BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 1053 (Leno)
Version: February 16, 2016
Hearing Date: March 29, 2016
Fiscal: Yes
Urgency: No
TH
SUBJECT
Housing Discrimination: Applications
DESCRIPTION
The Fair Employment and Housing Act makes it unlawful for the
owner of any housing accommodation to discriminate against or
harass any person because of the race, color, religion, sex,
gender, gender identity, gender expression, sexual orientation,
marital status, national origin, ancestry, familial status,
source of income, disability, or genetic information of that
person.
This bill would expand the definition of "source of income" to
include lawful, verifiable income paid to a housing owner or
landlord on behalf of a tenant, including federal, state, or
local public assistance and federal, state, or local housing
subsidies, including, but not limited to, federal housing
assistance vouchers under Section 8 of the United States Housing
Act of 1937, as specified.
BACKGROUND
The Fair Employment and Housing Act (FEHA) was created in 1980
when two prior statutes, the California Fair Employment
Practices Act and the Rumford Fair Housing Act, were combined
and recast in AB 3165 (Fenton, Ch. 992, Stats. 1980) with the
codification of Governor Brown's Reorganization Plan No. 1.
Broadly speaking, FEHA prohibits employment and housing
discrimination based upon such characteristics as race, color,
religion, sex, sexual orientation, marital status, national
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origin, ancestry, familial status, or disability, and provides
that it is a civil right to be able to pursue and maintain
housing or employment without facing discrimination.
In recent years the Legislature has expanded the protective
scope of FEHA to prohibit housing discrimination based on a
person's source of income, at first for a limited period of time
with SB 1098 (Burton, Ch. 590, Stats. 1999), and then
permanently with SB 1145 (Burton, Ch. 568, Stats 2004). Beyond
the general prohibition against discriminating on the basis of
one's source of income, FEHA also declares it unlawful to use a
financial or income standard in the rental of housing that fail
to account for the aggregate income of co-tenants on the same
basis as is given married persons, or to use a financial or
income standard in assessing eligibility for the rental of
housing that is not based on the portion of the rent paid by a
tenant when the tenant is the recipient of a government rental
subsidy. The Legislature has limited FEHA's source of income
protection to include only that "lawful, verifiable income paid
directly to a tenant or paid to a representative of a tenant,"
and has stated that "a landlord is not considered a
representative of a tenant" for the purpose of this provision.
(Gov. Code Sec. 12955 (p).)
This bill would expand FEHA's source of income protection to
include income paid to a housing owner or landlord on behalf of
a tenant, including federal, state, or local public assistance
and federal, state, or local housing subsidies, such as federal
housing assistance vouchers issued under Section 8 of the United
States Housing Act of 1937.
CHANGES TO EXISTING LAW
Existing law , the Fair Employment and Housing Act, declares it
to be against public policy to discriminate on the basis of
race, color, religion, sex, gender, gender identity, gender
expression, sexual orientation, marital status, national origin,
ancestry, familial status, source of income, disability, or
genetic information in housing accommodations. (Gov. Code Sec.
12920.)
Existing law declares that the opportunity to seek, obtain, and
hold housing without discrimination because of race, color,
religion, sex, gender, gender identity, gender expression,
sexual orientation, marital status, national origin, ancestry,
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familial status, source of income, disability, genetic
information, or any other specified basis is a civil right.
(Gov. Code Sec. 12921.)
Existing law declares it unlawful for the owner of any housing
accommodation to discriminate against or harass any person
because of the race, color, religion, sex, gender, gender
identity, gender expression, sexual orientation, marital status,
national origin, ancestry, familial status, source of income,
disability, or genetic information of that person. (Gov. Code
Sec. 12955.)
Existing law specifies certain acts that constitute unlawful
discrimination, including either of the following:
using a financial or income standard in the rental of housing
that fails to account for the aggregate income of persons
residing together or proposing to reside together on the same
basis as the aggregate income of married persons residing
together or proposing to reside together; or
in instances where there is a government rent subsidy, using a
financial or income standard in assessing eligibility for the
rental of housing that is not based on the portion of the rent
to be paid by the tenant. (Gov. Code Sec. 12955 (n), (o).)
