How To Ensure Compliance With State And Local Fair Housing Law
This month, we are going to focus on state and local laws that expand coverage of federal fair housing law beyond the seven characteristics protected under the Fair Housing Act (FHA). Depending on where your community is located, it may be subject to additional fair housing requirements imposed by state, county, or municipal governments.
Even if those laws do not apply currently to your community, that soon may change: There is increased activity among state and local governments to take up where federal law leaves off, particularly on hot button issues, such as sexual orientation, immigration status, and source of income.
In this issue, we'll provide an overview of the types of fair housing protections being added at the state and local levels. Then, we'll give you four rules to enable your community to comply with applicable state and local requirements. Finally, you can take the COACH's Quiz to see how much you have learned.
COACH'S TIP: The information presented in this issue will give you a solid foundation for meeting the challenges posed by a myriad of differing state and local fair housing laws. However, to fully protect your community from fair housing trouble, you'll need to review and get legal advice on the particular state and local laws applicable to your community.
WHAT DOES THE LAW SAY?
The FHA prohibits housing discrimination based upon race, color, national origin, sex, familial status, disability, or religion. Some states limit protections to the seven federally protected classes, but a number of state legislatures—to varying degrees—have expanded fair housing or civil rights laws to ban discrimination based on other characteristics. Common examples are ancestry, creed, marital status, age, and—most recently—sexual orientation.
At the local level, there has been increased activity in city, town, parish, and county governments to expand coverage of fair housing protections beyond federal or state requirements. Examples include characteristics such as physical appearance, political affiliation or belief, arrest or criminal history, and immigration status. Generally, communities must comply with local laws, even if they extend the ban on housing discrimination to characteristics that are not protected under federal or state fair housing laws.
Example: The Iowa Supreme Court recently upheld a city ordinance banning discrimination in employment and housing based on marital status, which is not a protected characteristic under federal or Iowa law. The case involved an owner of a community in the city, who challenged the legality of the ordinance after being accused by a prospective residential property manager of employment and housing discrimination based on marital status.
The court ruled that the city had the authority to prohibit discrimination in employment and housing based on marital status because state law authorized cities to adopt broader or different categories of unfair or discriminatory practices. In contrast, the court struck down the portion of the same ordinance that made all employers subject to liability for unfair employment practices because it conflicted with the state law exemption for small employers—those with fewer than four employees. Though the law permitted variations between local and state discrimination laws, it did not authorize the city to adopt an ordinance that was inconsistent with a clear legislative intent to exempt small employers from liability for employment discrimination [Baker v. City of Iowa City, Iowa, May 2008].
Despite variations in the manner in which state and local laws are enforced, a violation of state or local laws could subject your community to liability to pay monetary damages or penalties.
Example: The Equal Opportunities Commission in Madison, Wis., recently ordered a community to pay $4,300 in damages to an applicant for a violation of a city ordinance banning discrimination based on a “conviction record.” The law allowed an inquiry into an applicant's criminal record, but it imposed limits on an owner's ability to exclude applicants on that basis. The law also imposed certain procedural requirements in conducting and maintaining records related to criminal background checks.
After conducting a background check, the owner rejected an application based on the applicant's criminal record. To avoid homelessness, the applicant moved in with a girlfriend, even though it put him in violation of the terms of his parole. Because of that violation, he was incarcerated.
The commission noted that the owner had a legitimate, nondiscriminatory reason to reject the applicant (because he did not have enough verified income to pay the rent and provided an incomplete rental history). Nevertheless, the commission ruled that the owner violated several procedural requirements of the ordinance. Because the owner violated the ordinance, the community had to pay the applicant $300 in economic damages and $4,000 for emotional distress [Larry v. Peterson, June 2008].
PROTECTED CHARACTERISTICS UNDER STATE AND LOCAL LAWS
Here is an overview of the types of protections being added on the state and local levels:
Sexual orientation. In May 2008, Colorado became the latest state to adopt a ban on discrimination based on sexual orientation. Fair housing attorney Avery Friedman notes a growing trend among state and local governments to add protections based on sexual orientation or gender identification under fair housing and civil rights laws.
The laws protecting sexual orientation generally apply to an individual's actual or perceived orientation as heterosexual, homosexual, or bisexual. In addition, some state and local laws define sexual orientation to include—or have separate protections for—gender identification or expression, which generally means gender-related identity, appearance, expression, or behavior that differs from that traditionally associated with the individual's sex at birth.
Communities face potential liability if they run afoul of state laws banning discrimination based on sexual orientation. If it's coupled with a claim under the FHA, a community could find itself defending a discrimination complaint in federal court.
