Fair Housing Month Briefing: California’s New Fair Housing Environment

By David Levy, Fair Housing Council of Orange County

As we enter into the 2020s the fair housing environment in California has undergone some significant changes that became effective at the beginning of the year. The changes range from the adoption of the first set of regulations helping to clarify the application of the housing provisions of the state’s Fair Employment and Housing Act (FEHA), to the addition of a new protected characteristic, to a change in the def inition of the existing source of income protection. California’s housing discrimination laws have not experienced such a significant change since the addition of source of income and sexual orientation protections in 2000, or gender identity, gender expression, and genetic information protections in 2012.

Veteran or Military Status is Now Protected With the passage of Senate Bill 222 (Hill – San Mateo), the characteristics covered by FEHA’s housing provisions now include veteran or military status. Such status has been part of its employment provisions since 2014. This addition brings the total number of characteristics covered under FEHA’s housing provisions to 15, which is eight more than the federal Fair Housing Act. In addition to adding veteran or military status to the enumerated characteristics covered by the FEHA’s various housing discrimination portions, SB 222 explicitly included the use of Veteran Affairs Supportive Housing (VASH) Vouchers as being protected under its source of income protection.

VASH Vouchers are made available through the U.S. Department of Housing and Urban Development (HUD) in conjunction with the U.S. Department of Veterans Affairs (VA). HUD allocates the vouchers to local housing authorities for use in housing veterans who are eligible for VA health care services and are experiencing homelessness. The VA refers eligible veterans and provides case management and supportive services to help the participants achieve housing stability. The inclusion of protections for VASH participants is important, because there have been instances in which housing providers were unwilling to accept these vouchers due to discriminatory attitudes regarding participants possibly having a mental disability, particularly post-traumatic stress disorder, even when the providers were otherwise willing to accept other forms of housing assistance.

Source of Income Now Includes Housing Assistance

Under the requirements of Senate Bill 329 (Mitchell – Los Angeles), the source of income protections of FEHA will extend to users of housing assistance.

Landlords must now allow application by users of Housing Choice Vouchers (HCVs) and other forms of housing assistance programs. SB 329 specifically amended Government Code Section 12927, the housing-specific definitions for FEHA, to state that source of income includes “federal, state, or local public assistance, and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f).” Those federal HCVs are commonly called “Section 8” or “HUD”. Of course, VASH Vouchers discussed above also fall within this definition.

It is now considered a form of housing discrimination to refuse to consider applications from users of these types of assis tance. It will also be dis crimination if tenants or users of other housing-related programs, products or services are treated differently because of their use of housing assistance. The days of rental advertising legally being able to include statements such as “no Section 8”, “no HUD”, or “we do not participate in third-party programs” are over.

Similarly, actually basing approval decisions solely on someone having or not having housing assistance is now outlawed. This in no way means that housing providers cannot use objective, equally applied criteria in screening the users of housing assistance, as they do for non-users. It also does not mean that housing providers have to agree to rents that are below what the marketplace supports. However, it does mean that providers will have to participate in the nominal administration requirements of housing assistance programs. It also means that providers who qualify applicants based on having an income that is at least a multiple of the rent will only be able to apply that multiple to the share of the rent that will actually be paid by the applicant.

Fair housing advocates have long argued for this type of protection for users of housing assistance.

The housing mobility that is theoretically afforded by assistance programs is seen as an important way to give people access to housing in areas of higher opportunity, thus affirmatively furthering fair housing. This means access to better job opportunities, better schools, better medical services, etc. This mobility can work to lessen concentrations of poverty and patterns of racial and/or ethnic segregation. However, as long as users of assistance do not have access to the same pool of housing as non-assisted housing seekers, the potential of programs to provide mobility goes largely unrealized. Also, far too often the claim of not wanting to participate in assistance programs has served as a proxy for discrimination in not wanting to rent to people of certain racial or ethnic backgrounds, who are often perceived to be the most likely users of housing assistance.

California now joins at least 12 other states, and a few dozen local jurisdictions not other wise covered by state law, that include housing assis tance as part of source of income protections.

