Lexington Trying to Force Housing Providers to Participate in Section 8 Program

If you are a landlord in Lexington, I have bad news, and I mean very bad news. On October 10 at 1:00 p.m. Charlie Lanter, LFUCG’s Housing Commissioner, will be making a presentation about Source of Income Discrimination to the LFUCG Social Services & Public Safety Committee meeting. They already have a draft of an ordinance, and my guess is that they are looking to move this train down the tracks quickly. 

Source of Income Discrimination?? What does that even mean? Well, there’s a technical legal answer to that question and there’s a practical answer. We’ll start with the technical legal answer. It means that you cannot refuse to rent to someone based on their “source of income” – based on where their rent payment comes from. 

So right off the bat, you should notice a disconnect between the name of the concept and the reality of the concept. The proponents of this ordinance know that people are conditioned to be against any kind of “discrimination”. In our society, no one wants to be thought of as “discriminatory”.

So, the proponents try to throw all of their ideas under the umbrella of discrimination. That’s how they frame their issues. If you oppose us, you’re guilty of “discrimination”. Don’t fall for it. 

Continuing with my technical answer, the ordinance would require you to accept the following sources of payment:

income derived from wages, salaries, or other compensation for employment, court-ordered payments, income derived from social security, grants, pensions, or any form of federal, state, or local public assistance and/or housing assistance, including section 8 vouchers, and any other forms of lawful income. 

So right there at the end of the technical answer, you get the practical answer to the question of “What is Source of Income Discrimination?”. The practical answer is that you will be required by law to participate in the Section 8 Program.

That’s right. If you have an applicant with a Section 8 voucher who applies at your property and, other than the Section 8 issue, meets your Tenant Selection Criteria, you MUST accept them as a tenant and lease to them. And you must comply with the requirements of the Section 8 Program to do so. 

But what does the Section 8 Program entail? Here’s the process:

1. The landlord must complete a Request for Tenancy Approval (RTA) form and send a copy of their lease to the Lexington-Fayette Urban County Housing Authority.

2. The landlord must then complete a second form that describes the unit and its condition, and list all the amenities of the unit.

3. An inspector must schedule and complete an inspection of the rental unit, along with an eight-page Inspection Report, to ensure that it meets the quality standards established by the Housing Authority (“the initial inspection”).

4. No lease may be signed until the unit is inspected and the inspector completes a form that verifies that the unit meets the quality standards.

5. If the unit does not meet quality standards, the Housing Authority notifies the landlord in writing, and the landlord must make the necessary repairs. Inspectors believe they can always find something to disqualify the property if they look hard enough.

6. Once those repairs are completed, the landlord must notify the Housing Authority in writing and request another inspection.

7. The landlord’s lease and rental amount must be deemed acceptable to the Housing Authority. Yes, the Housing Authority has veto power over (a) the amount of rent you may charge and (b) the terms of your lease.

8. The Housing Authority must complete its internal paperwork and notify the landlord of its approval to enter into a lease agreement with the tenant. 

9. The landlord must sign a Housing Assistance Program (HAP) Contract with the Housing Authority. 

10. At least 90 days before the lease ends, the landlord must schedule another inspection by the Housing Authority (“the annual inspection”). If repairs are needed, they must be made by the landlord or the HAP terminates and, presumably, the lease cannot be renewed.

So, even if this process went as smoothly as it could possibly go, there’s going to be a delay in renting your properties. But this is bureaucracy that we’re talking about – so it’s not going to go smoothly. Here are the snags that you’ll deal with that will delay the process:

• It can take days or weeks just to schedule the inspection and a longer time to get the first inspection completed.
• it’s nearly impossible to know what will cause the inspectors to fail the unit.
• inspectors often fail units over silly things (for example, no address numbers on the BACK door of a property).
• subsequent inspections often fail over issues that were not mentioned during the previous inspections.

That’s the process. Sound fun? You are now required by law to contract with the government. Welcome to Hell.

There’s a reason that a 2017 study found that nearly 70% of the landlords who refuse to participate in the Section 8 Program were previous participants. They gave it a try but said “no thanks” once they experienced the problems with it. 

All of you folks who have done it in the past know what I’m talking about. And all you folks who have avoided it by putting “We don’t take Section 8” in your ads, life is about to change dramatically. Unless you take some serious action. Quickly. 

If you refuse, you will be charged with housing discrimination and the Lexington Human Rights Commission will first investigate and decide that you’ve violated the ordinance, then they will have their contracted attorney to sue you in Fayette Circuit Court seeking damages, a civil penalty of $10,000.00-$50,000.00, punitive damages, and attorney’s fees. 

So, action is needed. Here are the action steps: 

1. E-mail the entire Urban County Council (CouncilMembers-Email@lexingtonky.gov) and let them know what a terrible proposal this is. 

2. Show up at the Committee meeting on October 10 at 1:00. There will presumably be no comments from the public allowed at that meeting, but you still need to be there. You need to let the members of the Committee know that you’re watching -- you’re watching who supports this proposal. And you’re ready to take action against them. 

3. Spread the word to other landlords. 

4. If you have relationships with council members, set up a phone call or meeting. This is a hill to die on for landlords. Make it clear that you will support the challenger for any councilmember who supports this ordinance.

Don’t let anyone tell you that this is not a highly important issue for landlords. Once you can be required to go into business with the government on their terms, there’s nothing that’s off the table. That’s it for today, but it’s plenty. Have a great rest of your week. 

Oh yeah, if you'd like to work with me or need a good lease package, shoot me an e-mail at smarshall@tripleslaw.com or give me a call at (859) 685-0035.