Often the first time a property owner learns about a housing discrimination claim is when a letter arrives from the U.S. Department of Housing and Urban Development (“HUD”) saying that a complaint was received and that it has been transferred to the California Department of Fair Employment and Housing (“DFEH”) for investigation. Soon afterwards another letter from DFEH repeats that there is a complaint filed and asks the property owner or other accused to respond with an answer and to supply extensive supplemental information. What is this two-step procedure about?
Federal and State laws both govern fair housing. Federal laws prohibit housing discrimination based on race, color, religion and national origin (Title VIII of the Civil Rights Act of 1968, the Fair Housing Act), sex or gender (Housing and Community Development Act of 1974), and familial status and handicap (Fair Housing Act Amendments of 1988). HUD may determine that State or local law is ‘equivalent’ in protection to the federal statutes. When approved by HUD, a State or local agency will enforce both the federal and State fair housing laws.
HUD has ruled that California’s laws against housing discrimination are ‘equivalent’ to federal statutes. DFEH is the primary California agency which investigates, mediates and prosecutes fair housing claims in this State. ‘Equivalent’ does not mean ‘identical,’ and California’s law has a number of unique features.
Why must a property owner comply with California fair housing laws when federal laws cover the same topic? Federal laws generally “pre-empt” or take precedence over conflicting State laws. But Congress may give States permission to add additional requirements to its laws. In 42 U.S.C. §3615, Congress allows States to pass laws that “grants, guarantees or protects the same rights” as federal fair housing law but not to enact laws that require or permit acts that would be discriminatory housing practices under federal law.
California law prohibited several types of discrimination before the federal laws were passed. The Unruh Civil Rights Act, Civil Code §51 et seq., originally adopted in 1909 and amended as recently as 2005, now prohibits discrimination by businesses based on sex, race, color, religion, ancestry, national origin, disability, or medical condition. “Ancestry,” added in 1959, and “medical condition,” added effective January 1, 2001, have no federal counterparts.
The California Supreme Court interpreted the Unruh Act in Marina Point, Ltd. v. Wolfson (1982) 30 Cal 3d 721 as barring all “arbitrary” discrimination by a business establishment, including discrimination against renting to families with children. This decision came six years before federal law prohibited discrimination based on familial status.
California also prohibits discrimination in housing based on sexual orientation and source of income. Government Code §12955. Federal law does not protect against these types of discrimination. Under federal law, transvestites are not considered “handicapped.” Act of Sept. 13, 1988, P.L. 100-430, § 6(b)(3), 102 Stat. 1622. Under California law, “sex” as a protected category includes “a person’s gender identity and gender related appearance and behavior ...” Government Code §12926(p) and Penal Code § 422.56(c). Federal law also prohibits discrimination based on sex, but does not define that class so broadly. 42 U.S.C. §3604. California’s “source of income” law has not been held to require a landlord to participate in Section 8 federal housing assistance programs.
Some differences between California and federal law seem trivial. Federal law prohibits discrimination based on “handicap” while California statutes use the more politically correct term “disability.” California also prohibits discrimination based on “ancestry.” Only in the rarest cases will discrimination based on ancestry differ from discrimination based on “national origin.” In Abou-Jaoude v. British Airways (1991) 228 Cal. App. 3d 113, a family of Lebanese extraction sued for discrimination based on ancestry and national origin without distinguishing between the two claims. If someone claimed discrimination because he is an Arab, that would be national origin discrimination, but if he claimed discrimination because he is Osama bin Laden’s grandson, that could be ancestry discrimination.
Courts have held that the Unruh Act prohibits all “arbitrary” discrimination. As stated in the Marina Park case, 30 Cal.3d at 725-726: an individual “... cannot be excluded solely because he falls within a class of persons whom the owner believes is more likely to engage in misconduct than some other group. Whether the exclusionary policy rests on the alleged undesirable propensities of those of a particular race, nationality, occupation, political affiliation, or age, in this context the Unruh Act protects individuals from such arbitrary discrimination.”
