Denver is almost ready to ban “source of income discrimination” for housing, and landlords are upset

But it’s not done yet.

The view from the Saint Francis Apartments on Washington Street in Capitol Hill, May 1, 2018. (Kevin J. Beaty/Denverite)

The view from the Saint Francis Apartments on Washington Street in Capitol Hill, May 1, 2018. (Kevin J. Beaty/Denverite)

(Kevin J. Beaty/Denverite)

staff photo

UPDATE: The City Council voted 11-2 to approve this bill during their meeting on Monday, August 6. District 2 Councilman Kevin Flynn and District 5 Councilwoman Mary Beth Susman voted no on the bill. They said during a discussion prior to the vote that they felt the bill needed more work, with Flynn adding he wanted to take a closer look at it. Susman said the bill might not be “fully baked.”

Denver’s elected leaders may send a message to landlords around the city: Open your doors a little wider.

Currently, property owners in Denver can refuse to accept payments from the federal government’s housing assistance programs. On Monday night, the Denver City Council signaled that it wants to end that practice.

The governing board gave initial approval for a bill that would ban “source of income discrimination” in a 10-1 vote. It returns for a final vote next week. A dozen states and dozens of cities already have similar laws. 

Supporters said that the city’s Section 8 renters face rejection after rejection from landlords. Often, rental advertisements declare that vouchers aren’t welcome. It’s an obstacle for people who have already won a lottery to get the vouchers.

“You have a literal pile of money that someone is willing to give you, and you turned them away,” said Tiana Paterson, state and local policy director for Enterprise Community Partners, at Monday’s meeting.

Meanwhile, landlords lined up to say that the rules would put a new burden on them.

Some threatened to sell their properties. And Councilman Kevin Flynn voted against the bill, saying he wanted to see more protections for landlords.

At a recent city committee meeting, Jim Lorenzen read off the first and last names of several renters at the buildings his company manages, and he detailed how long it took for their rent payments to arrive.

“We can’t wait months for Section 8 payments from (Denver Housing Authority),” he said at the earlier July 18 meeting.

Lorenzen, the president of Cornerstone Apartments, was one of many property managers and owners who lined up over recent weeks to protest the bill.

Later, Lorenzen acknowledged that it “may have been a mistake” to disclose renters’ names. But he was trying to make the problems real, he said. His landlords on average wait 45 “non-revenue” days for Section 8 payments to start for new tenants, he said, compared to 19 days for other renters.

In some cases, DHA has cut off payment without warning, he claimed. “My owners are hand-to-mouth,” he said. “This is not a renter issue. This is a process issue.”

DHA says it takes two weeks to deliver the average Section 8 payment for a new rental, which is direct-deposited into landlords’ bank accounts. The agency has to ensure that the rent is “fair,” and DHA must send someone to inspect the property.

Other landlords said the rules could be trouble for small businesses. Chelsea Thomas, who owns a share of six homes around Villa Park, asked whether she would face unfounded complaints for choosing one applicant over another. “Who’s going to stand on my side?” she asked on Monday night at council.

Eric Hiivala said on Monday that the bill could represent “discrimination against business owners,” who now would have to “have a silent partner which is forced upon us,” referring to the government.

But on the flip side, Lorenzen said, people with vouchers tend to rent for longer periods.

The council made a few concessions to landlords.

The new law would exclude duplex owners who occupy one of the units in their building. It also would exclude people who only rent out a single unit under an amendment from Councilman Jolon Clark.

Councilman Rafael Espinoza said the exclusion was a “weird distinction,” and called on the council to apply the new law to everyone, and to fix whatever problems that causes.

“It’s part of my frustration with this going so far, but not all the way,” he added later. The city government already has massively benefited homeowners with its spending on improvements, he said.

“We are losing families like they’re going out of style,” he said, referring to renters.

Councilwoman At-large Robin Kniech proposed the original ordinance. She said that the bill wouldn’t force landlords to accept lower rents for Section 8 vouchers. It only forces them to consider voucher tenants if their vouchers are big enough to cover the rent.

“It’s about being considered. It’s about a chance to compete,” Kniech said. (Complaints would be handled through the city’s Anti-Discrimination Office.)

She pushed back against landlords’ concerns that they could lose money if a Section 8 tenant damaged a property. Landlords can still require the same deposits from Section 8 renters as from anyone else.

But other members suggested that the city could create a special fund that would cover certain damages for landlords, as other governments have done.

“For me, it’s not balanced against the risk that gets shifted to property owners,” Flynn said. ” … A landlord cannot recover damages from a person’s child support, or a housing voucher.”

Violators of the proposed law would face a fine of up to $5,000. But they can avoid that by making a comparable unit available, or by complying with an order to end the practice. Councilwoman At-large Debbie Ortega suggested counseling services for landlords.

Other council members asked whether landlords could reject voucher tenants based on “legitimate business reasons,” especially if competing tenants could pay more quickly. Kniech said that may be allowed.

Meanwhile, Ismael Gurerro, executive director of DHA, said that his agency and the federal government both were trying to speed up the process.

The bill also requires that landlords accept other forms of monetary income, including gifts, bequests, annuities, life insurance policies, government payments and disability benefits.

However, even with the bill, Section 8 renters will have a much bigger challenge: The program doesn’t pay enough rent to cover the bill for many apartments in the Denver. About 12 percent of the city’s 6,000-plus vouchers are being used outside of the city.

Kniech said it was a “cumulative” effort. It’s “about the idea that there are barriers that we can lower,” she said.

Denverite reporter Esteban L. Hernandez contributed to this story.