DEPARTMENT: Neighborhood & Housing Services Department
DEPARTMENT HEAD: Verónica R. Soto, FAICP, Neighborhood and Housing Services Department Director
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT: A briefing on potential actions related to preventing Source of Income Discrimination.
SUMMARY: Briefing discussing potential actions protecting renters from being denied access to housing based on their Source of Income.
BACKGROUND INFORMATION:
Source of income discrimination (SOID) is the refusal to rent or sell a housing unit to an applicant, or ending a tenancy, based on the applicant’s lawful form of income. Lawful sources of income include government or non-profit administered income such as Social Security, and Social Security Insurance; non-government funded sources of income include spousal maintenance and child support; and income from various programs including Housing Choice Vouchers (Section 8) Housing Opportunities for Persons with HIV/AIDS (HOPWA), and Veterans Affairs Supportive Housing (VASH) vouchers.
At the federal level, source of income is not a protected status or class under the Fair Housing Act. However, some federal programs, such as the Low-Income Housing Tax Credit program, HOME, and CDBG require properties to accept some forms of income such as Housing Choice Vouchers.
The Texas legislature prevented cities from adopting ordinances prohibiting landlords from refusing to lease to a person whose source of income includes federal housing assistance, except for veterans. A city can prohibit SOID in properties that receive municipal incentives or other City support, as well as adopt policies requiring set-aside units for voucher households.
The City of Dallas is currently the only city in Texas that has an active SOID ordinance. Their ordinance requires any development benefiting from a local subsidy or financial award to accept housing vouchers and other legal sources of income. Additionally, for multifamily developments, 10% of units for lease must be available to voucher holders for 15 years from the certificate of occupancy’s issuance. Failure to comply with the Ordinance may result in injunction relief, damages, civil penalties, and attorney’s fees. San Antonio does not have an Ordinance tying City incentives and SOID protections. The City does have a non-discrimination ordinance (Article X of the municipal code.) Section 2-621 of the code states:
It is the policy of the city, through fair, orderly and lawful procedures, to promote the opportunity for each person to obtain housing without regard to race, color, religion, sex, sexual orientation, gender identity, veteran status, disability, familial status, national origin or age. This policy is grounded upon a recognition of the right of every person to have access to adequate housing of the person's own choice, and that the denial of this right because of race, color, religion, sex, sexual orientation, gender identity, veteran status, disability, familial status, national origin or age is detrimental to the health, safety, and welfare of the inhabitants of the city and constitutes an unjust deprivation of rights, which is within the power and proper responsibility of government to prevent.
In June of 2020, City Council also adopted the Notice of Tenants’ Rights ordinance, which requires all landlords within city limits to include a Notice of Tenants’ Rights document with any notice to vacate for non-payment of rent they issue.
ISSUE:
The primary administrator of vouchers in San Antonio is the San Antonio Housing Authority (SAHA). As of November 2020, 13,015 families utilized vouchers administered SAHA. An additional 7,627 households are on the waitlist for a voucher. The Housing Authority of Bexar County (HABC) currently administers approximately 1,800 vouchers with an additional 7,000 households currently waitlisted. The Alamo Area Council of Governments (AACOG) and Veterans Affairs also administer vouchers within San Antonio and Bexar County.
Currently, property managers in San Antonio can use an applicant’s lawful source of income as a reason to deny housing. Some federal programs, such as Low-Income Housing Tax Credit program, HOME, and CDBG require properties to accept some forms of income such as Housing Choice Vouchers. However, developments using other funding sources are permitted to deny a potential tenant based their income source. Voucher holders must still meet other requirements, such as background and credit checks, and be able to pay the advertised rent with the support of their voucher.
National studies from HUD and the Center for Budget & Policy Priorities found that municipalities with source of income discrimination protections observe fewer landlord denials for voucher holders. While San Antonio does not have consistent historical data to confidently say that landlord voucher participation is trending in a particular direction, there is also no reason to expect that San Antonio is likely to differ significantly from national studies. A September 2018 study that included Fort Worth, TX found that voucher holders were more likely to be denied in low-poverty areas of the city and had a greater than 60% chance of being denied in high-poverty areas of the city.
