City Council Passes New Rules to Curb Housing Discrimination

On Monday night, Denver City Council passed an ordinance that makes it illegal for landlords to refuse housing to potential renters based on income sources (think Housing Choice Vouchers—formerly known as Section 8—disability benefits, student loans, child support, and other non-wage forms of payment). The legislation will go into effect January 1, 2019.

Supporters of Council Bill 18-0788 say the new law is a step toward improving diversity and integration throughout the city, but opponents claim it puts an unreasonable onus on landlords to navigate a bulwark of slow-moving federal bureaucracy, extra unit inspections that some federal vouchers require, and financial vulnerability should a tenant without wages do more damage to a rental unit than could be covered by a security deposit. Some landlords even said they’ll consider selling their rental properties to avoid the hassle. The new rules also apply to prospective home buyers.

Councilwoman At-Large Robin Kniech, who introduced the legislation, said at the bill’s public hearing on July 30 that the bill is intended to help address the city’s affordable housing crisis by expanding access to families with various types of income. “You should not be turned away from buying or renting a home that you can afford just because of how you pay for it,” Kniech said.

The councilwoman also pointed out that by putting all forms of income on equal footing, tenants who were before limited to living only where Housing Choice Vouchers (HCV) or HUD-Veterans Affairs Supportive Housing vouchers, for example, are accepted will have an improved shot at upward mobility if they have more choice in living where best suits them, such as near their workplaces, families, or better schools.

Though the bill passed, there might still be work to be done.

“We’ve all heard from a lot of landlords, [I’m] particularly concerned about some small-scale landlords,” said Councilwoman Kendra Black (District 4), at Monday night’s meeting. “As with any law that we pass, there’s always the risk of unintended consequences, so I want us to monitor this.”

Skye Stuart, a representative of the mayor’s office, which has the authority to initiate a spending bill—authority the Council does not have—stated last night that the office is beginning to research the possibility of creating a fund that landlords who rent to tenants without wage income could use in the event that tenant damages exceed the amount of the damage deposit.

During the July 30 hearing, a number of landlords raised concerns specifically about HCV, saying they lose money and time when they accept these vouchers. “It takes an amazing amount of time just to get someone in the door, to get through the inspection process,” said Denver landlord Maria Fiorillo. “If you make one mistake on the paperwork, they send it back and you start all over. They will not pay you, they will not respond to you. It is really, really hard.”

Under the new law, if rental applicants believe they have been turned away from a unit they can afford solely on the basis of income type, they can file a complaint and undergo an administrative review process carried out by Denver Human Rights and Community Partnerships, according to Kniech. Landlords retain the right to determine how much income they deem sufficient to rent their unit, but they cannot refuse to accept a type of income that is legal and verifiable. If a landlord is found to have discriminated and does not remediate their actions (this could be providing a similar, alternative rental unit or ceasing discriminatory advertising), the landlord could be hit with a $5,000 fine.

Voucher holders do report being discriminated against at a higher rate than non-voucher holders. Thirty-nine percent of HCV holders in the Denver-metro area report experiencing discrimination for any reason, compared to 15 percent  of all renters, and 37 of HCV-holders report displacement, according to the 2017 Denver‐Aurora‐Boulder Regional AFH Resident Survey by BBC Research & Consulting.

But landlords decry the added burden, with some even claiming that they’ll sell their properties and buy elsewhere to avoid the possible repercussions of an income discrimination law. “If this is a cost landlords have to take on, it’s also going to mean increased rents. We’re going to have to offset that some way,” Chelsea Thomas, a Denver resident who owns shares of six rental properties, said during the July 30 Council meeting.

She believes this could lead to a decreased rental housing supply in the city and county of Denver, which would be a major concern. Denver 7 reported in April that the average price of a one-bedroom apartment in Denver—about $1,500—is higher than the amount HCVs cover, which is around $1,300. So far in 2018, 308 of 1,371 HCVs issued in Denver (approximately 22 percent) expired before being used, though reasons why vouchers went unused are unknown.

Andrea Chiriboga-Flur, a transit organizer with Denver advocacy organization 9 To 5, said at last week’s meeting she believes the new law represents a step toward improving tenant rights in Colorado, pointing out that the Centennial State ranked 43rd in a study that assessed tenant-friendly laws across the nation. She argued the law gives more people a chance to live in Denver. “Right now, the decision really is, are we going to do more to prevent homelessness and pushing people further into poverty [for lack of housing], or into situations where they’re unstable and don’t have jobs? Or are we going to help those folks and perhaps put a burden—that may or may not happen—on the landlords?”