If you own or manage rental property, you know that complying with fair housing laws is critical to avoiding liability.  Over the years, we have found that many AZREIA members incorrectly believe that fair housing laws do not apply to them.  Whether or not a property owner falls under an exception or not, we always tell clients to comply with fair housing laws.  It’s the right thing to do and it’s the law.

 

On a federal and state level, there are seven protected classes: race, color, national origin, religion, sex (which includes sexual orientation and gender identity), familial status and disability.  Most cities in Arizona are not allowed to add additional protected classes, but certain places, such as Phoenix and Tucson, can add additional protected classes which changes the landscape of managing and owning properties.

 

Tucson mayor and city council are contemplating making “source of income” a protected class for purposes of fair housing laws and requiring landlords to “ban the box.”  This is critical for Tucson property owners to be aware of.

 

SOURCE OF INCOME

 

If Tucson passes source of income as a protected class, it will require landlords to accept Section 8 and other subsidized programs.  The Section 8 program would no longer be voluntary, and all property owners would have to participate in the program, even though there are additional administrative burdens and potential issues with participation.

 

It’s important to note that the problems referenced herein are not a critique on Section 8 in its entirety – rather, the concerns are focused on making Section 8 mandatory.  I have heard from many owners and managers that participate in Section 8 that they have had great experiences with the program – they get the rent monthly and the residents want to stay for several years.  This ensures that the owner has a steady stream of income.  However, I have also heard of the pitfalls of the program where governments have a significant backlog before they are able to pay rent, residents causing problems and residents causing significant damage that the landlord is unable to recoup.

 

It doesn’t matter which story is true (or if they are both true), what is important is that an owner’s property rights should dictate that a property owner gets to chose whether or not to participate in the program.  There are benefits and drawbacks to subsidized rent programs, and each individual property owner should get to decide how to balance those benefits and drawbacks.  However, if “source of income” becomes a protected class, such property rights will be eviscerated.

 

“BAN THE BOX”

 

Tucson mayor and city council also are contemplating a “ban the box” requirement.  While the details are not clarified by Tucson employees yet, the general idea of this is that owners would not be able to ask about criminal background of potential residents until after they have passed other application standards.  In other words, a person would not be banned from renting a property initially, solely because of having a criminal conviction.  As noted above, the details of the program have yet to be released.

 

For AZREIA members, either of these programs could have a significant impact on their rental business.  Owners would need to change their application standards and handle the additional administrative requirements applicable to participation in subsidized programs.

 

If you, as the reader, feel strongly about this issue, feel free to reach out to Tucson mayor’s office or city council.  The only way that such programs will be voted down, is if our government officials hear from individuals who own properties.  Also, don’t ignore this if you don’t own properties in Tucson – what starts in Tucson will be closely watched by the rest of the state.

by Mark Zinman, Zona Law Group