Example: In March 2008, the federal court in New York refused to dismiss a lawsuit for discrimination based on familial status under the FHA and sexual orientation under state law, which was filed by a same-sex couple with a young child. According to the complaint, the couple applied for a two-bedroom unit for themselves and a child. In a phone conversation, the owner allegedly asked about their sleeping arrangements. The details of the conversation were in dispute, but the applicant said she explained that the women were in a romantic relationship and were going to share a room. According to the owner, he didn't understand from the conversation that the women were in a romantic relationship. Ultimately, the owner declined to rent them the unit, and the couple sued.
The court rejected the owner's request to dismiss the FHA claim because of conflicting evidence related to possible discrimination based on familial status. The owner said that he rejected their application because the couple seemed determined to get a puppy and he was worried about damage to the unit, but the couple alleged that he was more concerned about the issue of lead paint and “the added liability of a young child.” Similarly, further proceedings were needed to resolve the sexual orientation claim under state law. Although the owner claimed that he didn't know the women were lesbians, the couple said they explained their relationship to him before he refused them housing [Swinton v. Fazekas, March 2008].
COACH'S TIP: Although the FHA does not prohibit discrimination on the basis of a person's sexual orientation, HUD says that it will evaluate complaints based on sexual orientation on a case-by-case basis to determine whether any other form of discrimination is present (such as age or disability, for example).
Marital status. About half the states and many municipalities include fair housing protection based on marital status. Those laws generally ban discrimination based on whether the applicant or resident is single, married, divorced, or separated.
If your community is subject to laws protecting marital status, you should get legal advice to determine whether your community may refuse to rent to unmarried couples. The issue may be relevant, particularly if your community is located in a state where laws criminalizing cohabitation are still on the books.
In some cases, community owners have protested that requiring them to rent to unmarried couples violates their religious beliefs. Court cases on the issue have been mixed. In 2004, for example, the Alaska Supreme Court refused an owner's request to overturn its previous ruling to allow him to refuse to rent to an unmarried couple on religious grounds [Thomas v. Anchorage Equal Rights Commission, December 2004]. Similar rulings have been issued by courts in California and Massachusetts.
In contrast, some courts have ruled that the law banning discrimination based on marital status does not require owners to rent to unmarried couples when doing so violates their religious beliefs. North Dakota, which includes protection based upon “status with respect to marriage,” amended its statute in 2001 to explicitly state that nothing under those provisions “prevents a person from refusing to rent a dwelling to two unrelated individuals of opposite gender who are not married to each other.”
Generally, the court cases on discrimination based on marital status have involved unmarried heterosexual couples, but the laws may be used in cases involving discrimination claims by same-sex couples. In Michigan, for example, where state law does not include protections based on sexual orientation, fair housing advocates sometimes rely on state civil rights laws protecting marital status to pursue claims based on sexual orientation, according to a recent report.
Furthermore, it's unclear whether protections based on marital status may come into play as more states recognize same-sex marriage. In states that don't include sexual orientation among their protected classes, it's possible for same-sex married couples to assert discrimination claims under state or local laws banning discrimination based on marital status.
Source of income. At least 13 states and many county and municipal governments bar housing discrimination based on “source of income.” Those laws generally apply to lawful sources of income, such as earnings, grants, gifts, inheritance, pensions, annuities, alimony, child support, and government or private assistance.
In some jurisdictions, those laws also protect individuals receiving public housing assistance through the federal Section 8 voucher program, which provides rent subsidies to eligible low-income families. Under federal law, participation by communities in the Section 8 housing program is voluntary, but you should seek legal advice before turning away applicants with Section 8 vouchers if your community is subject to state or local laws banning discrimination based on source of income.
In some cities, a community's ability to exclude applicants with Section 8 vouchers depends on the wording of the state or local law and how the courts have interpreted it. For example, in March 2008, New York City added “lawful source of income” as a protected class under the city's human rights law. The law defines “lawful source of income” as income derived from Social Security or any form of federal, state, or local public assistance or housing assistance, including Section 8 vouchers.
In contrast, Oregon law bars discrimination based on source of income, but it defines source of income to exclude “federal rent subsidy payments under [the Section 8 housing program].”
And in California, the law defines source of income as “lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.” The definition also states that “a landlord is not considered a representative of a tenant,” so the law has been interpreted to exclude payments made directly to the community—such as Section 8 vouchers.
