Key Takeaways:

• New York State Human Rights Law source-of-income anti-discrimination statute held as unconstitutional.

• People v. Commons W., LLC underscores the challenging balance between promoting equitable housing practices and safeguarding constitutional rights.

• People v. Commons W., LLC also underscores the interaction between state and federal laws, particularly in the context of voluntary federal programs like Section 8. While the program remains voluntary at the federal level, the Human Rights Law amendments impose a mandatory aspect when applied to landlords.

In a recent legal development, a New York State Supreme Court ruled that the source-of-income anti-discrimination statute within the New York State Human Rights Law (NYSHRL) is unconstitutional, citing a violation of the Fourth Amendment of the U.S. Constitution.

In People v. Commons W., LLC, the court examined the intricate intersection between tenants’ housing rights and landlords’ constitutional protections. Commons revolved around the constitutionality of an amendment to the New York State Human Rights Law, specifically Executive Law § 296 (5)(a)(1), which makes it unlawful to discriminate against potential tenants based on their “lawful source of income.”

Enacted in April 2019, the amendment sought to address housing discrimination by prohibiting landlords from refusing to rent or lease housing accommodations to individuals or groups based on their sources of income. This includes income from federal, state, or local public assistance or housing assistance programs, such as the Section 8 vouchers provided under the federal Housing Choice Voucher Program.

The attorney general contended that respondents, owners and operators of residential rental properties, are violating the Human Rights Law’s amendment by refusing to participate in the Section 8 program. In other words, the attorney general was arguing that the refusal itself was discrimination under the New York State Human Rights Law. Respondents argued that the  amendment to the Human Rights Laws forces landlords to participate in the voluntary Section 8 program, thereby infringing upon their Fourth Amendment rights. In particular, accepting Section 8 vouchers as payment necessitates entering into a Housing Assistance Payment contract with a Public Housing Agency. These contracts require landlords to consent to property inspections and provide access to records by multiple government entities. According to respondents, this mandatory consent for inspections and access to records amount to a violation of a property owner’s Fourth Amendment rights against unreasonable searches and seizures.

Relying on precedents set by the U.S. Supreme Court and New York’s Appellate Division, the court agreed with respondents and held that the source-of-income discrimination statute violated the Fourth Amendment as it compelled property owners to consent to warrantless searches of their property and records.

As People v. Commons W., LLC continues to develop, we will monitor how other New York courts utilize this precedent when analyzing the case’s rationale and holding. This becomes particularly pertinent in the context of the New York City Human Rights Law, which shares similar language with the New York State Human Rights Law.

If you have any questions about these changes or how they impact your business, please contact:

• Charles A. Lazo
• Scott R. Green
• Stephen C. Mazzara
• Caroline J. Berdzik
• Or another member of our Employment and Labor group