State Appeals Court Rules NYS Section 8 Housing Voucher Law Unconstitutional

ALBANY—A New York State Appeals Court panel has ruled that the state law barring discrimination of prospective renters based on Source of Income, specifically Section 8 housing vouchers, is unconstitutional. At press time, housing advocates and Realtors are currently assessing next steps.

The New York Appellate Division Third Department unanimously ruled on March 5 in part 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. The lawsuit alleged that agents at Ithaca Renting repeatedly told renters that they do not accept government assistance vouchers.

The Gothamist reported that Fane responded that he chose not to participate in the Section 8 program because its rules would force him “to consent to inspections of my buildings as well as my companies’ books, records and computers.”

The State Attorney General and housing advocates are reviewing the ruling and deciding on next steps.

New York Attorney General James stated: “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. We are reviewing today’s decision.”

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.”

New York State Assemblymember Linda Rosenthal, chair of the Assembly Committee on Housing, told Spectrum News: “While many landlords have and will continue to do the right thing, this dreadful decision has the potential to upend New York's social safety net. As Chair of the Assembly Committee on Housing, I urge Attorney General James to appeal this devastating decision on behalf of New Yorkers.”