If section 8 isn’t income . . .

Then how is it that SB107/Wisconsin Act 108 which restricts the city and county from having ordinances prohibiting landlords use of monthly household income purportedly negates our section 8 ordinances at the city and county level?

I started typing this up for my staff and volunteers and figured it might as well be a blog post, because I’m going to have to explain this one over and over and over again because it makes no sense.

SECTION 8 IS NOT INCOME
Wisconsin prohibits landlord from discriminating based on a legal source of income, as does Dane County and Madison. In 1995 a case was heard where it was alleged that the landlord was discriminating based on income because they would not accept a Section 8 voucher. The federal courts in the case determined Section 8 is not income because it is not money that a tenant can spend, but rather a payment for one purpose that goes directly to a third party. Knapp v Eagle Property Management makes that clear.

Third, Knapp alleged discrimination in housing on the basis of “lawful source of income,” in violation of Wis.Stat. Sec. 101.22(6). The district court granted summary judgment for defendants on this claim, holding that a section 8 voucher did not constitute income. The court noted that a contrary determination would make the section 8 program mandatory for Wisconsin landlords, a position it rejected in the absence of clearer direction from the state legislature or courts.

This case is the entire reason that we pursued ordinances at the city and county level. If section 8 wasn’t a source of income, the landlords could discriminate against people who recieved section 8 vouchers.

WISCONSIN ACTION 108/SB107

Section 1. 66.0104 of the statutes is created to read:

66.0104 Prohibiting ordinances that place certain limits or requirements on a landlord. (1) In this section:
(a) “Premises” has the meaning given in s. 704.01 (3).
(b) “Rental agreement” has the meaning given in s. 704.01 (3m).
(c) “Tenancy” has the meaning given in s. 704.01 (4).

(2) (a) No city, village, town, or county may enact an ordinance that places any of the following limitations on a residential landlord:

1. Prohibits a landlord from, or places limitations on a landlord with respect to, obtaining and using or attempting to obtain and use any of the following information with respect to a tenant or prospective tenant:
a. Monthly household income.
b. Occupation.
c. Rental history.
d. Credit information.
e. Court records, including arrest and conviction records, to which there is public access.
f. Social security number or other proof of identity.

2. Limits how far back in time a prospective tenant’s credit information, conviction record, or previous housing may be taken into account by a landlord.

3. Prohibits a landlord from, or places limitations on a landlord with respect to, entering into a rental agreement for a premises with a prospective tenant during the tenancy of the current tenant of the premises.

4. Prohibits a landlord from, or places limitations on a landlord with respect to, showing a premises to a prospective tenant during the tenancy of the current tenant of the premises.

(b) No city, village, town, or county may enact an ordinance that places requirements on a residential landlord with respect to security deposits or earnest money or pretenancy or posttenancy inspections that are additional to the requirements under administrative rules related to residential rental practices.

(3) If a city, village, town, or county has in effect on the effective date of this subsection …. [LRB inserts date], an ordinance that is inconsistent with sub. (2), the ordinance does not apply and may not be enforced.

Seems clear cut, right? If section 8 isn’t income, SB107 doesn’t affect the ordinances.

COUNTY ATTORNEY DISAGREES
I never heard how Marcia MacKenzie came up with her decision on this. But this is what the counties ordinances say, after the Corporation Counsel for the county botching it twice.

(4) Discriminate and discrimination mean to segregate, separate, exclude or treat any person or class of persons unequally because of race, gender, age, religion, color, national origin, ancestry, marital status, domestic partnership status, family status, mental illness, physical condition, appearance, lawful source of income, including receipt of rental assistance under 24 Code of Federal Regulations Subtitle B, Chapter VIII [the “Section 8” housing program], student status, arrest or conviction record, sexual orientation, military discharge status, political eliefs, status as a victim of domestic abuse as defined in sec. 813.12(1)(am), Wis. Stats., failure to disclose Social Security Number, and association with or formation of a tenant union in apartments or mobile home parks or communities.

