Understanding the “Source of Income” in Fair Housing

The landscape of fair housing has been continuously evolving. One of the emerging focal points is the protection against discrimination based on the “Source of Income.” While not federally recognized under the Fair Housing Act, this classification has steadily gained traction at state and local levels, expanding the purview of housing rights.

Defining “Source of Income”

In the realm of housing discrimination, the “Source of Income” pertains to the origin of a resident’s lawful earnings or funds. This can include earnings from employment, pensions, or other regular payments, but notably, it frequently involves rental assistance programs or housing subsidies such as Section 8.

Although it’s not yet a federal mandate, many state and local housing laws and ordinances have recognized and added it as a protected category.

Implications for Property Managers and Landlords

For those managing federally assisted housing programs, such as 202, 811, or tax credit properties, it’s often mandatory to consider housing subsidies as a valid source of income. This means refusing a tenant on the grounds of them receiving rental aid can have legal repercussions.

However, if a property doesn’t fall under these categories, it’s paramount to delve into local city or county regulations. A deep understanding of local ordinances is essential to ascertain whether “Source of Income” is protected in your jurisdiction.

---

Need a Lease Agreement?

A FREE account with EZ Landlord Forms gets you access to over 200 free forms. Upgrade to a paid account (monthly, annually, or lifetime)

EZLandlord Forms Is Offering 15% 𝙊𝙛𝙛 For New Customers who want to upgrade their account!

We cannot recommend these guys enough!

👉 State Specific Leases 👉 400 Forms to make your landlord-tenant relationship top notch 👉 200 FREE forms for those not ready to purchase 👉 4.8 Rating with over 5000 Reviews 👉 Pro Members get access to ALL leases and forms for $12 per month OR $75 if you purchase the annual membership 👉 YOU CAN BUY LIFETIME FORMS for $399

USE CODE 𝐒𝐓𝐀𝐂𝐈𝐄𝟏𝟓 to get 15% OFF ALL first-time purchases, EVEN THE LIFETIME FORMS!

---

Resident Income Screening in the Context of “Source of Income”

When screening potential residents, many property managers and landlords have set income criteria that applicants must meet. When “Source of Income” is protected, this screening process requires nuanced handling. The focus should primarily be on the tenant-paid portion of the rent. Managers need to:

• Ascertain the amount of rental assistance the applicant receives.
• Determine the gap between the assistance and the market rent of the property.

Upon obtaining these numbers, they can be juxtaposed against the property’s income standards to ascertain eligibility.

The Rise of “Source of Income” as a Protected Class

Recent years have witnessed a surge in advocacy for “Source of Income” protection. Various legislative initiatives have been proposed to elevate its status at the federal level. This momentum is largely attributed to the pressing challenges of housing affordability and accessibility. Incorporating “Source of Income” as a protected category can alleviate these challenges, enabling a broader segment of the population to improve their housing conditions.

In Conclusion

The intricacies of housing laws go beyond federal mandates. For property management professionals, staying updated with state and local ordinances, along with training, is as crucial as understanding federal regulations. The categorization and acceptance of various income sources can profoundly impact resident selection and rental operations, underlining the importance of comprehensive knowledge in this domain.

Thank you to The Fair Housing Institute for providing this informative article! Our readers get 15% off any Fair Housing course by using our special code: YLR2023

Did you enjoy this article?

This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.

Subscribers get access to our free forms, email templates, and guides! As well as…

▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links

Click Below to View a Sample Newsletter👇