HB 231
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 231 (Delegate Lierman, et al.)
Environment and Transportation Judicial Proceedings
Housing Opportunities Made Equal Act
This bill prohibits discriminatory practices in residential real estate transactions and the
sale or rental of a dwelling because of a person’s source of income.
Fiscal Summary
State Effect: General fund expenditures may increase for the Maryland Commission on
Civil Rights (MCCR) to investigate additional complaints, as discussed below. Potential
minimal increase in general fund revenues due to the bill’s penalty provisions.
Local Effect: The bill is not anticipated to materially affect local finances or operations.
Small Business Effect: Potential meaningful.
Analysis
Bill Summary: The bill prohibits taking the following actions because of a person’s
source of income: (1) refusing to sell or rent a dwelling after the making of a bona fide
offer; (2) refusing to negotiate for the sale or rental of a dwelling; (3) making a dwelling
otherwise unavailable; (4) discriminating in the terms, conditions, or privileges of sale or
rental of a dwelling; (5) discriminating in the provision of services or facilities in
connection with the sale or rental of a dwelling; (6) making, printing, or publishing or
causing to be made, printed, or published any notice, statement, or advertisement with
respect to the sale or rental of a dwelling that indicates a preference, limitation, or
discrimination based on source of income; (7) representing to a person that a dwelling is
not available for inspection, sale, or rental when it is available; and (8) for profit, inducing
or attempting to induce a person to sell or rent a dwelling by representations regarding the
entry or prospective entry into the neighborhood of a person or persons with a particular
source of income.
Under the bill, a “source of income” is any lawful source of money paid directly or
indirectly to or on behalf of a renter or buyer of housing, including income from (1) any
lawful profession, occupation, or job; (2) any government or private assistance, grant, loan,
or rental assistance program, including low-income housing assistance certificates and
vouchers; (3) any gift, inheritance, pension, annuity, alimony, child support, or other
consideration or benefit; and (4) any sale or pledge of property or an interest in property.
The bill also prohibits a person whose business includes engaging in residential
real estate-related transactions from discriminating against a person in making available a
transaction, or in the terms or conditions of a transaction, because of the person’s source
of income. However, a real estate appraiser may take into consideration factors other than
source of income. The bill prohibits a person from, because of a person’s source of income,
denying that person access to, or membership or participation in, a multiple-listing service;
real estate brokers’ organization; or other service, organization, or facility relating to the
business of selling or renting dwellings, or discriminating against a person in the terms or
conditions of membership or participation.
The bill also prohibits any person, whether or not acting under color of law, by force or
threat of force, from willfully injuring, intimidating, or interfering with a person’s activities
related to the sale, purchase, rental, or occupation of a dwelling, or from attempting to do
so. Existing criminal penalties relating to these activities are expanded to include the
prohibition against discrimination based on source of income.
The bill does not apply to the rental of rooms or apartments in an owner’s principal
residence if the source of income is low-income housing assistance certificates or vouchers,
as specified. The exemption for apartments is limited to an owner-occupied dwelling with
up to five rental units.
The bill neither prevents a person from refusing to consider income derived from any
criminal activity nor prohibits a person from determining the ability of a potential buyer or
renter to pay by verifying, in a commercially reasonable and nondiscriminatory manner,
the source and amount of income or creditworthiness of the potential buyer or renter. The
bill also does not prohibit a person from determining, in accordance with applicable federal
and State laws, the ability of a potential buyer to repay a mortgage loan. The bill does not
limit the rights or remedies that are otherwise available to a landlord or tenant under any
other law.
Current Law: Housing discrimination because of race, sex, color, religion, national
origin, marital status, familial status, sexual orientation, gender identity, or disability is
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prohibited. There is no provision prohibiting housing discrimination based on source of
income.
A person claiming to have been injured by a discriminatory housing practice may file
a complaint with the Maryland Commission on Civil Rights (MCCR) or file a civil action
in circuit court. If an administrative law judge (ALJ) finds that the respondent has engaged
in a discriminatory housing practice, the ALJ may order appropriate relief, including actual
damages and injunctive or other relief, and may assess a civil penalty against the
respondent. A court may award actual or punitive damages, grant injunctive relief, and
allow reasonable attorney’s fees and costs.
