What Is Source of Income Protection?

Generally, one of the key requirements for renting is a reliable, consistent source of income. But did you know that there are source of income protection laws that include income as a protected class? It safeguards renters from income discrimination, which limits their chances of securing a lease. But how does this work exactly? Continue reading to find out!

Key Takeaways

• Source of income protection refers to the housing policy that prohibits landlords and property managers from denying housing to renters solely based on their income stream.
• The common sources of income protected under this regulation include housing vouchers, disability benefits, child support, retirement income, and other lawful financial assistance.
• The federal Fair Housing Act does not currently recognize source of income as a protected class, so protections depend on state and local laws.

What Does Source of Income Protection Mean?

Over our time working in San Antonio property services, we know that source of income protection prohibits landlords from rejecting applications based on how they receive income. However, keep in mind that landlords can still evaluate whether the income meets rental requirements.

In practice, this protection prevents potential fair housing discrimination, such as refusing to accept housing vouchers or disregarding income from rental assistance payments. Aside from this, in jurisdictions where source of income is a protected class, it may also be discriminatory if a landlord or property manager imposes stricter tenant screening procedures or charges additional fees or deposits based on your source of income.

What Counts as “Source of Income”?

At this point, you might be wondering, what exactly is the “source of income” that this protective housing policy covers? In the simplest terms, this protected class accounts for alternative sources of income other than the typical monthly salary or payroll. But to give you a better understanding, here’s a quick rundown of the different types of housing incomes under this protection:

• Government housing assistance: includes housing choice vouchers (HUD Section 8), local housing subsidies, and rental assistance programs.
• Family and court-ordered financial support: Arrangements agreed-upon or imposed by the court system, such as child support payments, alimony, trust funds, and more.
• Public benefits and disability income: monthly payments from government benefit programs, including social security retirement, disability insurance, supplemental security income, VA benefits, and workers’ compensation payments.
• Investment income and retirement fund: funds coming from non-employment sources such as pension payments, retirement account distributions, and investment dividends.

Is Source of Income Protected Under the FHA?

While the source of income is a protected class under local regulations, it is not covered by the federal Fair Housing Act (FHA). This means that the source of income protection law applies only in select states and localities and has not been fully adopted nationwide. As of current, the only protected class listed under the federal Fair Housing Act includes race, color, national origin, disability, sex, familial status, and religion. So, the source of income may be used in the screening process to evaluate your application, but landlords must always comply with applicable state and local fair housing laws.

States and Cities with Source of Income Protection

So, where in the country can you expect the source of income protection to take effect when renting? As of the latest fair housing reports, there are 23 states and the District of Columbia that impose a statewide regulation that prohibits housing discrimination based on the tenant’s source of income, up to a certain degree. For example, some states, like California and Colorado, have added source of income protection under their fair housing policies. On the other hand, other states impose local ordinances that provide protection for sources of income, such as housing vouchers, child support, and social security. Aside from these states, roughly 150 cities and counties across 27 states have established “source of income” as a protected class under local fair housing regulations.

In contrast, 7 states have preemptive bans on the implementation of the source of income discrimination protections. Basically, these states limit local authorities from administering source of income protection ordinances. For example, Austin and Dallas earlier had income protection ordinances. But, in 2015, Texas’s preemptive ban on source of income protection laws limited how such local regulations are carried out.

Now, keep in mind that the source of income protection laws can vary significantly by jurisdiction. On top of this, such regulations can change frequently, considering how SOI protection has helped lower housing discrimination and inequality. To sum up, here’s a quick rundown of the states that allow source of income protection laws and those that implement preemptive bans on the local SOI protection ordinances:

What Happens If a Landlord Violates Source of Income Laws?

Let’s say that you’re in a state where the source of income protection is in effect. How do you know if you’re being unfairly discriminated against because of different types of income? To better understand source of income protection laws and what happens when a rental owner violates them, it’s important that you first learn what exactly counts as a violation. Here are some common examples:

• Refusing to acknowledge your income received from housing assistance, rental support, family financial support, and the like.
• Specifically stating that housing vouchers and the like are not accepted in their rental property listings and advertisements in areas where source of income protections apply.
• Asking for a higher-than-usual security deposit because your income comes from housing vouchers or similar.
• Applying stricter screening standards (rental history, credit checks, etc.) to housing voucher applicants only.
• Delaying or completely failing to process paperwork regarding voucher approval to discourage applicants.

If you experience these or something similar, you’re most likely being discriminated against based on your income source instead of the standard and legitimate qualification requirements. From here, you can file a complaint, stating that the rental owner has violated your source of income protection rights.

To do so, you need to have ample documentation of the violation, including communications and even marketing materials. Then, head over to the fair housing agency and request that they investigate the case further.

The consequences of violating the source of income protection laws vary depending on the jurisdiction. However, this can range from monetary fines to damage compensation and the payment of your legal costs. At the same time, the court may require the landlord to change their housing policies and ask them to undergo fair housing training.

How Bay Property Management Can Help

All in all, source of income protection policies are important in ensuring fair and equal housing opportunities to everyone. And while it has not been adopted as a protected class on the federal level, many still benefit from the security it provides against income discrimination.

While Texas does not have source of income protection laws in place, we at Bay Property Management Group follow standard tenant screening procedures designed to maintain consistent and fair evaluation of applications. We believe in protecting both tenants and landlords by ensuring a good fit. Looking to rent in San Antonio and other nearby areas? Contact us today, and we’ll help you get set up for the best renting experience.