In a recent decision, the Appellate Division, Third Department, affirmed the unconstitutionality of Executive Law § 296(5)(a)(1), which prohibits housing discrimination based on individuals’ lawful source of income.

The Core Issue
This case is about a conflict between New York State’s housing laws and the constitutional rights of property owners. Under New York law, landlords are prohibited from discriminating against potential tenants based on their “source of income.” This effectively means landlords are legally required to accept tenants who use federal Section 8 housing vouchers to pay their rent.

The Conflict
The New York Attorney General sued landlords for refusing to rent apartments to individuals using Section 8 vouchers.

The landlords argued that the state law is unconstitutional. Their reasoning was that to accept Section 8 vouchers, the federal program requires landlords to sign a HAP (housing assistance payment) contract, in which landlords must agree to provide “full and free access” to the apartment, the premises, and all relevant accounts and records. The landlords argued that forcing them to accept Section 8 essentially forces them to give up their Fourth Amendment constitutional right against unreasonable government searches.

The Court’s Decision
The Appellate Court sided with the landlords. Although the Court acknowledged that the Section 8 program is an essential tool for providing affordable housing, the Court ruled that the State cannot legally compel landlords to participate in a program that requires them to surrender their Fourth Amendment rights.  Because the HAP contracts demand “full and free access” to properties and records without requiring the government to get a warrant or the landlord’s voluntary consent, the Court found the scheme unconstitutional.

The Bottom Line
The Court struck down Executive Law § 296(5)(a)(1). Although the Court deemed this state law to be unconstitutional, the Attorney General’s Office filed a notice of appeal, signaling that this case is likely to be heard by the Court of Appeals. Additionally, various local laws remain in effect that still prohibit source of income discrimination. Landlords should continue to monitor these outcomes and should contact us if they have any questions regarding compliance.

For more information or for guidance, contact Richard DeMaio.