Why income discrimination laws hurt poor renters

RJ Sangosti/MediaNews Group/The Denver Post via Getty Images

 

Connecting state and local government leaders

COMMENTARY| Laws that ban discrimination against voucher holders can push smaller landlords out of the low-income housing market, decreasing the amount of affordable housing.

More cities and states have become concerned with landlords discriminating against people using government housing vouchers. Today 23 states and more than 100 local governments have “source of income,” or SOI, discrimination laws on their books, which typically allow renters to sue landlords who refuse to accept some types of payments, most especially vouchers. This year, for example, Kansas City, Missouri, passed its own SOI ordinance that bans discrimination against tenants based on the source of their rental income.

The desire to protect poor renters is understandable, but there is little reason to believe that SOI laws help them. The research on the benefits of SOI laws is spotty, and the costs they add to landlords renting to the low-income market are substantial. If politicians want to help low-income renters, they should reduce the burdens in the voucher program rather than force more landlords to shoulder them.

Vouchers were introduced in the 1960s as a substitute for traditional public housing programs, whose problems, including spiraling costs and poor government management, were already well known. Soon after, starting with Massachusetts in 1971, states and cities began banning discrimination against voucher holders. These governments treated discrimination against voucher holders as similar to discrimination against people in other categories, such as race or sex.

After decades, little is known about the effectiveness of these laws, except that they have not been a panacea. A 2019 survey from the U.S. Department of Housing and Urban Development found “research is mixed on the effectiveness of SOI laws.” Some studies show that SOI laws help voucher holders move to better neighborhoods, but as one noted, the “effects are modest.” This study found less than a 1 percentage-point decrease in neighborhood poverty rates, and this was limited to the group of existing voucher holders who moved.

Some studies claim that SOI laws increase the ability of local housing authorities to use all of the vouchers allotted to them by the federal government that would be lost due to a family’s inability to find housing. The problem with this argument is that almost all housing authorities already use all of their vouchers. If one family cannot use a voucher, another on their long waiting lists almost certainly will. For instance, in 2017, the voucher program nationwide used 99.9% of the funded vouchers, meaning just about every voucher issued by the federal government was used.

Almost no SOI studies look at the costs of the laws, but they are substantial. Although lawsuits based on income discrimination are less common than other types of housing laws, they are becoming a bigger issue. New York City itself files dozens of cases a year, which can sometimes cost landlords tens of thousands of dollars. Washington, D.C., won a $10 million settlement against some real estate firms and individuals based on voucher discrimination. In March HUD created a website that aims to help people avail themselves of SOI laws and sue their landlords.

Some might defend the costs of voucher discrimination enforcement as necessary, but that argument ignores how SOI laws help push landlords out of the low-income housing market altogether. Landlords are a broad class in America and most do not have a lot of excess funds. About 7% of all tax filers are landlords according to one estimate. Many are barely getting by. In 2018 about half of landlords reported negative income after deducting costs. Large numbers of minorities and women, especially in the inner city where voucher use is high, are landlords.

The bigger problem with SOI laws is that they treat the refusal of landlords to accept vouchers as the result of “prejudice,” similar to the unjustified exclusion of minorities or women. Yet voucher programs have real costs that require landlords to go above and beyond typical rental agreements. For instance, the government calls for annual inspections that can be slow and arbitrary. A HUD-funded series of interviews with landlords found that “administrative inefficiencies related to inspection are one of the primary drivers of nonparticipation” in the voucher program. HUD has noted many legitimate concerns that landlords have with vouchers, from the nature of the lease to difficulty learning about new tenants.

SOI laws force landlords to absorb extra costs and thus discourage some from entering the low-income rental market in the first place. Evidence shows that housing regulations decrease the provision of housing, and SOI laws add to those regulations.

Instead of forcing more landlords to accept vouchers, the costs of which the government itself acknowledges, the voucher system should be reformed. Allowing higher rental payments in better-off communities (and lower payments in poorer ones) can help voucher holders escape poverty. Reducing inspection and other burdens can encourage more uptake by landlords.

Rather than forcing landlords to endure more bureaucratic costs, the government can reduce the costs and burden they bear. Instead of SOI mandates, governments should make landlords partners in the voucher program and thus help encourage, instead of discourage, more housing for low-income renters.

Judge Glock is the director of research at the Manhattan Institute. He is the author of the book, The Dead Pledge: The Origins of the Mortgage Market and Federal Bailouts, 1913-1939. 

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.