Existing law specifies that it shall not constitute
discrimination based on source of income to make a written or
oral inquiry concerning the level or source of income. (Gov.
Code Sec. 12955 (p).)
Existing law provides that a person intends to unlawfully
discriminate if one of the protected classes played a motivating
factor in committing a discriminatory housing practice, as
specified. A violation can be found when the act has the effect
of unlawfully discriminating, regardless of the intent, as
specified. (Gov. Code Sec. 12955.8.)
Existing law defines "source of income" to mean lawful,
verifiable income paid directly to a tenant or paid to a
representative of a tenant, but specifies that a landlord is not
considered a representative of a tenant. (Gov. Code Sec. 12927,
12955 (p).)
This bill defines "source of income" to mean lawful, verifiable
income paid directly to a tenant or paid to a representative of
a tenant, or paid to a housing owner or landlord on behalf of a
tenant, including federal, state, or local public assistance and
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federal, state, or local housing subsidies, including, but not
limited to, federal housing assistance vouchers under Section 8
of the United States Housing Act of 1937.
COMMENT
1.Stated need for the bill
The author writes:
California is experiencing a rental crisis of historic
proportions. The shortage of affordable housing contributes
to the state's severe homelessness problem, one that
particularly impacts homeless veterans. High housing costs
also crowd out family spending on basic necessities, such as
food and health care, particularly for Californians who are
poor. According to the Legislative Analyst's Office, the
poorest 25 [percent] of California households spend on average
67 [percent] of their income for housing.
By far the largest federal housing assistance program in
California, Housing Choice Vouchers, provides significant
rental subsidies to low income Americans. Over 300,000
families in California -- most of which include children,
people with disabilities, and/or senior citizens -- receive a
Housing Choice Voucher to help make rent affordable. Families
with vouchers find housing in the private market and pay 30
[percent] of their income in rent. The federal government
pays the rest. The federal Department of Housing and Urban
Development (HUD) oversees the program, and vouchers are
administered locally by public housing authorities.
Source of income discrimination is illegal under the Fair
Employment and Housing Act, but the law has been interpreted
to exclude vouchers. Landlords' blanket refusal to consider
voucher holders frustrates the central aim of the Housing
Choice Voucher program and increases the harm and severity of
California's rental housing crisis. The inability of families
and veterans to use their housing vouchers perpetuates a cycle
of poverty and segregation. It also means that California may
be leaving unused federal funding on the table.
SB 1053 adds housing subsidy vouchers to the sources of income
protected by
California's Fair Employment and Housing Act. This bill would
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amend the definition of "source of income" to also include
federal, state, or local housing assistance or subsidies paid
either to the tenant or directly to the landlord on behalf of
the tenant. In so doing, the bill will provide low income
families, homeless veterans, and others with a Housing Choice
Voucher the same opportunity to apply for housing as other
Californians, tearing down unnecessary barriers that are often
based on misguided stereotypes. This bill ensures that
landlords cannot deny low-income families and veterans the
opportunity to apply for rentals or evict them based solely on
the fact that they receive a voucher. Landlords will still be
able to screen prospective tenants for credit, criminal
history, and other tenant suitability criteria.
2.Federal housing assistance programs
The U.S. Housing Act of 1937 authorizes housing assistance
payments "[f]or the purpose of aiding low-income families in
obtaining a decent place to live and of promoting economically
mixed housing." (42 U.S.C. Sec. 1437f(a).) The Housing Choice
Voucher program -- popularly known as "Section 8" -- offered
pursuant to the Housing Act is the federal government's "major
program for assisting very low-income families, the elderly, and
the disabled to afford decent, safe, and sanitary housing in the
private market." (See U.S. Department of Housing and Urban
Development, Housing Choice Vouchers Fact Sheet
[as of March 23,
2016].) Administered by the U.S. Department of Housing and
Urban Development in partnership with local public housing
agencies, this program allows individuals and families to
receive federal housing assistance in the form of a voucher that
can be used to acquire housing on the private market.