Court rulings on the issue have been mixed. Despite earlier decisions indicating state or local laws banning discrimination based on source of income don't apply to Section 8 housing vouchers, recent court decisions have reached the opposite conclusion. In January 2008, the Connecticut Supreme Court ruled that a state law banning discrimination based on “lawful source of income” barred an owner from excluding a prospect with a Section 8 housing voucher [Commission on Human Rights and Opportunities v. Sullivan, January 2008]. And in April 2008, a federal court in the District of Columbia refused to dismiss a housing discrimination claim under the D.C. law banning source of income discrimination against a community for allegedly refusing to accept a prospect with a Section 8 housing voucher [Bourbeau v. Jonathan Woodner Co., April 2008].
This summer, the Supreme Court declined to rule on the issue when it let stand a Maryland Supreme Court decision that a community had accepted prospects with Section 8 vouchers because of a county ordinance prohibiting discriminatory housing practices based on source of income [Montgomery County, Maryland v. Glenmont Hills Associates, November 2007].
EDITOR'S NOTE: For more detailed information on fair housing laws related to source of income, see the August 2008 issue of Fair Housing Coach, “Laws Protecting Applicants and Residents Who Receive Housing Assistance.”
Military status. As a group, individuals who currently or formerly served in the military are not protected from discrimination under federal fair housing law unless they qualify as an individual with a disability or fall within one of the other protected groups under the FHA. With increasing numbers of veterans returning from Iraq and Afghanistan, however, fair housing expert Avery Friedman predicts that military status may be next to join the seven protected characteristics under federal fair housing law.
Meanwhile, a number of state and local laws offer protections in various forms based on military status or discharge. If your community is subject to such laws, it's particularly important to check the specific language used in the law to determine what they cover. Some states, such as New York, simply refer to “military status.” In others, however, the laws refer not only to military status, but also to the nature of a veteran's discharge. For example, Washington law refers to honorably discharged veterans or military status, but Illinois law refers to military status and “unfavorable discharge from military service.”
Ancestry. To supplement federal fair housing protections based on national origin, many states and local laws also ban discrimination based on ancestry. Those laws have been adopted out of concern that the FHA's ban on discrimination based on national origin applies only to discrimination based on where the applicant was born. To address the issue, some state and local governments have added ancestry to prohibit discrimination based upon the country of origin of the applicant's family.
Creed. Similarly, some state and local governments ban discrimination based on creed to supplement the federally protected characteristic of religion. Protections based on creed may extend to any sincerely held belief, though in some states—such as Massachusetts, Pennsylvania, and Vermont—the laws refer specifically to “religious creed.”
Age. The laws in some states and municipalities ban discrimination based on age. Often, the laws apply to individuals aged 18 and older, as well as emancipated minors. But in some states, the laws ban discrimination for individuals who are over 40. And in Virginia, the law bans discrimination based on “elderliness.”
Domestic violence victims. Some state and local laws protect victims of domestic violence as members of a protected class under fair housing laws, or have other laws offering some form of protection for victims of domestic abuse.
COACH'S TIP: Among the other characteristics protected under the state or local laws are: immigration status, lawful occupation, political beliefs or affiliation, student status, HIV status, personal appearance, and genetic information. In addition, New Jersey law bans discrimination based upon civil union and domestic partnership status. And in California, the state's civil rights law has been interpreted to apply to arbitrary discrimination based on personal traits, beliefs, or characteristics.
4 RULES TO ENSURE COMPLIANCE WITH STATE AND LOCAL FAIR HOUSING LAWS
Rule #1: Become Familiar with State and Local Fair Housing Laws
The first step to protecting your community from fair housing trouble is to do your homework. Much of the focus in your compliance efforts will be on federal fair housing law, but it's equally important to comply with state or local housing discrimination laws. The laws vary widely in what they cover—from state to state, and even within a state—so it's incumbent upon you to know what laws apply to your community, according to fair housing attorney Henry Korman.
That will require you to check the law in both the state and municipality in which your community is located. And if your company owns communities in more than one municipality within a state—or in more than one state—then you'll have to check all applicable state and local requirements to avoid fair housing trouble.
There are many sources of information about state and local requirements. For state laws, Korman recommends starting with the fair housing or human rights agency or commission in your state. You may call and ask them to send you information, or get the answers you need online from the agency's Web site. For local requirements, he recommends checking with the local municipality.
Another source of information is from state and local apartment associations, according to fair housing expert Anne Sadovsky. She says you should be able to get information online through an association's Web site.
Rule #2: Ensure Your Policies and Procedures Comply with State and Local Fair Housing Laws
After learning about state and local requirements, the next step is to put them into practice through your community's rules, advises Friedman.
