Chicago Disparate Impact Housing IssuesJeffrey Ross

Seyfarth Shaw LLP

July 25, 2013

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City of Chicago

The Chicago Fair Housing Ordinance generally prohibits housing discrimination on similar bases as federal and state law.

It also prohibits discrimination on additional bases, such as “source of income”, defined as “the lawful manner by which an individual supports himself and his or her dependents.” Chicago Muni. Code § 2-160-020(n).

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Cook County

The Cook County Human Rights Ordinance contains the same prohibition against source of income discrimination as the City of Chicago Ordinance.

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Housing Voucher Programs

The Chicago Housing Authority (CHA) administers two rent subsidy programs for low income persons:• the Housing Choice Voucher Program (aka “§8”)• the Mobility Program (§8 on steroids)

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Housing Voucher = Source of Income

The Chicago Commission on Human Rights (CCHR), with court approval:

• has found housing vouchers to be a protected “source of income,” and as a result,

• required landlords to participate in government sponsored housing voucher programs. See e.g. Godinez v. City of Chicago Comn’n on Human Relations, 352 Ill. App. 3d 87 (Ill. App. Ct. 2004).

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Disparate Impact Claims

The CCHR has held that a disparate impact claim is viable under the Chicago Fair Housing Ordinance. See Campbell v. Brown and Dearborn Parkway Realty, CCHR No. 92-FHO-18-5630 (Dec. 12, 1992).

Question: Is the CCHR required to follow the new HUD disparate impact regulations?

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Income to Rent Screens

The CCHR has held that a neutrally applied income-to-rent screen, where the only identified income was Social Security benefits, does not constitute source of income discrimination. Jackson v. Wilmette Realty and “Mike,” CCHR No. 99-H-32 (Sep. 27, 1999).

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Income to Rent Screens

The CCHR has not addressed income to rent screens with respect to housing voucher holders.

But multiple pending CCHR complaints against multiple Chicago landlords allege that income-to-rent screens have an unlawful disparate impact on voucher holders.

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Step 1 - Disparate Impact?

Does an income test disproportionately screen out voucher holder applicants?

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Step 2 - Business Need?

Can the landlord show a legitimate business need for the income screen?

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Step 3 - Equally Effective Alternative?

Is there another income test, or other screen, that would satisfy the landlord’s legitimate business needs but with lesser adverse impact on voucher holder applicants?

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Size of Voucher

Does the income screen analysis change if the voucher covers:• Part of the rent?• All of the rent but not all of the additional rental costs?• All of the rent and all of the additional rental costs?

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Credit Checks

What about credit checks for voucher holder applicants?

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Other Policies

What about a policy that requires an approved applicant to sign a lease within 72 hours?

What about other “neutral” policies?

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