In October, the Washington, D.C., attorney general’s office announced the largest civil award in a housing discrimination case in U.S. history. The lawsuit was filed in 2020 against D.C. real estate firms DARO Realty, DARO Management Services and Infinity Real Estate, LLC, which oversaw investing for companies. A judge ruled that DARO would have to pay $10 million to settle a lawsuit brought by holders of Section 8 vouchers, a federally-funded payment system that allows low-income people to rent in the private market.

What’s more, DARO had to dissolve its property management business and certain members of leadership who were named as defendants were permanently banned from owning property management businesses in D.C. The company’s president was required to forfeit her real estate licenses for 15 years.

The sweeping ruling brought encouragement to agencies struggling to enforce laws against voucher discrimination. And it suggested that low-income families using the vouchers could eventually gain a fighting chance in a private market rife with discrimination.

“It sort of sent shock waves through our advocacy world,” says Deborah Thrope, deputy director of the National Housing Law Project. “D.C. was a really exciting one, because the settlement was so large. It’s going to take a settlement like that [to] send the message to landlords that they cannot discriminate.”

The judgment also augured well for other civil rights lawsuits filed on behalf of Section 8 voucher holders, including a California lawsuit filed earlier this year and a sweeping New York City lawsuit filed by the nonprofit Housing Rights Initiative, which named 77 brokerages and property firms as defendants.

Established by the Housing and Community Development Act of 1974, Section 8 vouchers allow low-income tenants to pay 30% of their income toward rent as long as the rent is below a payment standard set by HUD. The rest is paid by the federal government. More than 2.2 million units across the country are leased with Section 8 vouchers, and HUD updates its calculation of fair market rents each year, which public housing authorities use to determine their payment standards.

But source of income discrimination has long restricted where voucher holders can live and made it difficult to find housing at all. Some states and cities have enacted laws banning discrimination based on source of income, such as vouchers, including 19 states and D.C. On the other side of the spectrum, three states have laws that forbid their local governments to enact Section 8 protections: Arizona, Texas and Indiana.

A paper published last year by the Furman Center looked at the effect of source of income discrimination laws on the housing market. The report found that in jurisdictions that enacted such laws, voucher holders were more often able to move to more socioeconomically advantaged areas. (The study did not look at whether more voucher holders were able to use their vouchers because of the laws.)

An Urban Institute paper from last October found similar results, but cautioned that it took four to five years for changes to take effect.

“If you look at where vouchers are generally, they’re clustered in the poorest parts of the city,” says Daniel Teles, a housing researcher at the Urban Institute who co-authored the paper. “You would hope that by getting rid of landlord discrimination that would make it easier to use the vouchers in more desirable neighborhoods… . That is true, but not immediate.”

“We think that has to do with the difficulty in enforcement,” Telles adds.

The onus mainly falls on local governments to file civil suits, as low-income tenants typically do not have the resources to sue landlords breaking the law. They’re more often focused on finding someone who will accept their voucher.

“It takes time and resources to not only identify that you have a legitimate claim, but pursue it,” Thrope says. “It’s really exciting to see state agencies bringing higher impact cases, because it sends a very clear message to landlords…that discrimination will not be tolerated.”

The evidence was particularly egregious in the D.C. case. One DARO employee and defendant had stated in an email to company president Carissa Barry: “No voucher/sec-8 – find ways to reject, applicant must meet every requirement (credit, security deposit, income, etc), in the case that we have to lease to them which we should find every way out of, don’t put in renovated units.”

Barry herself had written to another defendant, “I am doing everything I can to reduce if not eliminate the section 8 program from our communities. We have tightened our screening criteria as much as humanly possible…”

The California case is on a relatively smaller scale, focusing on two landlords discriminating against one tenant, rather than systemic discrimination across a large portfolio.

A law that went into effect in 2020 added Section 8 housing vouchers to a pre-existing source of income discrimination law. The state’s civil rights department says it fielded complaints and issued warning notices to violators in the years since the law was enacted. Some brokers had even advertised on their websites that they did not accept the vouchers, a sign that some in the industry either weren’t aware of the laws or openly flouted it.

California’s Civil Rights Department filed its first lawsuit enforcing the law in January. The case involves a tenant who was illegally being charged a surcharge to use her voucher. When the tenant told her landlords, Carlos and Linda Torres, that she would no longer be paying the surcharge, they told her they wouldn’t accept her voucher and evicted her.