While there are legal restrictions prohibiting a City-wide probation on SOID, City staff is exploring two options to prevent SOID in certain cases:
1) Prohibit Source of Income Discrimination in City-supported developments
2) Adopt a city-wide ordinance prohibiting SOID against veterans
The first potential action is an amendment to Article X: Non-Discrimination Policies of the City Code. This amendment would prevent developments, landlords, and management companies receiving any City funding or incentives from denying an applicant based solely on their income source, including federal vouchers. This action is grounded on the idea that every person should be able to access adequate housing of their choice, and the denial of this right because of race, color, religion, national origin, sex, sexual orientation, gender identity, veteran status, age or disability, and lawful source of income is detrimental to the health, safety, and welfare of the inhabitants of the city and constitutes an unjust deprivation of rights, which is within the power and proper responsibility of government to prevent. The City of Dallas did amend the anti-discrimination section of their City code to include lawful source of income as a protected status.
This Ordinance would apply only to rental developments receiving grants, loans, tax abatements, or monies awarded by the City. This includes, but is not limited to, Tax Increment Reinvestment Zone (TIRZ) and Neighborhood Improvement Bond (NIB) awards, City Center Development Office (CCDO) fee waivers, loans, tax abatements, Neighborhood and Housing Services Department (NHSD) grant awards, and other incentives or awards. The Ordinance would not apply to developments receiving Resolutions of Support or Resolutions of No Objection for Low-Income Housing Tax Credit developments that do not have funding awards. It should be noted there are SOID protections associated with LIHTC developments as part of the program already including protections for Housing Choice Voucher holders. Compliance periods in Dallas are for 15 years from the issuance of the certificate of occupancy. The City could adopt a similar timeline or align its compliance period with the covenant of the award which vary by program.
The Ordinance would require any development receiving any City funding or incentives not deny any applicant based solely on their income source, including federal vouchers. This Ordinance would have no impact on the unit qualifying for the federal program and would not require developments to accept voucher holders if they are not eligible for other reasons. The Ordinance would amend language to Article X: Non-discrimination policies of city code. Staff is working with the City Attorney’s Office (CAO) to draft an ordinance should Council decide to implement this action and recommends that the policy be workshopped by stakeholders in the Strategic Housing Implementation Plan (SHIP) process.
The second potential Ordinance would be a citywide ban on source of income discrimination for veterans. This Ordinance would apply to any development, landlord, and property manager in San Antonio. It would prevent a development, landlord, or property manager from denying any veteran based solely on their use of a voucher. Staff at the City of Dallas have shared that they do interpret their ordinance to carry these protections for veterans. Implementation of this recommendation should be informed through conversations with community members, developers, voucher administrators such as SAHA, funders such as SAHT, and service providers who work with clients to find housing using vouchers. Staff recommends that this recommendation be considered through the Strategic Housing Implementation Plan (SHIP) process.
Enforcement of source of income discrimination ordinances is most often based on complaints and proactive testing. Complaint based enforcement will be initiated by a resident believing they have experienced SOID to the City, such as by calling 311 or NHSD’s Fair Housing Division. Many cities including Dallas also employ testing through a partnership with a local fair housing non-profit agency. In testing, a tester poses as a voucher holder seeking a unit and asks the property management team if vouchers are accepted. This may require a contract with a local agency experienced in testing, such as the Fair Housing Council of Greater San Antonio. Staff recommends that enforcement mechanisms begin with required trainings, or non-financial penalties for first-time offenses and could graduate to financial penalties up to reclaiming awarded dollars for continued non-compliance.
ALTERNATIVES:
This item is for briefing purposes. However, PLDC may direct staff to explore one or more of the potential Source of Income Discrimination related Ordinances.
PLDC may prioritize staff’s work on the potential Ordinances.
PLDC may direct staff to not pursue one or more of the Ordinances which would result in no change to Source of Income Discrimination in the City.
FISCAL IMPACT:
There is no fiscal impact at this time.
RECOMMENDATION:
Staff recommends the Committee provide direction on which if any Source of Income Discrimination Ordinances to pursue.