Many of those laws have been in place for years and provide a practical history of how such laws have operated. California’s fair housing enforcement agency, the Department of Fair Employment and Housing (DFEH), has begun both education and enforcement efforts regarding this change in the law. Information on both can be found at the DFEH web site at www.dfeh.ca.gov/. More on this topic can be found as part of the Poverty & Race Research Action Council’s Expanding Choice:

Practical Strategies for Building a Successful Housing
Mobility Program, which can be found at www.prrac.org/expanding-choice-practical-strategies-forbuilding-a-successful-housing-mobility-program/.

Appendix B of that report details the current laws that are in place around the country.

New California Fair Housing Regulations Now Effective

As a means of interpreting and clarifying how complex legislation shall be implemented and enforced and to assist affected parties to stay compliant with those laws, California long ago established the California Code of Regulations, or CCR. It is the state-level equivalent of the Code of Federal Regulations, or CFR. While HUD has had long-standing regulations related to the federal Fair Housing Act, and DFEH, through the now eliminated Fair Employment and Housing Commission had done likewise for FEHA’s employment coverage, until now there has not been a section of the CCR dealing with discrimination in housing. The only regulations for the housing component of FEHA dealt with DFEH’s housing discrimination administrative procedures, not with what might actually constitute a discriminatory housing practice. That has now changed.

On July 31, 2019, the Fair Employment and Housing Council (FEHC), the state body now tasked with promulgating regulations related to FEHA, adopted a finalized version of regulations addressing some aspects of discrimination in housing for inclusion in the CCR. The adoption of the initial regulations culminated a more than five-year effort begun by DFEH, and which was formalized by the work of the FEHC since its creation in 2013. In crafting the regulations the FEHC received input from a wide array of stakeholders, including housing providers and managers, housing industry representatives, elected officials, attorneys specializing in civil rights law, and consumer and community advocates. The resulting final version of these initial regulations was approved on September 16, 2019, by the California Office of Administrative Law, after its review of the regulations for compliance with laws covering administrative procedures. The regulations became effective January 1, 2020.

They appear in Title 2 of the CCR beginning at Section 12005, and address numerous areas of possible discriminatory housing practices. They are far more detailed and comprehensive than any of their federal counterparts that may exist. They are still a work in progress, in as much as they do not address all of the aspects of FEHA’s housing provisions. The numbering of the various Articles, or sections, reflects this, in that many numbers have been reserved for future topics. The FEHC will continue a process of proposing regulations that address other aspects of FEHA’s housing provisions.

The subjects covered by this first round of regulations are:

Article 1. General Matters (primarily definitions)
Article 7. Discriminatory Effect (also referred to as Disparate Impact)
Article 11. Financial Assistance Practices
Article 12. Harassment and Retaliation
Article 14. Practices Related to Residential Real Estate-Related Transactions
Article 15. Discrimination in Land Use Practices
Article 18. Disability
Article 24. Consideration of Criminal History Information in Housing

The new subjects now under consideration by the FEHC are “Intentional Discrimination”, “Discriminatory Advertisements, Statements, and Notices”, “Consideration of Income”, and expanding the “Disability” Article to cover reasonable modifications. While all of these regulations will be of use in providing better insight into how the law functions and how it may be interpreted by either DFEH or courts, those now in effect that are likely to be of greatest importance and of most interest to landlords are those regarding “Harassment and Retaliation”, “Disability”, and “Consideration of Criminal History.”

The “Harassment” section identifies its two types, “hostile environment” and “quid pro quo”, and provides a detailed description of what may constitute each type. It also provides a description of the various elements and facts that will be pertinent in determining if a harassment violation may have occurred. The “Retaliation” section identifies the persons and activities that may be subject to protection from retaliation that violates their fair housing rights. It also provides the elements of analysis and facts to be considered in assessing whether illegal retaliation may have occurred.

The initial “Disability” section focuses on reasonable accommodations (RAs) generally, and accommodation regarding assistance animals more specifically. The general section stresses the need for confidentiality around RAs, details the request process for RAs, and considers the need and appropriateness for verifications, if any, when considering RAs. Importantly, it also covers the proper process when either a person’s disability, the need for an accommodation, or both, are readily apparent. The section also explains the possible need for an “interactive process” of engagement between the person with disability and the housing provider while considering an RA request. There is also a discussion of when it may be allowable to deny an RA request. The section actually provides seven examples of possible reasonable accommodation requests and how they might be analyzed.

