AUSTIN, Texas (CN) – The city of Austin claims in court that a Texas law unlawfully overrides its authority to enforce source-of-income protections barring discrimination against recipients of federal housing assistance.
The city sued Texas and Gov. Greg Abbott in Austin federal court on Tuesday, alleging violations of the U.S. Constitution’s Supremacy Clause.
Austin says that the disputed law – Section 250.007 of the Texas Local Government Code – “largely eliminates the city’s authority to protect local residents who pay for housing with federal housing choice vouchers.”
The city’s lawsuit cites the federal Housing Choice Voucher, or HCV, program as an example of why protections are necessary.
The HCV program, previously called Section 8, helps “very low-income families to afford decent, safe, and sanitary housing,” according to the program’s website.
Housing choice vouchers are administered locally by public housing agencies, which pay a subsidy directly to the landlord on behalf of the participating family. The family pays the difference between the actual rent charged by the landlord and the amount subsidized.
In Austin, several thousand people and families have been awarded vouchers under the HCV program, but many local landlords refuse to rent their properties to HCV holders, the city claims.
“Thus, despite being able to pay for housing with federally-guaranteed benefits, HCV holders are often denied housing in higher opportunity neighborhoods in the city, including housing in neighborhoods with higher quality schools and lower rates of crime,” the complaint states.
The diminished housing choice means that a majority of voucher holders are segregated to lower-opportunity areas of the city. This disproportionately impacts African-Americans, Hispanics, children and disabled individuals, the city claims.
In April 2014, the city approved a resolution for an ordinance to provide fair-housing protections to HCV holders, based on a report by the Department of Housing and Urban Development showing that source-of-income laws could improve housing access for HCV holders. Austin amended its fair-housing law to prohibit discrimination against renters based on their source of income.
The Austin Apartment Association, representing the local rental housing industry, immediately challenged the city’s fair-housing ordinance in a lawsuit filed the day after it was passed.
The AAA claimed in its Travis County lawsuit that the ordinance was more restrictive than federal and state law because neither the federal Fair Housing Act nor the Texas Fair Housing Act protect people based on source of income.
The group argued that the ordinance “creates a special class of residents with more rights and fewer responsibilities than other residents” and “burdens property rights in such a substantial manner so as to constitute a taking of property and violation of due process rights.”
The AAA lawsuit was later removed to federal court, where U.S. District Judge Sam Sparks ruled in favor of the city and denied injunctive relief to the AAA.
“[T]he ordinance advances an obviously legitimate government interest: ensuring low-income persons—many of whom are racial minorities, children, disabled, or elderly—have access to affordable housing (and thus to better schools and safer neighborhoods) throughout the City of Austin,” Sparks wrote in his February 2015 decision. (Parentheses in original.)
Austin says that after Sparks’ ruling, the Texas Legislative responded by passing Senate Bill 267, which specifically targeted the city’s ordinance.
Gov. Abbott signed SB 267 on June 19, 2015. It was codified as Texas Local Government Code Section 250.007 and became effective Sept. 1, 2015.
Section 250.007 states: “Except as provided by this section, a municipality or county may not adopt or enforce an ordinance or regulation that prohibits an owner, lessee, sublessee, assignee, managing agent, or other person having the right to lease, sublease, or rent a housing accommodation from refusing to lease or rent the housing accommodation to a person because the person’s lawful source of income to pay rent includes funding from a federal housing assistance program.”
The state law effectively limited the protections of Austin’s ordinance to HCV holders who are military veterans.
In this week’s lawsuit, the city says it lost a means to redress discrimination and promote fair housing.
“Due in part to the limitations on local authority imposed by Section 250.007, HCV holders—including a disproportionate number of black and Hispanic residents, children, and disabled individuals—do not have access to housing in many of the higher opportunity areas of the city,” the lawsuit alleges.
Austin argues Section 250.007 violates the Supremacy Clause because it obstructs the objectives of Congress to promote decent housing for low-income families and fair housing choice.
The city seeks a declaration that the state law is unconstitutional and an injunction stopping Texas from enforcing it.
Austin is represented by Michael Siegel in its law department.
The Texas Attorney General’s Office did not immediately reply Wednesday to a request for comment on the lawsuit.