Legal Opinions - Maryland Court of Appeals: December 10, 2007

Daily Record, The (Baltimore), Dec 10, 2007

Landlord/Tenant

Refusal of federal vouchers

BOTTOM LINE: Landlord violated county ordinance that prohibits discriminatory housing practices by refusing to rent apartments to applicants who proposed to use federal vouchers in part payment of the rent.

CASE: Montgomery County, Maryland v. Glenmont Hills Associates Privacy World At Glenmont Metro Centre, CA No. 20, September Term, 2007 (filed Nov. 30, 2007) (Judges Harrell, Battaglia, Greene, Eldridge (retired, specially assigned), WILNER (retired, specially assigned) & Cathell (retired, specially assigned)).

FACTS: In 1937, Congress inaugurated a major federal effort to provide decent and affordable housing for low-income people by enacting the United States Housing Act (P.L. 75-412). The thrust of that Depression-era statute, aimed not only at the development of additional housing stock but also job creation and slum clearance, was to provide federal funding to enable state or local public housing agencies (PHAs) to construct and manage public housing projects.

In 1965, as part of the Housing and Urban Development Act of 1965 (P.L. 89-117), Congress authorized a new program under which PHAs, through contracts with private owners, could lease apartment units in existing private apartment buildings and then sublease those units to current public housing tenants.

Although other mechanisms were permitted, it was anticipated that the PHA would pay the negotiated market rent to the landlord, the low-income tenant would pay a minimum rent based on an income formula to the PHA, and the Government would make up the difference.

A voucher-type program came into full play, as the new centerpiece of federal low-income housing policy, with the Housing and Community Development Act of 1974 (P.L. 93-383). This program was referred to as, a rental certificate program.

Congress tinkered with the certificate/voucher program frequently during the 1980s and 1990s. In 1998, through the Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276), Congress merged the certificate and voucher programs, and eventually, the certificate program was phased out.

What survives is the Federal Housing Choice Vouchers Program (HCVP). The statutory basis for the program, found in 42 U.S.C. [section]1437f., is supplemented by HUD regulations found in 24 CFR Part 982.

HCVP remains part of a multifaceted federal housing program authorized under 42 U.S.C. [section][section]1437 through 1440. The essence of HCVP is that HUD provides the funding to local PHAs, which administer the program in accordance with an Administrative Plan that the PHA must adopt and which must conform to HUD regulations.

HUD establishes fair market rents for each market area in the U.S. The local PHAs then must adopt a schedule that establishes voucher payment standard amounts for each fair market rent area within its jurisdiction. A family may lease an apartment for more or less than the payment standard, but that standard governs the amount of PHA housing assistance.

In conformance with criteria set forth in HUD regulations, the PHA, pursuant to its Administrative Plan, selects and qualifies prospective low-income tenants. When a family is actually selected from the waiting list, they complete an application to assure eligibility based on income and lack of criminal background.

If the family is approved, the PHA provides information about the criminal background. See 24 CFR [section]982.553. The family receives a HUD voucher from the PHA, which is good for at least 60 days and may be renewed, and a form that the family uses to request PHA approval of an assisted tenancy. The family then attempts to find an apartment and negotiate the rent and other terms of a lease.

There is no direct requirement in the federal law or HUD regulations that a landlord participate in HCVP or accept Section 8 vouchers; nor, subject to certain federal, state, or local anti- discrimination provisions, must a participating landlord accept a particular tenant.

If the landlord and tenant reach agreement, the tenant presents to the PHA a request for tenancy approval. In order to approve the tenancy, the PHA must determine (1) after an inspection of the apartment, that it meets the housing quality standards established by HUD in 24 CFR [section]982.401, (2) that the rent is reasonable, i.e., that it falls within certain HUD-established guidelines set forth in 24 CFR [section]982.507, and (3) that the lease conforms to HUD requirements.

If the tenancy is approved, the PHA enters into a standard housing assistance payment agreement with the landlord under which the PHA will pay the appropriate ho using assistance supplement to the landlord.

Montgomery County has had a local fair housing law since 1968. See MCC, Ch. 27, [section][section]27-1 through 27-63. In 1991, the County Council added to [section]27-12, which prohibits discriminatory housing practices, provisions that make it unlawful for certain landlords in the county to refuse to lease or rent housing to any person based on "source of income."