The part on assistance animals identifies the two types: service and support. They are defined in the “General Matters” Article; service animals being specifically trained to perform a task or tasks to assist individuals with disabilities; support animals being those that provide emotional, cognitive or other similar support to an individual with disability. It differentiates the appropriate standards in considering an RA request for each.

Importantly, it makes clear that a “support animal certification from an online service that does not include an individualized assessment from a medical professional is presumptively considered not to be information from a reliable third party.”

However, it goes on to state that “[a] person provided with such a certification must provide an opportunity to the individual requesting the accommodation to provide additional information that meets [previously detailed] requirements… before denying a request for reasonable accommodation.”

The section provides other standards applicable to assistance animals generally. Those include the prohibition on charging any pet fee, additional rent, or other additional fee, including additional security deposit or liability insurance. Such a prohibition is in keeping with the standard for all RAs, no matter the type, which may never be conditioned on the payment of a fee or some other exaction. They also make clear that “no breed, size, and weight limitations may be applied to an assistance animal,” with the exception of limited restrictions on miniature horses.

The last section of greater interest is that of “Consideration of Criminal History Information in Housing”. While HUD’s Office of General Counsel issued guidance on this topic in 2016, there are no formal regulations at the federal level. As this is a topic that has been raised in a number of recent fair housing lawsuits, the adoption of this regulation in relation to California law is quite timely.

Due to both it being a relatively new topic compared to the other ones covered in the regulations, and it perhaps being the most legally complex of the sections, the highlights mentioned here are no substitute for readers diligently studying this section via the DFEH website using the link shown below. In broad terms, the regulations make clear that to avoid a claim that such a screening policy has a discriminatory effect, those screening applicants on the basis of criminal history should be prepared to show that it is “necessary to achieve one or more substantial, legitimate, nondiscriminatory business interests, such as the safety of its residents, employees, or property.”

Further, the implementing practice for the screening needs to “seek, consider, and use only criminal history information regarding directly-related convictions.” This means records of arrest or other non-adjudicated interaction with the criminal justice system, or matters that have been sealed, expunged or pardoned should not be used. Similarly, “blanket bans” on convictions generally or those that capture broad swaths of criminal law are not to be used. Instead, “in determining whether a criminal conviction is directly-related, a practice should include consideration of the nature and severity of the crime and the amount of time that has passed since the criminal conduct occurred as provided in criminal history information.”

The final element in defending the validity of criminal screening practices is a showing that “[t]here is no feasible alternative practice that would equally or better accomplish the identified business interest with a less discriminatory effect.”

In addition to providing much greater detail regarding the broad analysis just presented, the regulations also identify specific practices related to criminal history information that are defined to be prohibited outright. With very limited exceptions, it is unlawful to seek, consider, use, or take an adverse action based on various specifically identified items of information that are anything other than a conviction as an adult. Likewise, implementing “blanket bans” or categorical exclusions adverse against all individuals with a criminal record regardless of whether the criminal conviction is directly related to a demonstrable risk to a nondiscriminatory business interest is unlawful.

Given this new regulatory environment, all parties that are concerned with staying compliant with fair housing laws in California should become familiar with either the direct language of the CCR or a reliable distillation of these new provisions, and, as is always a good practice, be sure to update their fair housing training. Those that provide training regarding California fair housing compliance should be sure to include discussion of this new regulatory framework in the curriculum.

The finalized version of the regulations can be viewed at the following link: https://tinyurl.com/2020FHregs

David Levy, Programs Specialist with the Fair Housing Council of Orange County (FHCOC), has over 26 years’ experience in the areas of fair housing, landlord-tenant law and housing affordability. In addition to his work with FHCOC, he serves on the boards of the Kennedy Commission, the Affordable Housing Clearinghouse, and the Clearinghouse Community Development Financial Institution (CDFI), all located in Orange County, California.

This article is based on work supported by the U.S. Department of Housing and Urban Development (HUD) under FHIP Grant #FEOI19009. Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of HUD.