National Housing Law Project Housing Law Bulletin

One of the federal law provisions that has been attacked aggressively by landlord groups is the one that prohibited any landlord with a Section 8 contract from refusing to rent to a certificate or voucher holder because his or her status as a participant in the Section 8 program.³ Opponents labeled that provision the "take one, take all" requirement and argued that it deterred landlords from taking their first certificate or voucher holder because they would then have to rent to every other certificate or voucher holder who applied. The label and the argument, however, ignored the fact that that section merely barred the landlord from relying on an applicant’s participation in the Section 8 program as a reason for rejection. It did not prevent the landlord from using all of its normal screening criteria to decide whether to rent to the applicant. Nonetheless, Congress suspended that provision in 1996.⁴

Some states, however, have laws that prohibit landlords from rejecting applicants because of the source of their income⁵ or because their rent will be paid in part from a housing subsidy.⁶ One of those states is New Jersey, which has a statute that provides that landlords of multifamily properties may not refuse to rent to a person because of the "source of any lawful rent payment."⁷ That statute was enacted to assist people with low incomes in securing a place to live in a housing market that was plagued by critical shortages.

In a recent decision, a New Jersey appellate court held that the state statute requires landlords to accept Section 8 payments and that, in imposing such a mandate, it was not preempted by federal law. Franklin Tower One, L.L.C. v. N.M, __ N.J. Super. __ , No. A-001036-96T3 (App. Div. Oct. 22, 1997).

The facts were fairly straightforward and compelling. The tenant in the case was an elderly woman who had been a tenant of the landlord for five years. Her sole income was a Social Security Disability payment of $521.80 per month and between $100-200 per month in food stamps. Her rent was $425 per month.

She applied for Section 8 in 1991, when she moved in, but did not receive it until April 1996, when the local housing authority issued her a voucher. When she asked her landlord to sign the Housing Assistance Payment contract and accept her voucher, the landlord refused. His position was that he had never participated in the Section 8 program and he did not want to become enmeshed in the its bureaucracy.

When the tenant did not pay her rent for May of 1996, the landlord brought an eviction action. As a defense, the tenant raised the landlord’s refusal to accept the Section 8 voucher in lieu of rent, and claimed that refusal violated N.J.S.A. § 2A:42-100. The trial court rejected the tenant’s defense, concluding that the statute could not be interpreted as compelling the landlord to participate in the Section 8 program, and that if it did, it would be preempted by federal law. The tenant then appealed the eviction judgment.

On appeal, the court reversed, concluding that the New Jersey statute did cover the Section 8 program and that it was not preempted by federal law. On the statutory interpretation question, there had been an earlier decision that held that a landlord who was already participating in the Section 8 program with some tenants could not refuse to accept a voucher from another tenant. M.T. v. Kentwood Const. Co., 278 N.J. Super. 346 (App. Div. 1994). The landlord tried to distinguish that case on the ground that he had never participated in the Section 8 program at all or in any other governmental subsidy program. His argument was that it was one thing to bar a landlord from discriminating against subsidized applicants if he was already willing to participate in a subsidy program, but that forcing a landlord to sign up for a program against his will was more than the New Jersey Legislature had intended.

The appellate court rejected that distinction. In its view, the language of the statute clearly covered Section 8 subsidies and had no exception for landlords who had not previously participated in the program. In addition, that interpretation was compelled by the legislative history, which stated that the bill was intended to protect tenants receiving governmental rental assistance from discrimination.

The second issue was whether the state statute conflicted with the federal Section 8 legislation and thus was preempted by it. The landlord’s argument was that the federal legislation contemplated a voluntary program in which landlords could choose whether to participate or not and that a state statute compelling participation was in conflict with that voluntary aspect of the federal program. The court rejected that argument as well, relying heavily upon the decision of the Massachusetts Supreme Judicial Court which had rejected the same argument in Attorney General v. Brown, 511 N.E.2d 1103 (Mass. 1987). The view of both courts was that the failure of the federal government to compel landlords to participate in the program did not preclude the states from compelling such participation.
The central purpose of the Section 8 program is to make decent housing available to people with low incomes, and the New Jersey statute barring discrimination against subsidized applicants has the same purpose.

The same conclusion should be reached even though Congress has suspended the federal law that barred landlords who already have one Section 8 contract from refusing to accept another Section 8 tenant. The reason for that suspension was that fear of the obligation to take future subsidized tenants was deterring landlords from accepting even the first tenant. In states like New Jersey where state law prohibits discrimination against Section 8 tenants, that deterrence effect would not arise. In New Jersey, the obligation not to discriminate arises not because one has accepted one subsidized tenant, but because one has entered the residential landlord business. All landlords are barred from discriminating, not just those who have taken a subsidized tenant. Thus, there is no "take one, take all" problem. Compelling all landlords not to discriminate does not deter anyone from accepting a Section 8 tenant. Since there is no deterrence, there is no conflict with Congress’ policy judgment.

The tenant was represented by John Ukegbu of Hudson County Legal Services in Jersey City.

1. See, e.g., A Critique of Landlord-Commissioned Report on the Certificate and Voucher Programs, 24 HOUS. L. BULL. 35 (May/June 1994); ABT, Final Report on Recommendations on Ways to Make the Section 8 Program More Acceptable in the Private Rental Market (Mar. 1994); H.R. 3838, 140 CONG. REC. H6017 - H6089 (July 21, 1994); H.R. 2406, 142 CONG REC. H4559 - H4643 (May 8, 1996) and H4662 - H4753 (May 9, 1996); H.R. 2, 143 CONG. REC. H2619 - H2647 (May 14, 1997).
2. Pub. L. No. 105-134, §§ 203(b) and (c) of § 101(e), 110 Stat. 1321-281 (Apr. 26, 1996); Pub. L. No. 104-204, § 201(e), 110 Stat. 2893 (1996).
3. 42 U.S.C.A. § 1437f(t) (West 1994).
4. Pub. L. No. 105-134, §§ 203(a) of § 101(e), 110 Stat. 1321-281 (Apr. 26, 1996); see Pub. L. No. 104-204, § 201(e), 110 Stat. 2893 (1996).
5. E.g., Wis. Stat. § 101.22(6).
6. See, e.g., Mass. Gen. L. ch. 151b, § 4(10); Attorney General v. Brown, 400 Mass. 826 (1987).
7. N.J.S.A. § 2A:42-100.