When is discrimination considered “arbitrary?” In Koire v. Metro Car Wash (1985) 40 Cal.3d 24, 36, the California Supreme Court held that a car wash could not offer discounts to female customers on “Ladies Day” and a bar could not offer free admission to females on “Ladies Night.” Some promotional discounts are still permissible under the Unruh Act: “For example, a business establishment might offer reduced rates to all customers on one day each week. Or, a business might offer a discount to any customer who meets a condition which any patron could satisfy (e.g., presenting a coupon...). In addition, nothing prevents a business from offering discounts for purchasing commodities in quantity, or for making advance reservations. The key is that the discounts must be ‘applicable alike to persons of every sex, color, race, [etc.]“ . . . instead of being contingent on some arbitrary class-based generalization.” In the rental housing market, “move-in” discounts are valid, because any new tenant can qualify regardless of sex, color, race, etc.
Both California and federal law prohibit discrimination against families with children under age 18. Both specifically permit housing restricted to senior citizens when certain requirements are met. Federal law does not otherwise cover housing discrimination based on age. California law does. Civil Code §51.2 says that, except for qualified senior housing, the Unruh Act “...shall be construed to prohibit a business establishment from discriminating in the sale or rental of housing based upon age....” This law applies only in the housing field. Discrimination based on age is not “arbitrary” in other areas. Starkman v. Mann Theatres Corp. (1991) 227 Cal. App. 3d 1491, 1496 approved movie theater discounts for children age 12 or under and for senior citizens.
Why might a landlord want to discriminate based on age? Fair housing agencies compare the percentage of families with children who are tenants of an accused landlord with census data showing the percentage of tenants who have children in the local area. A landlord might decide to improve his statistics and actively favor families with children in rental decisions. While this should reduce claims of discrimination based on familial status, the strategy will backfire since housing discrimination based on age is illegal in California.
One landlord in San Jose considered using a “credit scoring” approach to tenant selection. Credit scoring helps lenders decide whether a borrower is qualified for a loan. It uses objective facts to evaluate customers, rather than a manager’s judgment. Scoring is based on a statistical model which examines many types of data to determine what information is most important in making a reliable decision. Both credit card companies and mortgage lenders are prominent users of credit scoring. The landlord hoped a similar technique would help select more qualified tenants without violating fair housing laws.
The first statistical model developed to “score” tenants included the age of the tenant as a reliable predictor of the likelihood of tenant problems. While legal in other States, this model violates California’s law against age discrimination in housing. Informed of this law, the landlord chose a different statistical model developed for student housing. That model does not use age to make rental decisions and is legal.
Under federal law a “handicap” is a physical or mental impairment which “substantially” limits one or more major life activities. California’s definition of a disability omits the word “substantially.” Courts previously assumed that this omission was not significant and construed federal and California law the same way. Cassista v. Community Foods (1993) 5 Cal. 4th 1050. State regulations adopted under the old California law, 2 Cal. Code Regs. §7293.6 (1980), included the missing word.
A second difference arose when the U.S. Supreme Court ruled that, under the Americans With Disabilities Act, a disability must be evaluated in light of the person’s condition using corrective measures. Sutton v. United Airlines (1999) 527 U.S. 471. A severely near-sighted person would not be disabled under this decision if eyeglasses correct his vision.
Effective January 1, 2001, the Unruh Act and the Fair Employment and Housing Act provide greater protection for the disabled and new protection for those with medical conditions. These statutes now reject the Cassista decision and define a disability as any limitation of a major life activity, even if not “substantial.” The amended laws also consider disability “without respect to any mitigating measures, unless the mitigating measure itself limits a major life activity.” Government Code §§12926 and 12926.1. Section 12955.3 applies this definition to fair housing. These laws protect those with physical and mental impairments which are “disabling, potentially disabling, or mistakenly perceived as disabling or potentially disabling.” Federal law has none of these changes.
