NYSAR: Lawful Source of Income Still a Protected Class Despite Court Ruling

ALBANY—The New York State Association of Realtors informed its membership earlier today via an e-mailed “Legal Update” that the New York State Attorney General has filed an appeal of a court decision rendered earlier this month that found certain housing assistance programs and lawful source of income protections were unconstitutional.

NYSAR stated: “Upon filing the appeal, the decision is stayed until the New York State Court of Appeals publishes a decision. Because the decision is stayed, lawful source of income is still a protected class under New York law.”

On March 5, a New York State Appeals Court panel ruled that the state law barring discrimination of prospective renters based on Source of Income, specifically Section 8 housing vouchers, is unconstitutional.

The New York Appellate Division Third Department unanimously ruled that the state’s Source of Income law violated landlords’ Fourth Amendment rights. The ruling stated that as a “consequence of this law landlords are now forced to consent to governmental searches of their rental properties and records. Given that, for the reasons that follow, the source-of-income discrimination law violates landlords' Fourth Amendment rights to be free from unlawful searches, we are constrained to conclude that the law is unconstitutional on its face.”

The case State of New York vs. Common West, LLC stems from litigation brought in October 2022 by New York State Attorney General Letitia James against Ithaca landlord Jason Fane. The Attorney General charged that Fane, his company Ithaca Renting Company and his related entities denied housing to low-income tenants. An investigation by the Office of the Attorney General found that Mr. Fane and his real estate agents refused to accept Section 8 vouchers at his properties, in violation of New York’s housing laws against source of income discrimination.

New York Attorney General Letitia James issued the following statement on March 5 in reaction to the court decision: “Every New Yorker deserves access to safe and dignified housing regardless of their income or background. Housing vouchers help thousands of New Yorkers stay in their homes, make ends meet, and raise their families. My office has always fought to protect New Yorkers’ right to housing.”

HGAR President Rey Hollingsworth Falu released a written statement to Real Estate In-Depth in reaction to the Appellate Court’s ruling, stating: “The Hudson Gateway Association of Realtors remains firmly committed to the principles of fair housing and equal access to housing opportunities for all New Yorkers. Ensuring that individuals and families have a fair chance to secure housing, regardless of income source, is an important part of creating strong and stable communities. We are currently reviewing the ruling and its potential implications for the real estate community, property owners, and tenants across our region. HGAR will continue to advocate for policies that promote housing opportunity, protect property rights, and support a fair, transparent, and functional housing market for everyone.”