Iowa is making it harder to be a low-income renter
Updated: Jun 18, 2021
The state has passed a law allowing landlords to engage in the last (mostly) legal form of housing discrimination.
It’s a familiar refrain to low-income renters searching for a place to live. The four-word phrase signals one of the last (mostly) legal forms of overt housing discrimination. Commonly referred to as “source-of-income discrimination,” landlords across the nation often refuse to accept tenants who attempt to pay rent with help from the federal government’s Section 8 housing voucher program.
Now, Iowa Gov. Kim Reynolds (R) has put the nearly 40,000 Section 8 recipients in her state in jeopardy of getting those notices by signing a new law that ensures cities and counties can no longer protect their residents from this subtle form of discrimination.
Section 8 housing is the government’s largest low-income rental assistance program. According to the Center on Budget and Policy Priorities, 5.2 million people nationwide receive vouchers from the program that cover some portion of their rent. The program is chronically underfunded, so only 1 in 5 households that are eligible to receive assistance actually do, the Urban Institute has found.
For the lucky few who do make the cut, it’s not a one-way ticket to a home. Recipients have to go and find a place that fits the program’s requirements, and it’s at this point that source-of-income discrimination comes into effect.
According to the National Multifamily Housing Council, this type of housing discrimination remains legal in the majority of the nation, although some states and localities have begun to fight it. On Friday, Reynolds and the Republican-controlled Iowa legislature enacted a bill that will have the state join Texas and Indiana in barring localities from enacting laws that stop landlords from discriminating against Section 8 renters. So not only will the state refuse to protect very low-income renters from this type of discrimination, but it won’t let localities enact protections either.
According to the Des Moines Register, three cities — Des Moines, Iowa City, and Marion — currently have anti-source-of-income discrimination laws on the books, and these cities have until 2023 to adjust to the new law.
This is part of a trend of Republican states preempting laws made by their more liberal cities from being enacted or enforced. In Tennessee, legislators barred localities from enacting certain housing reforms, a law widely seen as targeting the more liberal Nashville laws. In Montana, legislators are attempting to do the same to invalidate the city of Billings’s laws. And in Indiana, some legislators have waged a protracted battle against bus rapid transit in Indianapolis.
Iowa’s move will likely make it even harder for Section 8 recipients to find housing, and it could be opening the door to discrimination based on race, disability, and familial status.
Section 8 vouchers are effective — if renters can find places to use them There’s a lot of evidence that Section 8 vouchers reduce homelessness and alleviate poverty.
In her reporting for Vox, Stephanie Wykstra highlighted studies showing that “housing vouchers help prevent homelessness and increase long-term health and economic outcomes of children in low-income families.” And Vox’s Dylan Matthews covered a fascinating study that showed how (with help) some housing voucher recipients were able to find housing in high-opportunity neighborhoods, where children have significantly better chances at a prosperous future.
Hendren estimates that the lifetime benefit to a newborn child of moving from a low- to high-opportunity neighborhood is about $210,000 in additional income, or an 8.1 percent increase in lifetime earnings.
In 2018, the Urban Institute did a pilot study with the Department of Housing and Urban Development looking into how widespread source-of-income discrimination is, and found that “landlords often refuse to rent to Housing Choice Voucher (HCV) holders.” Denial rates ranged wildly in the cities they studied: Fort Worth, Texas (78 percent); Los Angeles (76 percent); Newark, New Jersey (31 percent); Philadelphia (67 percent); and Washington, DC (15 percent). Importantly, the researchers also discovered that landlords were the most likely to discriminate in wealthier areas, which has the effect of concentrating poverty and forcing voucher recipients to live in less desirable neighborhoods with worse outcomes for children.
Of the five cities they studied, Newark, Washington, and Philadelphia all had source-of-income discrimination laws.
But source-of-income discrimination laws are only as good as their enforcement. Even in Washington, where the researchers found the least amount of discrimination, the Equal Rights Center still found 130 advertisements that stated “no vouchers accepted” or “no Section 8” (essentially writing out “we are doing crimes here”), indicating that some landlords are either unaware of the law or are confident that they will get away with breaking it.
The murky constitutionality of source-of-income discrimination On its face, source-of-income discrimination is not explicitly banned by the Fair Housing Act, which names race, color, national origin, sex, religion, disability, and familial status as protected groups. However, some fair housing lawyers argue that discriminating against voucher recipients has a disparate impact on protected groups that disproportionately make up the program, such as families with children, Black Americans, and people with disabilities — thereby making source-of-income discrimination unconstitutional.
In March 2020, the Supreme Court declined to consider a case that would have required landlords to accept Section 8 vouchers. The plaintiff, a fair housing nonprofit in Texas, sued four entities on the grounds that their refusal to accept these vouchers disproportionately harmed Black would-be renters.
Martha Galvez, one of the authors of the Urban Institute study, explained why landlords are discriminating: “There’s a lot of reasons why landlords don’t want to accept vouchers. Some have to do with stereotypes about families that have vouchers and some parts of it have to do with landlords’ experiences with housing authorities and dealing with the government as a partner in your lease.”
There is evidence that landlords have valid (nondiscriminatory) reasons for not wanting to participate in Section 8 housing — working with the government to make sure your property fits the requirements can be onerous and frustrating. Landlords may have difficulty getting rents paid on time by the local public housing authority and often the unit inspections can be an inefficient and arduous process.
This is the argument that landlords in Iowa used to garner support. According to the Iowa Capital Dispatch, state Rep. David Deyoe, the floor manager for the bill Reynolds just signed, argued, “We have some landlords that just simply would rather not have to get involved with the extra paperwork or inspections or changes to their apartments or whatever else might come around because of (accepting federal vouchers).”
But there’s also anecdotal evidence that landlords may be using source-of-income discrimination as a cover for other illegal forms of discrimination.
Sharita, a Section 8 voucher recipient who lives in Memphis, Tennessee, with her six children, told me earlier this year that she’s experienced frequent discrimination. Landlords and property managers have told her to “stop having kids,” made racist comments like “I hope your baby daddy’s not a thug,” and insinuated that she could be connected to a gang. She also says that the public housing authority’s rules were confusing and difficult to comply with, inside the short window she was given to find housing before the voucher expired.
“It just seems like there’s discrimination against Section 8. It hurts. I was not able to sleep. I couldn’t eat, crying every day, and I was constantly calling, calling, calling, and it was so hard,” Sharita said. “I felt like I had to settle because I didn’t have any options. And Section 8 [public housing authority] didn’t help me at all.”
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