SOURCE OF INCOME DISCRIMINATION

Proportionate Rent for Income Requirement

Landlords may require that applicants make a certain amount of income to apply for a rental unit. For example, a landlord may require that applicants prove that they make at least twice the monthly rent each month. For individuals with subsidies, this can seem daunting.

However, California requires that any income requirements be based upon the portion of the rent the tenant is responsible for paying. In the case of a housing subsidy like Section 8, this may result in a significantly reduced income standard. For example, if a unit rents at $2500, but an applicant is only responsible for paying $200 under their housing subsidy, the landlord must use the $200 amount for any income requirements. If the landlord requires an income that is at least twice the rent, the applicant only needs to show an income of at least $400 per month. This proof can include work payments, benefits, or other types of income.

For more information on income requirements and Source of Income Discrimination, please review our Fair Housing Tip on Source of Income Discrimination or our Fair Housing Presentation. You can also review the California restrictions on Source of Income Discrimination in the California Government Code (Cal. Gov. Code § 12955).

Alternatives to Credit History

In California, landlords may run credit history checks on individuals who apply for housing. For individuals with little to no credit history, or individuals with poor credit scores, these checks can pose additional barriers to securing housing. Individuals who qualify for subsidies are more likely to have poor credit because of their limited income, which makes credit checks disproportionately prohibitive.

However, California now requires that landlords allow applicants with housing subsidies to provide alternative evidence of their ability to pay rent. This alternative evidence can be provided at the applicant’s discretion, and the landlord must use the evidence in place of the applicant’s credit history.

The alternative evidence only needs to show the applicant’s ability to cover their portion of the rent under their subsidy. For example, if an applicant’s rent will be $2500, but the applicant is only responsible for paying $200 under their housing subsidy, they only need to provide evidence that they can cover their $200 portion each month. The landlord must consider this proof instead of the applicant’s credit history.

Alternative evidence can include any lawfully verifiable evidence, such as: proof of government benefit payments, pay records, bank statements, etc.

For more information on income requirements and Source of Income Discrimination, please review our Fair Housing Tip on Source of Income Discrimination or our Fair Housing Presentation. You can also review the California restrictions on Source of Income Discrimination in the California Government Code (Cal. Gov. Code § 12955).