In order to use a voucher under the program, a participant must
find a suitable housing unit that meets certain minimum health
and safety standards and that is offered by a landlord willing
to participate in the program. Once initiated, the voucher
program's housing subsidy is paid directly to the landlord
through a local public housing agency, and the program
participant pays the difference between the rent charged by the
landlord and the amount subsidized by the housing agency.
Eligibility requirements to participate in the program are
generally set by local housing agencies, though certain federal
requirements govern program eligibility as well. In general, a
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participant's income may not exceed 50 percent of the median
income for the county or metropolitan area in which the
participant lives. The program requires participants to pay 30
percent of their monthly income toward rent and utilities, and
although it does not limit the amount of rent a landlord may
charge, it does limit how much participants can pay as a
percentage of their monthly income in certain circumstances.
3.Discrimination against housing assistance recipients
Despite the availability of housing assistance programs like the
federal Housing Choice Voucher program, some program
participants struggle to find landlords willing to accept
housing assistance payments in their communities and end up not
being able to take advantage of the benefits these programs
offer. Legal Aid of Marin, writing in support of SB 1053,
notes:
The Marin Housing Authority reported that it issued 274
housing vouchers in 2014, but 209 of these recipients -- most
of whom waited years to get a chance for decent and safe
housing -- lost vouchers because they expired before the
family could obtain housing.
Several groups in support of this bill argue that housing
assistance benefits go unclaimed because large numbers of
landlords choose not to participate in housing assistance
programs. The East Bay Community Law Center, for example,
writes:
In our experience, many tenants in the Bay Area are routinely
discriminated against and out-right refused housing by
landlords who refuse to accept housing subsidies.
. . .
Unfortunately, because such [subsidies] are not considered a
protected source of income under FEHA, landlords are free to
refuse to consider voucher holders as tenants. Such blanket
refusals, often based on misguided stereotypes, [frustrate]
the central aim of rental assistance programs and increases
the harm and severity of California's housing crisis.
This bill would prohibit landlords from refusing to provide
housing accommodations to recipients of federal, state, or local
public assistance and federal, state, or local housing subsidies
on the basis of their participation in such programs. Under
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this bill, landlords would remain free to reject tenancy
applications from program participants, provided they do so on
otherwise lawful grounds that are not based on a participant's
receipt of a housing subsidy. Landlords would also remain free
to charge rents as allowed under law, and would not be required
to reduce rents even if chosen rent levels would make a unit too
expensive for a voucher holder to afford. Further, landlords
would continue to be able to use appropriate financial and
income standards in making rental decisions, like verifying
income levels or checking creditworthiness. However, landlords
would no longer have the option to forgo participation in
housing subsidy programs, and would likely be required to
undertake certain administrative actions -- like submitting
units for health and safety inspections -- when providing
housing to a recipient of housing assistance.
4.Opposition concerns
A coalition of business and property associations oppose this
bill chiefly due to concerns over administrative and financial
burdens that property owners may have to endure. The California
Chamber of Commerce, for example, argues that SB 1053 would
significantly increase the administrative burden placed on both
rental property owners and housing agency staff should this bill
result in higher usage rates of housing assistance programs like
the federal Housing Choice Voucher program. The California
Chamber of Commerce also asserts that this bill would increase
the costs associated with renting residential property due to,
among other reasons, delays in having housing authorities
inspect rental units and assess rental rates before a tenant
using housing assistance can move in, higher insurance costs for
landlords who accept housing assistance tenants, and delays or
denials by housing authorities to landlord requests to raise
rental rates. In sum, the California Chamber of Commerce
writes:
Under current law, the Section 8 program is voluntary. We
agree that Section 8 vouchers play an important role in
helping low-income Californians find housing, and many of our
members participate in the program. However, because of the
significant number of challenges associated with the program,
a statewide mandate is not feasible for property owners or for
housing authorities.
