A Different Type of Housing Crisis: Allocating Costs Fairly and Encouraging Landlord Participation in Section 8

The Section 8 Housing Choice Voucher Program ("Section 8") is an important effort to make quality housing accessible to low-income families. Although the federal program is voluntary, several states, cities, and local communities have responded to the problem of landlord rejection of Section 8 tenants with laws prohibiting discrimination based on a prospective tenant's source-of-income. Mandatory Section 8 facilitates the program's success but also raises significant equity issues when individual landlords face unusually high burdens as a result of mandated participation. Further, mandatory participation undermines incentives to implement an efficient program because it removes the need to attract voluntary participants. As such, an exception is a necessary and desirable complement to a mandatory Section 8 scheme. An exception could be constructed as a statutory exemption or affirmative defense, or created through a play-or-pay approach. Finally, encouraging rather than coercing landlord participation offers significant advantages in achieving the program's objectives and is an important balance to mandated participation. I. INTRODUCTION The recent financial crisis has spurred calls for reform and greater accountability in housing. Although the present focus may be on sub-prime loans and foreclosures, our country also faces another type of housing crisis: a profound lack of affordable housing. The Section 8 Housing Choice Voucher Program ("Section 8") addresses this dilemma by distributing government rent subsidies to qualifying families. Although the federal program is voluntary, several states and cities have passed laws prohibiting landlord discrimination against Section 8 recipients. These laws eliminate landlords' ability to refuse Section 8 vouchers, effectively mandating their Section 8 participation within their jurisdictions. These laws raise the issue of whether compulsion, without exception, is the most equitable and effective way to achieve important social goals. In the context of affordable housing, compulsion is an equitable and effective way to achieve societal goals. However, the importance of providing affordable housing must be balanced against the fairness issues that mandated Section 8 participation raises. To achieve a balance, this Note proposes a hardship exception for certain landlords as a necessary complement to mandatory Section 8 participation. Second, this Note questions mandatory landlord participation in Section 8 and considers the advantages of relying on incentives. Part II introduces the Section 8 program, including the program's goals, structure, and challenges. Part III provides an overview of the laws that prohibit discrimination based on source-of-income, effectively mandating landlord participation in Section 8 by prohibiting them from treating Section 8 recipients differently. Part IV argues that fairness requires some exception to mandated Section 8 participation for landlords facing an undue burden when compelled to accept Section 8 vouchers. Part V contemplates whether the judiciary or legislature is the appropriate body to implement an exception, and poses possible constructions of this exception. Finally, Part VI suggests that efforts to increase landlord participation in Section 8 should focus on incentives rather than coercion. Although an exception to mandatory Section 8 participation cures significant equity issues, a mandate still may not be the best way to increase affordable housing options. Communities should consider steps to strengthen the appeal of Section 8 to landlords before resorting to compelled participation. II. INTRODUCTION TO SECTION 8 Even as incomes fail to keep pace with housing costs, there has been a significant decrease in efforts to provide affordable housing.1 In 2007, approximately 17.9 million U.S. households were "severely" cost-burdened because of housing costs, meaning they paid over half their income just toward housing. …