Willfully injuring, intimidating, or interfering, by force or threat of force, with a person’s
activities related to the sale, purchase, rental, or occupation of a dwelling, or to attempt to
do so, is a misdemeanor. A violator is subject to maximum penalties of 1 year
imprisonment and/or a $1,000 fine. If the violation results in bodily injury, the maximum
penalty is 10 years imprisonment and/or a $10,000 fine. If the violation results in death,
the maximum penalty is life imprisonment.
Background: For additional information regarding source-of-income discrimination,
please see the Appendix – The Housing Choice Voucher Program and
Source-of-income Discrimination.
State Revenues: General fund revenues may increase minimally as a result of the bill’s
monetary penalty provision from cases heard in the District Court or from additional civil
penalties assessed.
State Expenditures: General fund expenditures may increase to the extent that a new civil
rights officer is hired at MCCR to handle a potential increase in the number of housing
complaints that may be filed as a result of the bill’s provisions. MCCR advises that it
receives federal reimbursement for investigating complaints related to housing
discrimination from the Department of Housing and Urban Development (HUD) and for
investigating employment discrimination from the Equal Employment Opportunity
Commission. Any housing discrimination complaints filed on the basis of “source of
income” are not eligible for reimbursement under MCCR’s contractual relationship with
HUD, because “source of income” is not a protected class under the federal
Fair Housing Act. Accordingly, MCCR needs to ensure that investigating any additional
cases regarding source of income housing discrimination does not negatively impact its
case closure rate, which may impact federal funding. Although existing staff can
investigate a small number of additional cases, an additional officer is necessary to the
extent that MCCR receives a large number of complaints. For illustrative purposes only,
if an additional civil rights officer is required, general fund expenditures increase by a
minimum of $61,000 annually.
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The Judiciary advises that the bill’s provisions are not anticipated to have a significant
fiscal or operational impact. Similarly, the Office of Administrative Hearings advises that
the bill’s provisions can be handled within existing budget resources.
Small Business Effect: By prohibiting discrimination based on the source of a tenant’s
income, additional landlords may be subject to participation in the Housing Voucher
program, which was established as a voluntary program. Landlords participating in the
Housing Voucher program may have increased administrative responsibilities, as program
participation, which is governed by federal standards, is administered by State and local
housing authorities. For example, federal regulations require annual inspections by the
housing authorities; some housing authorities require participating landlords to have direct
deposit.
Additional Information
Prior Introductions: HB 451 of 2019 was assigned to the House Environment and
Transportation Committee, but was withdrawn. Its cross file, SB 812, was assigned to the
Senate Judicial Proceedings Committee but was also withdrawn. HB 172 of 2017 passed
the House as amended, was referred to the Senate Judicial Proceedings Committee, and
had no further action taken on it. Its cross file, SB 728, received a hearing in the Senate
Judicial Proceedings Committee, but no further action was taken. HB 759 of 2016 received
a hearing in the House Environment and Transportation Committee, but no further action
was taken. In addition, similar bills were introduced in the 2010 through 2014 sessions.
Designated Cross File: SB 530 (Senator Smith, et al.) - Judicial Proceedings.
Information Source(s): Maryland Commission on Civil Rights; Baltimore City; Caroline,
Howard, and Prince George’s counties; Judiciary (Administrative Office of the Courts);
Department of Housing and Community Development; Department of Public Safety and
Correctional Services; Office of Administrative Hearings; Department of Legislative
Services
Fiscal Note History: First Reader - February 3, 2020
rh/jkb Third Reader - March 12, 2020
Revised - Amendment(s) - March 12, 2020
Analysis by: Hillary J. Cleckler Direct Inquiries to:
(410) 946-5510
(301) 970-5510
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 Appendix – The Housing Choice Voucher Program and
Source-of-income Discrimination
Background
According to the Poverty and Race Research Action Council, 15 states (California,
Connecticut, Delaware, Maine, Massachusetts, Minnesota, New Jersey, New York,
North Dakota, Oklahoma, Oregon, Utah, Vermont, Washington, and Wisconsin) and the
District of Columbia (as of December 2019) have statutes prohibiting housing
discrimination on the basis of a person’s source of income (SOI). Numerous laws are also
found at the local level nationwide, including cities such as Chicago, New York City,
Philadelphia, Memphis, and Seattle. In Maryland, Anne Arundel, Baltimore, Frederick,
Howard, Montgomery, and Prince George’s counties, as well as the cities of Annapolis,
Baltimore, and Frederick, prohibit SOI discrimination within their jurisdictions. Under
these statutes, SOI may include almost any lawful source of money, such as benefits from
any government assistance program, private loans, gifts, pensions, alimony, and child
support; the income derived from government housing assistance (i.e., housing vouchers)
tends to be the most controversial. While some statutes expressly include the use of housing
vouchers under SOI protections, others do not. Moreover, court rulings in some states
(e.g., California and Minnesota) have held that statutes prohibiting SOI discrimination do
not apply to landlords who decline to accept housing vouchers.
