Source-of-Income Discrimination

What Is Source-of-Income Discrimination?

Source-of-income discrimination happens when a landlord rejects an applicant, or sets different terms, because of where the rent money comes from rather than whether the applicant can pay it. The most common target is the federal Housing Choice Voucher, often still called Section 8. Other lawful sources can include Social Security, disability benefits, veterans’ benefits, alimony, and child support.

The federal Fair Housing Act protects against discrimination based on race, color, religion, sex, disability, familial status, and national origin. Source of income is not on that list. Protection therefore depends on state and local law.

How Source-of-Income Protections Work

Where a source-of-income law covers vouchers, a landlord cannot advertise “no Section 8,” refuse to accept a voucher, or treat voucher holders worse than other applicants. Laws differ widely. PRRAC notes that Wisconsin’s law does not apply to housing vouchers, and that court rulings have weakened coverage in Maine and Minnesota. Laws can also allow ordinary screening. Delaware’s, for example, lets landlords consider income and credit if the standards are applied “without regard to source of income.”

Delaware illustrates how these laws change. The state added source of income to its fair housing law in 2016 but exempted landlords who chose not to take part in voucher programs. A 2024 law, Senate Substitute 1 for Senate Bill 293, repeals that exemption. It applies from the later of two dates: January 1, 2026, or the date the Delaware State Housing Authority publishes notice that the state’s housing authorities have streamlined their voucher procedures. A landlord may still deny an application if a housing authority does not follow the standard processing steps. The law expires on December 31, 2028, unless the legislature extends it.

A few federal programs carry their own rule. Under Section 42 of the Internal Revenue Code, a Low-Income Housing Tax Credit property’s long-term use agreement must prohibit refusing to lease to a voucher holder because of that status. PRRAC lists similar requirements for HOME and National Housing Trust Fund properties.

Criticisms and Limitations

Landlords who oppose mandates often point to voucher paperwork, required inspections, payment delays, and rent caps tied to the local payment standard. Supporters reply that blanket refusals shut voucher holders out of whole neighborhoods and can leave a family unable to use its voucher before the search period runs out.

Research suggests refusals are common. In a 2018 paired-testing pilot study for HUD, Urban Institute researchers found that landlords often refused to rent to voucher holders. Denial rates varied across the five study sites. The authors said the differences may reflect source-of-income laws, housing market conditions, and payment standards. A 2011 study for HUD by Lance Freeman found higher voucher utilization rates at housing authorities in jurisdictions with such laws. Enforcement usually depends on a tenant filing a complaint with a state or local agency or in court.