In addition to concerns over increased fiscal and administrative
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burdens, several apartment associations argue that this bill
would interfere with property owners' freedom to contract and
would unreasonably interfere with private property rights.
The Apartment Association of Orange County, for example, asserts
that this bill would:
[deprive] property owners of use of their property, and may
constitute an unconstitutional taking. It requires an owner
to contract with the federal government [via a Housing
Assistance Payment Contract], become subject to federal laws
and regulations to which the owner would not otherwise be
subject, accept government-mandated lease terms, and
participate in burdensome regulatory compliance obligations.
Staff notes that while these concerns are not without merit,
several states have enacted source of income protections similar
to those proposed in SB 1053 apparently without suffering the
adverse effects articulated by opposition stakeholders. On this
point, the Housing Rights Center states:
While not yet protected under federal law, discrimination
against Section 8 voucher holders is prohibited by civil
rights laws in more than 13 states (as of 2013) and in many
local jurisdictions. As a matter of fact, in the District of
Columbia, housing discrimination based on a person's "source
of income" including Housing Choice Vouchers, has been
prohibited under the D.C. Human Rights Act (D.C. Code
2-1401.02 (29)) since 1977.
The Committee may wish to further enquire whether experience in
other jurisdictions with existing source of income protections
has yielded adverse consequences along the lines suggested by
opposition stakeholders.
5.Pending litigation
According to the author, the City of Santa Monica is currently
involved in litigation with the Apartment Association of Los
Angeles County and several named individuals concerning a city
ordinance that prohibits housing discrimination on the basis of
source of income, including rental assistance from federal,
state, local, or non-profit administered benefit or subsidy
programs. Among the issues being litigated by the parties is
whether the Fair Employment and Housing Act (FEHA) preempts this
type of local ordinance.
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In the past, this Committee has raised concerns about bills that
interfere with pending litigation. Any such interference could
result in a direct financial windfall to a private party,
prevent a court from deciding an action based upon the laws in
place at the time the cause of action accrued, or create a
situation where the legislative branch is used to circumvent the
discretion and independence of the judicial branch. This bill,
however, does not raise the concerns normally associated with
measures that could impact pending litigation. First, this bill
does not make any changes to FEHA regarding its preemptive
character. Under the California Constitution, "[a] county or
city may make and enforce within its limits all local, police,
sanitary, and other ordinances and regulations not in conflict
with general laws." (Cal. Const., art. XI, Sec. 7.) In
general, a conflict exists when a local ordinance (1) duplicates
a state statute, (2) contradicts a statute, or (3) enters an
area fully occupied by general law. (See Kirby v. County of
Fresno (2015) 242 Cal.App.4th 940, 954.) While this bill --
like many other bills passed by the Legislature -- might
ultimately duplicate or contradict a local ordinance, there is
no indication that the author seeks to alter the preemptive
character of FEHA generally, or its prohibition on source of
income discrimination specifically, through SB 1053. Second,
this bill is not intended to be retroactive and would not
compromise the independence of the judicial branch nor
circumvent its discretion to expound and interpret California
law in pending litigation concerning the City of Santa Monica's
ordinance.
6.Technical amendment
Among other things, SB 1252 (Corbett, Ch. 524, Stats. 2010) made
technical revisions to certain provisions of the Fair Employment
and Housing Act (FEHA) that declare source of income to be a
characteristic protected from housing discrimination. One of
the technical changes adopted in SB 1252 at the suggestion of
this Committee was to add a definition of the term "source of
income" to FEHA's general definitions provision, which appears
in Government Code Section 12927. SB 1053 would modify the
definition of "source of income" as it appears in the section of
FEHA specific to housing discrimination, but would leave
undisturbed the parallel definition that appears in FEHA's
general definitions provision. In order to maintain consistency
between these two definitions, the Committee may wish to
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consider amending the definition of "source of income" in
Government Code Section 12927 as follows.