Korman agrees. He recommends having a set of comprehensive written policies and procedures to provide guiding principles to your staff in operating the community. In addition to a statement that your community does not discriminate based on the seven federally protected characteristics—race, color, national origin, sex, familial status, disability, or religion—Korman recommends including a locality-specific fair housing statement that lists any characteristics protected under state or local law. Training your staff and letting them know they are expected to refer to your policies and procedures during the normal course of business will increase the likelihood that those policies and procedures will be kept handy and applied consistently, Korman says.
Even if your community is not currently subject to additional state or local fair housing requirements, you may expand your fair housing policy and procedures beyond the seven federally protected characteristics.
Communities can add to the protected classes, according to Sadovsky. After all, your primary goal in screening prospects is to select residents who will abide by the terms of their leases—pay rent on time, not disturb others, and treat your community with respect—not to make arbitrary judgments about people based on stereotypes.
Having an expansive nondiscrimination policy is a smart business decision, says Sadovsky. You can emphasize your community's commitment to fair housing in your marketing materials to attract prospects and potentially increase occupancy in your community.
COACH'S TIP: If you own or manage communities in more than one municipality or more than one state, you may be faced with different requirements under state or local law for each. In Texas, for example, Sadovsky notes that several cities, including Austin, Dallas, and Houston, have adopted protections based on sexual orientation, though it is not currently a protected characteristic under federal or state law.
Rather than adopting a site-specific policy for each community, fair housing experts recommend incorporating all the different state or local requirements in a comprehensive fair housing policy. Having one set of policies and procedures avoids confusion over which one applies to which community—particularly if your staff handles communities in various locations. It's also more practical and less expensive to have one set of policies and procedures and to have just one training program for your entire staff.
Rule #3: Train Staff on State and Local Fair Housing Laws
Chances are, your training efforts have been primarily focused on federal fair housing requirements. However, to fully protect your community from fair housing trouble, it's important to build upon that foundation by training your staff on any applicable state and local requirements. Many owners have expanded fair housing protections well beyond the seven federally protected classes—and who is covered often depends upon the precise wording used in the law. Without training, your staff may not be aware of those requirements, understand what is prohibited, or know how to prevent potential problems.
To build a comprehensive fair housing program, you must ensure that your staff is trained on the specific requirements under the state or locals laws applicable to your community. Circumstances involving state and local requirements may not come up frequently, but when they do, the training will ensure that your staff is prepared to recognize—and know how to avoid—any potential sources of fair housing trouble.
COACH'S TIP: To strengthen your compliance efforts, Friedman recommends that communities develop a relationship with the agencies that enforce state and local fair housing laws. And, he says, you should make known your desire to participate in fair housing training programs sponsored by state and local agencies.
Rule #4: Keep Track of Changes to State and Local Fair Housing Laws
To fully protect your community from fair housing trouble, it's important to stay updated on developments in federal, state, and local fair housing laws.
On the federal level, Friedman predicts a relatively conservative expansion of fair housing protections, depending on what happens with the new administration in Washington. In the coming year, Congress may consider proposed amendments to the FHA to expand protection for military status or sexual orientation, but it's unclear if—or when—such changes will be adopted.
Nevertheless, you should be prepared for more developments on the state and local level, Friedman says. Many states have adopted—or are considering extending—protections beyond the FHA to include protected classes such as age, military status, marital status, sexual orientation, and source of income. And there is a quantifiable increase in local governments enacting fair housing ordinances, according to Friedman.
Changes to state and local laws may occur relatively quickly and be less publicized, so it's important to stay in touch with state and local fair housing agencies and advocacy groups. By monitoring developments, you will be better prepared to update your policies and procedures as needed to comply with federal, state, and local fair housing laws.
Fair Housing Act: 42 USC §3601 et seq.
Avery Friedman, Esq.: Chief Counsel, Fair Housing Council, 705 The City Club Building, 850 Euclid Ave., Cleveland, OH 44114-3358; (216) 621-9282; email@example.com.
Henry Korman, Esq.: Attorney at Law, 236 Lewis Wharf, 28 Atlantic Ave., Boston, MA 02110; (617) 227-5070, ext. 31; firstname.lastname@example.org.
Anne Sadovsky, CSP: Anne Sadovsky and Co., Dallas, TX; (866) 905-9300; email@example.com.
FAIR HOUSING COACH GOING ENVELOPE-FREE STARTING IN JANUARY
Fair Housing Coach will be taking its first step going green. Starting with the January 2009 issue, the monthly print version of Fair Housing Coach will be delivered to you envelope-free, as a self-mailer. Although you will see a change in the design and mailing format, Fair Housing Coach will continue to be jam packed with clear, concise explanations and case studies to help you train your staff and reduce your risk of fair housing violations and expensive fines.