July 19, 2001

City of Eureka Housing Authority
735 W. Everding Street
Eureka, CA 95503  

RE: Section 8 tenant-based program, 90 day notice and discrimination against “source of income.”

Dear Director:

We would like to bring to your attention two recent changes in California law. One requires Section 8 voucher/certificate landlords to provide a 90-day notice of termination of tenancy.  California Civil Code section 1954.535 provides:

Where an owner terminates or fails to renew a contract or recorded agreement with a governmental agency that provides for rent limitations to a qualified tenant, the tenant or tenants who were the beneficiaries of the contract or recorded agreement shall be given at least 90 days' written notice of the effective date of the termination and shall not be obligated to pay more than the tenant's portion of the rent, as calculated under the contract or recorded agreement to be terminated, for 90 days following receipt of the notice of termination of [sic] nonrenewal of the contract.[1]

 As the administrator of the Section 8 voucher/certificate program, you should inform Section 8 voucher/certificate holders and landlords of this new notice requirement.  Information about the notice requirement also should be incorporated into the materials provided by your agency to Section 8 voucher/certificate holders and landlords.  In addition the Section 8 Housing Assistance Program (HAP) contract and Lease Addendum should be revised.  For your information, it is our understanding that many public housing authorities throughout the state are informing Section 8 voucher/certificate holders and landlords of the 90-day notice requirement.  Attached is a list of those PHAs that have notified us of their practice of advising Section 8 voucher/certificate holders and landlords of the 90-day notice requirement.

The second new statutory provision prohibits an owner of housing or any person, organization or entity engaged in any provision of housing from discriminating against persons on the basis of  “source of income.”  This prohibition is included in the California Fair Employment and Housing Act (FEHA).  "Source of income" is defined as “lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.”[2] FEHA also prohibits landlords from utilizing practices that would exclude applicants with Section 8 subsidies from renting housing.  For example, if a landlord uses an income standard to assess eligibility for the rental unit, it must, in the case of Section 8, base the calculation on the portion of the rent that is to be paid by the tenant.  HUD recognizes the existence of local laws, such as this, and has noted that the Section 8 regulations are not intended to pre-empt operation of State or local laws that prohibit discrimination against Section 8 voucher holders.[3]

As the administrator of the Section 8 voucher/certificate program, you should inform landlords and Section 8 voucher/certificate holders of this new legislative provision.  The information should advise Section 8 voucher/certificate holders regarding the nondiscrimination against source of income provision and the availability of fair housing counselors in your area to whom such discrimination should be reported.

In addition, PHAs are also independently subject to the provisions of FEHA (and any other applicable local source of income anti-discrimination ordinances adopted by your local government).   As a result, some California PHAs have revised preferences for admission for  families with income from work, or refrained from adopting such working preferences at all, to avoid violating state or local discrimination laws.[4] Accordingly, you should review all aspects of your PHA plan to determine if it is in compliance with FEHA  to not discriminate against families because of their “source of income.”   If necessary, your PHA plan should be revised.

 Enclosed please find two reference materials for your use.  The first memorandum supports the position that Section 8 voucher/certificate tenants should be given a 90-day notice if the landlord terminates or fails to renew the Section 8 contract.  The second article is in support of the position that the nondiscrimination against source of income applies to Section 8 voucher/certificate holders.

If you have any question about this letter, please contact either Catherine Bishop (extension 105) or Lynn Martinez (extension 110) at 510-251-9400.

Cordially,

Catherine M. Bishop
S. Lynn Martinez

Enclosures (3)

[1]Cal. Civ. Code § 1954.535, as amended by SB 1098, effective Jan. 1, 2000.

[2]Cal. Gov’t Code § 12955, as amended by SB 1098, effective Jan. 1, 2000. “Source of Income” is defined in § 12955(p)(1).

[3]See 24 C.F.R. §982.53(d).

[4]For more information regarding the fair housing implications of working preferences, see S. Lynn Martinez and Barbara Sard, Federal Housing and Working Families, 34 Clearinghouse Review: Journal of Poverty Law and Policy 597 note 31 and accompanying text (Jan.-Feb. 2000).