What is the practical effect of the California statutes? Under both federal and California law, a landlord must make “reasonable” accommodations to the facilities or policies when “necessary” to allow the disabled an equal opportunity to use and enjoy the dwelling. Fair Housing Act, 42 U.S.C. §3604(f)(3)(B). Civil Code §54.1(b)(3)(B). A tenant with a condition that is only “potentially disabling” or which the landlord mistakenly thinks is disabling, or which has only an insubstantial limitation on a major life activity will not usually “need” an accommodation.
“The concept of necessity requires...at a minimum the showing that the desired accommodation will affirmatively enhance a disabled plaintiff’s quality of life by ameliorating the effects of the disability.” Bronk v. Ineichen (7th Cir., 1995) 54 F.3d 425, 429. Even when an accommodation is necessary, it may not be “reasonable” if the cost to the landlord exceeds the benefit to the tenant. The California laws expand the number of tenants who can sue for disability discrimination, but they do not change the landlord’s duty to accommodate the disabled.
Effective January 1, 2008 a new California law, Civil Code §1940.3, addresses discrimination based on immigration status or citizenship. The federal Fair Housing Act does not prevent discrimination based on citizenship status. Espinoza v. Hillwood Square Mutual Association 522 F.Supp. 559 (E.D. Va. 1981). HUD has confirmed this by publishing a “Response to concerns about housing security following September 11, 2001.” As long as a property owner asks the same questions of all, regardless of national origin, federal law does not prohibit asking about immigration status.
The new California law takes the opposite view. First, it forbids local governments from requiring a property owner to ask about immigration status and refuse to rent to undocumented aliens, or take any other action based on citizenship or immigration status. Second, it prohibits a property owner from asking about immigration or citizenship status, or requiring any statement, representation or certification about that status. However, it allows a property owner to comply with legal obligations under federal law, and to request information or documents necessary to verify the financial qualifications or identity of a prospective tenant or occupant.
A property owner will need to be careful, under the new law, not to request information that may reveal citizenship or immigration status unless it is needed to verify financial qualifications or identity. A social security number is not always necessary, since credit history can also be verified if the applicant provides a U.S. government issued tax identification number. A request for a “government-issued” photo identification is valid.
The reliability of the “Matricula Consular,” a form of identification issued by the Mexican government through its consular offices to Mexican nationals living outside of Mexico is controversial. Refusing to accept these documents while accepting similar documents issued by Poland, for example, would discriminate on the basis of national origin. A better practice, one generally followed by U.S. banks when opening a new account, would be to require two forms of identification of which the Matricula Consular might be one. By asking for two forms of identification from everyone, regardless of national origin, citizenship or immigration status, a property owner would likely avoid the appearance of discrimination.
Determining the true identity of a rental applicant is important both for enforcing any future judgment for rent or unlawful detainer and also for allowing other tenants to check the Sex Offender registry. California Civil Code §2079.10a requires that a property owner put a notice about this registry in all leases, but does not require further efforts to inform other tenants about the location of registered sex offenders. In enacting Megan’s Law, the California Legislature declared: “...that releasing information about sex offenders under the circumstances specified in this act will further the primary government interest of protecting vulnerable populations from potential harm.” (Stats. 1996, ch. 908, § 1(d).) If a property owner does not take reasonable steps to ascertain the identity of new tenants, the public’s right to be informed and to use the sex offender registry will be useless.
What happens if no credit information turns up when running a credit check using a tax identification number? The property owner should follow exactly the same procedure used if no credit information shows when running a check using a social security number. The applicant should be asked to supply enough information to assure that payment of the rent will be made. The property owner is entitled to an equal degree of assurance from all tenants, regardless of citizenship or immigration status. A written policy stating what additional information will be considered to allow applicants without sufficient credit history to prove their ability to pay rent will be helpful. The same policy should also apply to persons starting their first jobs or who for other reasons have not established credit in their own names.
Unlike federal laws, California prohibits housing discrimination based on sexual orientation, age, medical conditions, disabilities that do not have a substantial effect on major life activities or which can be completely mitigated, source of income, ancestry and citizenship or immigration status. Damages and penalties for violating fair housing laws are severe. When in doubt, seek professional legal advice.
Copyright © 2001, 2008 by Martin S. Snitow. All rights reserved
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