The Fair Housing Act

The Fair Housing Act is the primary federal law that prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions. As a landlord participating in a federally funded program like Section 8, you are bound by this Act. Your HAP contract is a direct agreement to uphold these principles.

The law protects individuals from discrimination based on seven protected classes.

The Seven Protected Classes

1. Race: You cannot make any housing decision based on a person’s race. This is the original, core protection of the Civil Rights movement.
2. Color: This is related to race but can be distinct. It refers to discrimination based on the shade of a person’s skin.
3. Religion: You cannot treat applicants or tenants differently because of their religious beliefs or practices. This includes refusing to rent to someone of a certain faith or making intrusive inquiries about their religion.
4. National Origin: This prohibits discrimination based on the country where a person or their ancestors came from. It also covers discrimination based on a person’s accent or ethnicity, even if they are a U.S. citizen.
5. Sex: This prohibits discrimination based on gender. According to HUD, this protection also extends to discrimination based on gender identity and sexual orientation.
6. Familial Status: This is a crucial protection for investors to understand. It protects families with children under the age of 18, pregnant women, and people in the process of securing legal custody of a child. You cannot have a “no kids” policy or steer families to certain “family-friendly” buildings or floors.
7. Disability: This protects individuals with a physical or mental impairment that substantially limits one or more major life activities. This is one of the most complex areas of Fair Housing, with specific rules about accommodations and modifications.

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What is Housing Discrimination?

Discrimination isn’t always overt or intentional. Many violations occur because of policies that, while seemingly neutral, have a disproportionately negative effect on a protected class. As a landlord, you are responsible for ensuring your actions and policies are fair.

According to the Fair Housing guidebook, prohibited actions include, but are not limited to:

• Refusing to Rent or Negotiate: Outright refusing to rent to someone because they are a member of a protected class.
• Providing False Information: Lying about the availability of a unit by telling a prospective tenant it has been rented when it has not.
• Setting Different Terms or Conditions: Offering a one-year lease to one applicant but requiring a two-year lease from another based on a protected characteristic. Another example is charging a higher security deposit for a family with children.
• Discriminatory Advertising: Using language in rental ads that indicates a preference or limitation. This includes phrases like “No Kids,” “Christian Home,” or “Perfect for a Single Professional.” Instead, focus on describing the property itself.
• Steering: Discouraging a potential tenant from renting in a certain building or neighborhood. For example, telling a minority family they would be “more comfortable” in a different part of town.
• Harassment or Intimidation: This can include creating a hostile environment through offensive comments or engaging in “quid pro quo” harassment (e.g., demanding sexual favors in exchange for housing).

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Your Duty as an Investor

Your responsibility under the Fair Housing Act is affirmative, meaning you must actively ensure your practices are non-discriminatory. It is not enough to simply react to a complaint.

• Create Clear, Written Policies: Establish standard rental criteria (income, credit, rental history) and apply them consistently to every single applicant.
• Keep Meticulous Records: Document your interactions with all prospective tenants. If you deny an applicant, your records should clearly show that the denial was based on your objective criteria, not a protected characteristic.
• Focus on the Property, Not the Person: When marketing your unit, describe its features: square footage, number of bedrooms, amenities, and location. Avoid describing the type of person you think would be a good fit.
• Train Your Staff: If you employ a property manager or leasing agent, they are your representatives. Ensure they are thoroughly trained on fair housing laws. Their actions are your legal responsibility.