable income including, but not limited to, housing vouchers and other subsidies provided by government or nongovernmental entities, child support or spousal maintenance, but does not include future gifts.” The suggested code change would then add the phrase “source of income” to various sections of the ordinance that have the collective impact of banning discrimination based on the definition.

In addition to the suggested language change, the memo outlines opposition from those concerned about the impact of the proposal. This included a suggestion that the regulations should provide exemptions for smaller complexes “because of the presumed burden and cost of administering voucher programs.”

Staff noted that “none of the landlords were able to quantify the additional cost with an actual dollar figure, but rather stated that the added cost of doing business necessarily had to be passed on in the form of increased rents for everyone.”

Though Spelman admits that the added paperwork and regulation that come with accepting housing vouchers is a “very real” concern, he believes that cost impact may not be as high as some believe.

“You’ve got inspection requirements on Section 8 that are greater than inspection requirements anywhere else,” Spelman told the Monitor. “There is a fear — possibly unfounded, possibly founded — that it’s going to be more expensive to let an apartment once you are accepting Section 8 waivers because of the inspection requirements and having to fix stuff that the inspectors find … and then you have the issue of having to deal with the housing authority and having to pass the paperwork back and forth.”

Spelman continued: “I don’t think the inspection issue is as big an issue as people have made it out to be, and I don’t think the paperwork requirements are going to be as bad as people think they are in large part because they are much, much easier than they used to be.”

Other concerns include landlords’ ability to upgrade older properties to meet “structural inspection standards” posed by housing voucher programs and the added risks posed by voucher holders to “the indirect cost of discouraging new development because of the adverse regulatory environment.”

According to the memo, the Austin Board of Realtors and the Austin Apartment Association were among those who spoke against the change as part of the public input process. Though ABoR Director of Governmental and Community Affairs Emily Chenevert told the Monitor that the run-down of the community involvement process included in the city memo was not entirely accurate, she said the organization does have some concerns about the proposal.

Chenevert said these issues are mostly associated with whether the definition of “source of income” is overly broad in a way that might include activity such as gambling. She added that ABoR has also had “many questions over how this works … on the ground,” noting that a good initial focus would be to target multifamily dwellings. These, she suggested, would bring the most impact for the city’s policy.

Overall, however, Chenevert believes that, though the raw legal language may be problematic, the situation is workable.

The Austin Apartment Association has expressed support for voucher programs, but it draws the line at those programs being mandatory. In a statement to the Monitor, President Robbie Robinson explains.

“Forcing a business owner to participate in a federal program which Congress has mandated as voluntary, is offensive to most Texans and is likely to result in banning the practice statewide. In the meantime, we anticipate legal challenges to this ordinance as drafted. While similar laws have passed in other jurisdictions, they have not been tested against Texas law. An incentives-oriented approach would not be subject to such challenges,” wrote Robinson.

Robinson says that, as drafted, the ordinance will not solve the affordable housing and voucher acceptance issues facing Austin. Rather, she writes, the ordinance will “alienate the rental housing industry at a time when cooperation is what is needed most.” Robinson advocates for the incentives-based program supported by Mayor Pro Tem Sheryl Cole as a better model, saying that “Council should be thinking about legally responsible ways to increase voucher acceptance, instead of bluntly disregarding legitimate business concerns.”

Housing advocate Stuart Hersh told the Monitor that he too has concerns about the proposal. He noted that he was involved in the initial push to pass fair housing regulations for the City of Austin, and added that he’s generally supportive of the idea behind “source of income” protection. Still, he suggested that the city’s approach might not be ideal.

“(We need to do) it in a way that won’t be challenged in the courts or at the next session of the legislature,” Hersh said. He cited as an example recent actions taken by Council members regarding visitability, specifically regulations that seek to incentivize constructing broader access for the disabled.

Hersh suggested “a whole new chapter” in the regulations that wouldn’t list “source of income” as a protected class, but would look to achieve that goal in a creative way.

Chenevert agreed that there is “potential” for a challenge along the lines suggested by Hersh. She said that being “the first city to (do something like this) will always rouse some attention.”

More generally, Spelman noted that even with the source of income discrimination prohibition, landlords would not have their hands completely tied. “You do not have to rent an apartment to somebody just because they have a Section 8 waiver,” he said. “You can do a criminal background investigation, you can look at their rental history.”

He added that he believes that the changes could allow for more even distribution of affordable housing. That, he suggested was the original intent of the Section 8 program.

Spelman also noted that he believes concerns will “dissipate once they actually put this into practice.”

The item appears headed for the Oct. 2 Council meeting.

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