I recall noting this at the time, but the feeling being that it wasn’t worth arguing with the attorneys about it, that they were insisting it be drafted this way. I was worried about calling it income because of the court case that caused us to pass the ordinances in the first place.

CITY ATTORNEY DISAGREES
This is from an informal memo from the city attorney.

Sec. 39.03(4), MGO, the Equal Opportunities Ordinance, prohibits discrimination in housing, including rental, on the basis of protected classes. Among the protected classes in the City’s ordinance is “source of income”, defined to include “moneys received from public assistance (including rental assistance under … the ‘Section 8 housing’ program) ….” Sec. 39.03 (2)(ii) and (ll), MGO.

The City’s ordinance is (with one critical difference) modeled on the State’s Open Housing Law, Wis. Stat. sec. 106.50. That law also prohibits discrimination based on “source of income.” However, both the State’s regulations and case law make it clear that section 8 housing vouchers are not “income” under the state law. See, Knapp v. Eagle Property Management Corp., 54 F. 3d 1272 (7th Cir. 1995), where the Seventh Circuit Court of Appeals rejected a claim that vouchers constituted “income” under the state law, in part because such a claim would turn the voluntary section 8 program into a mandatory one (i.e., no landlord could refuse to participate because it would be discrimination).

(ii) Source of income includes, but shall not be limited to, moneys received from public assistance (including rental assistance under Title 24 Code of Federal Regulations Subtitle B, Chapter VII, commonly known as the “Section 8 housing” program), pension, and Supplementary Security Income (SSI). Source of income shall be limited to legally derived income.

WHAT HAPPENED?
I don’t really know, this has been going on for so long, and there were so many attempts to pass it that it is all a huge blur at the moment. I have two plastic totes full of notes that I could probably use to reconstruct what happened, but I don’t know that it is worth it. I know the city failed to pass the ordinance several times, the county did too but eventually passed it and then when the city was already covered by the county law, they passed a city law, then when the county law got screwed up a few times, the law was only in effect in the city – but now, it looks like it will need to be re-written and re-passed yet again.

This is a little ironic given the discussion the council members had on Saturday about how you needed city staff to be on board with your proposal in order for it to work, and that sometimes even when you passed something, it wouldn’t get implemented. In the case of the city attorney’s office, poor drafting when they aren’t on board with something is also a huge risk and arguing with them is usually pointless. And then, you end up with things like this useless ordinance that didn’t do what it was supposed to because of the way they drafted it.

It does seem if the whole point of the ordinance was that Section 8 is not income, passing an ordinance that says it is income is a little goofy. I know I brought it up at the time. And I know at the county I was told to just take it cuz they had the votes and if they messed with it, it might confuse people. I should have followed my gut and insisted.

HOW DO WE FIX IT?
Somebody just needs to fix the technicality and at the county they can just delete the bolded word below:

(4) Discriminate and discrimination mean to segregate, separate, exclude or treat any person or class of persons unequally because of race, gender, age, religion, color, national origin, ancestry, marital status, domestic partnership status, family status, mental illness, physical condition, appearance, lawful source of income, including receipt of rental assistance under 24 Code of Federal Regulations Subtitle B, Chapter VIII [the “Section 8” housing program], student status, arrest or conviction record, sexual orientation, military discharge status, political eliefs, status as a victim of domestic abuse as defined in sec. 813.12(1)(am), Wis. Stats., failure to disclose Social Security Number, and association with or formation of a tenant union in apartments or mobile home parks or communities.

At the city level, they need to make Section 8 its own protected class and not include it in the definition of “source of income”.

Since section 8 isn’t income, the state law doesn’t pre-empt us from the passing the law, the only thing stopping it from being in effect is our own lawyering at the city and county.

In fact, if they wanted, I think the lawyers could make the argument that the section 8 ordinance is still in effect, I just don’t think they want to. I know I can make the argument based on legislative history and that I will and I suggest that tenants make the same argument. I suspect there are several lawyers who will be descending upon their offices to make arguments to the contrary, but we might as well fix the ordinance so the attorney’s can’t defeat us – at least until they come up with some new reasoning to defeat the policy being passed as it was intended.