Suggested amendment
Amend subdivision (i) in Government Code Section 12927 to
read: (i) "Source of income" means lawful, verifiable income
paid directly to a tenant or paid to a representative of a
tenant, or paid to a housing owner or landlord on behalf of a
tenant, including federal, state, or local public assistance
and federal, state, or local housing subsidies, including, but
not limited to, federal housing assistance vouchers under
Section 8 of the United States Housing Act of 1937 (42 U.S.C.
Sec. 1437f).
Support : Aids Legal Referral Panel; American Legion-Department
of California; AMVETS-Department of California; The Arc,
California; Association of Regional Center Agencies; Bet Tzedek
Legal Services; California Alliance for Retired Americans;
California Association of County Veteran Service Officers;
California Church IMPACT; California Public Interest Research
Group; California Rural Legal Assistance, Inc.; California State
Commanders Veterans Council; Central California Legal Services,
Inc.; Centro Legal de la Raza; City of Long Beach; Community
Housing Opportunities; Community Legal Services in East Palo
Alto; County Welfare Directors Association of California; East
Bay Community Law Center; EveryOne Home; Faith in Action Bay
Area; Housing California; Housing Equality Law Project; Housing
Leadership Council of San Mateo County; Housing Rights Center;
Inner City Law Center; Law Foundation of Silicon Valley; Legal
Aid Foundation of Los Angeles; Legal Aid of Marin; Legal
Services of Northern California; Mental Health Advocacy
Services, Inc.; Military Officers Association of America,
California Council of Chapters; National Association of Social
Workers, California Chapter; Neighborhood Legal Services of Los
Angeles County; Public Advocates; Public Counsel; Public
Interest Law Project; Public Law Center; Santa Monicans for
Renters' Rights; Sonoma County Community Development Commission;
United Cerebral Palsy California Collaboration; Urban Habitat;
VFW-Department of California; Villa Del Monte Senior Citizens'
Housing Community; Working Partnerships, USA; six individuals.
Opposition : Apartment Association, California Southern Cities;
Apartment Association of Orange County; Apartment Association of
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Greater Los Angeles; California Apartment Association;
California Association of Realtors; California Building Industry
Association; California Business Properties Association;
California Chamber of Commerce; East Bay Rental Housing
Association; San Diego County Apartment Association; Santa
Barbara Rental Property Association; North Valley Property
Owners Association; Western Manufactured Housing Communities
Association
HISTORY
Source : Non-Profit Housing Association of Northern California;
Western Center on Law and Poverty
Related Pending Legislation : None Known
Prior Legislation :
AB 447 (Maienschein, Ch. 432, Stats. 2015) prohibited real
property insurers from, among other things, failing or refusing
to accept an application, issue, or cancel a policy based on the
level or source of income of individuals residing or intending
to reside on the real property, or based on the receipt of
assistance, intended for housing, from the federal or state
government, or from a local public entity, by an individual or
group of individuals residing or intending to reside upon the
property, as specified. This bill also prohibited real property
insurers from requiring this information on an application for
insurance, as specified.
SB 1252 (Corbett, Ch. 524, Stats. 2010) made technical revisions
to several provisions of the Fair Employment and Housing Act,
including consistently listing "source of income" as a
characteristic that is protected from housing discrimination in
various sections of the act.
SB 1145 (Burton, Ch. 568, Stats. 2004), among other things,
removed the sunset date and thereby extended indefinitely a
provision adopted in SB 1098 (Burton, Ch. 590, Stats. 1999),
which prohibited discrimination under the Fair Employment and
Housing Act on the basis of a person's source of income, as
specified.
SB 1098 (Burton, Ch. 590, Stats. 1999) prohibited, until January
1, 2005, discrimination under the Fair Employment and Housing
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Act on the basis of a person's source of income, the failure to
account for the aggregate income of co-residents, or the failure
to exclude a government rent subsidy from that portion of the
rent to be paid by the tenant in assessing his or her
eligibility for rental housing.
AB 3165 (Fenton, Ch. 992, Stats. 1980) See Background.
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