When the tenant told her landlords this was illegal, she was met with harassment and threats of violence, according to the city’s complaint. The landlords illegally locked her out of her home, causing her to lose access to “medical equipment, family heirlooms, and photographs,” per the state agency.

“Litigation is one tool, it’s one arrow in the quiver of civil rights enforcement to ensure that when the legislature makes a promise to us in the form of a law, that we’re keeping that promise,” Kevin Kish, director of California’s Civil Rights Department tells Next City/Shelterforce.

Kish says the case was particularly strong because the tenant, who is disabled, was being discriminated against on multiple fronts. According to the complaint filed by the department, “Defendant Linda Torres approached Ms. Gonsalves at the Subject Property in a threatening manner and called Ms. Gonsalves a b**ch, the n-word, and other derogatory statements. Defendants perceived Ms. Gonsalves’ race and color as Black.”

The complaint alleges that the landlords violated the Ralph Civil Rights Act, a state law that forbids acts of violence due to race, sex, ability and other protected categories; the California Fair Employment and Housing Act, which requires landlords to provide reasonable accommodation for tenants; and the Unruh Civil Rights Act, a state law that outlaws housing discrimination across federally protected categories.

“There’s a suite of civil rights protections that we allege were violated in this particular action and I think that speaks to the reality of a lot of people’s experience in the world,” Kish says of the agency’s choice to pursue the lawsuit.

While this is the first lawsuit enforcing the Section 8 law, it’s not the first enforcement action taken by the Civil Rights Department. Last October, the California agency deployed civil rights testers to attempt to rent housing using Section 8 vouchers and found widespread discrimination. The agency said 47.5% of the 80 properties their testers approached discriminated against voucher holders.

But most of those cases were settled out of court, Kish says. In the Torres’ case , the defendants had been warned about potential legal action but still did not comply with the law, according to Kish. The state is seeking a cash judgment for the tenant as well as changes from the landlords.

In contrast to the California and D.C. lawsuits, the New York City lawsuit was filed by a nonprofit, Housing Rights Initiative, based on evidence gathered through civil rights testing. While some of the defendants named in the lawsuit outright stated to the testers that they didn’t accept Section 8 vouchers, most are named in the suit because they had minimum requirements that no voucher holder could meet.

Specifically, many of the brokers named in the complaint told voucher holders that their annual income needed to be 40 times the monthly rent in order to rent an apartment. While this requirement is common in New York City’s private market, it is not legal to apply this standard to voucher holders.

“There are few apartments, if any, on the New York City housing market that would be available to voucher holders if landlords applied a forty-times the rent minimum income requirement,” HRI states in the complaint. As an example, HRI points out that a $1,500 a month apartment would require a $60,000 annual income, well above the income threshold to receive Section 8.

In 2021, HRI went to the state attorney general with allegations that the real estate agency Compass was refusing to accept Section 8 vouchers. The company reached a settlement with Attorney General Letitia James’ office to change its practices.

New York City has a particular need of enforcement against voucher discrimination. About 10,000 New Yorkers living in homeless shelters hold Section 8 vouchers but cannot find an apartment. The taskforce assigned to fight voucher discrimination in the city has been chronically underfunded and had no staff as of last year, despite the fact that New York has more Section 8 voucher holders than any other city. (On Wednesday, JoAnn Kamuf Ward, deputy commissioner of policy and external affairs at NYC’s Human Rights Commission told WNYC’s Brian Lehrer that there were dedicated source of income discrimination attorneys within her agency.)

But most cities and states have a long way to go to enforce their voucher discrimination laws. “I don’t think frankly, any state or locality with a source of income law gets a gold star at this point,” Thrope says.

She says the federal government is also putting voucher holders at a disadvantage because they set the fair market rent too low. Another issue is inspections: Section 8 vouchers require an inspection of the property by the administering agency before a room can be rented. This can take weeks — and landlords are often impatient, not wanting to hold their rooms off the market when they could be collecting rent.

A bill in the California legislature could address this issue by sending some grant money to landlords to hold apartments for a few weeks.

“There’s a number of local policies that need to be put in place to make [voucher holders] as competitive as other tenants in this very, very tight rental market,” Thrope says.

Until then, she believes, major lawsuits like the ones in California, New York City and D.C. could lead to improvements. “It’s really these higher impact cases that change the landscape for the better for families nationwide.”

This story was co-published in collaboration with Shelterforce, the only independent, non-academic publication covering the worlds of affordable housing, community development and housing justice.