Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered a substitute for professional legal advice.
California's housing affordability crisis continues to be a hot topic, leading to new legislation aimed at addressing issues such as limited housing availability. Senate Bill 329 (SB 329) went into effect on January 1st, 2020, and has significant implications for California landlords. The primary purpose of this legislation is to prohibit landlords from discriminating against tenants based on their use of housing assistance, including Section 8 vouchers or other rental subsidies.
What is SB 329?
SB 329 amends the California Fair Employment and Housing Act (FEHA) by adding "source of income" as a protected class. Landlords are legally required to consider and accept housing vouchers as a legitimate form of rental payment. This means landlords cannot refuse to rent to tenants solely because they use housing assistance, which now explicitly includes federal, state, or local housing subsidies like Section 8 Housing Choice Vouchers.
Are California Landlords Required to Accept Section 8 Housing Vouchers?
Yes. Prior to SB 329, California landlords could legally decline tenant applicants who relied on government housing vouchers to pay their rent. With this bill, landlords in California can no longer implement blanket policies that deny housing based on an individual's participation in voucher programs.
Impacts of SB 329 on Smaller Landlords
While SB 329 aims to promote fair housing practices and increase access to affordable housing, it also presents challenges for small landlords, particularly those operating on a limited budget or managing a small number of rental units.
Administrative Complexity: For small landlords, accepting housing vouchers may involve additional administrative burdens and costs. This could include ensuring compliance with program requirements, processing paperwork, and coordinating with housing authorities.
Forced Terms: The Section 8 program, in particular, requires that Landlords sign a separate contract with the housing authority that supersedes the lease terms. As you can probably guess, these terms are not favorable to landlords.
Delayed Payments: The government pays slowly, impacting cash flow for small landlords, especially when the delay occurs immediately after an expensive vacancy and turnover period.
Additional Vacancy: The time it takes between approving a tenant receiving housing assistance and move-in is much longer than with a market rate tenant. This can be a substantial and unexpected cost.
Mandatory Inspections: Voucher programs require mandatory property inspections. While these inspections ensure housing quality, they can create additional scheduling requirements for landlords. Additionally, it’s well-known that inspectors require landlords to complete unnecessary repairs or assign financial responsibility for repairs to the landlord, even though the issue is caused by tenant damage.
Benefits of Participating in Housing Voucher Programs
Despite the challenges, there are some potential benefits to accepting tenants with housing vouchers:
Reliable Rent Payments: Housing authorities often guarantee a large portion of the tenant's rent, offering a greater degree of cash flow security.
Expanded Tenant Pool: Opening your properties to those with housing assistance broadens your applicant pool.
Positive Social Impact: Participating in housing voucher programs contributes to addressing the affordable housing crisis and providing stability to those in need.
Ensuring Compliance: Key Points for Landlords
Educate Yourself: Stay informed about SB 329 and familiarize yourself with its provisions to understand your rights and responsibilities as a landlord.
Update Policies and Procedures: Ensure your rental policies, rental applications, application screening criteria, and vacancy marketing materials are compliant and do not include any discriminatory language pertaining to source of income.
Fair Screening Practices: Continue to use consistent, unbiased screening criteria for all applicants, focusing on factors such as credit history, income verification (including subsidies), and rental history. NOTE: Effective January 1, 2024, SB 267 limits a landlord's ability to run credit checks on applicants who utilize housing subsidies.
SB 329 aims to create a more equitable rental market in California. You can navigate these changes by staying informed, ensuring compliance, and adapting your practices.
California’s legal landscape continues to reshape the relationship between landlord and tenant. As the business environment becomes more complex, professional representation becomes of greater importance. Advantage Property Management Services understands the challenges that small mom-and-pop Landlords face when new laws like this are passed. We help Landlords grow their wealth without the work. Feel free to contact us to discuss your rental real estate needs.
View the text of SB329 here.