Housing Choice Voucher Program – Generally
The Housing Choice Voucher Program is a program of the U.S. Department of Housing
and Urban Development (HUD) that subsidizes the cost of housing for low-income
individuals and evolved from numerous federal initiatives to provide affordable housing.
While initial efforts under the federal Housing Act of 1937 were focused on addressing the
issue of affordable housing by providing federal funding for the construction of public
housing, later legislation, such as the Housing and Community Development Act of 1974,
illustrated the shift in federal affordable housing strategies from locally owned public
housing to privately owned rental housing. The Act allowed families to select their own
housing and lease directly from a building owner through a rental certificate program. This
program was popular due to its ability to provide assistance quickly, allow families a choice
of housing, and disperse families throughout the community without automatically creating
“projects” or locations with high concentrations of poverty. Many aspects of the rental
certificate program were included in the Quality Housing and Work Responsibility Act
of 1998, which created the current Housing Choice Voucher Program.
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Households with annual incomes of 50% or less of the area median income are eligible for
the program. Under federal rules, 75% of annual admissions must be families with annual
incomes at or below 30% of the area median income. In Maryland, local housing authorities
(or the Department of Housing and Community Development (DHCD) in jurisdictions
without a housing authority) administer the program and determine a payment standard for
each area based on fair market rent guidelines issued by HUD. Once a voucher has been
awarded, eligible individuals are responsible for finding a suitable housing unit where the
owner agrees to rent under the program. A voucher recipient may choose a housing unit
that rents for more or less than the payment standard. Voucher recipients must pay 30% of
their monthly adjusted gross income for rent and utilities; housing assistance payments are
generally the difference between the payment standard and 30% of the family’s adjusted
income. If the rent is greater than the payment standard, the family must pay the additional
amount; however, if a family moves to a new unit where the rent exceeds the payment
standard, the family may not pay more than 40% of its adjusted monthly income for rent.
The local housing agency pays the housing assistance payment directly to the owner of the
property. The federal law does not require that a landlord participate in the program.
Demand for the program has traditionally far exceeded the supply of resources.
DHCD advises that as of December 31, 2019, 8,575 individuals were on the waitlist for a
housing voucher (which represents only the jurisdictions in which DHCD operates the
voucher program).
Source-of-income Discrimination Issues
The federal Fair Housing Act prohibits landlords from refusing to rent based on a tenant’s
race, color, religion, sex, national origin, familial status, or disability. Pursuant to State
law, housing discrimination based on race, sex, color, religion, national origin, marital
status, familial status, sexual orientation, disability, or gender identity is prohibited.
Although SOI discrimination is not prohibited by federal law or the law of the majority of
states, including Maryland, advocates have expressed concerns that the refusal of landlords
to accept vouchers has a disproportionate impact on minorities. According to 2018 data
from HUD, approximately 81% of voucher holders in the State were minorities.
Neighborhoods and Opportunity: A large body of research has been devoted to examining
the potential impact that access to quality neighborhoods has on individuals and families.
Many studies have focused on analyzing the Moving to Opportunity (MTO) demonstration
program, which operated in Baltimore City and four other major U.S. cities, and offered
families with children who lived in high-poverty public housing projects the ability
(via random lottery) to use their housing vouchers to move into lower poverty
neighborhoods. For example, a 2015 study from the National Bureau of Economic
Research, The Effects of Exposure to Better Neighborhoods on Children: New Evidence
from the Moving to Opportunity Experiment (2015), focused on the impacts of MTO for
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children who moved when they were younger than age 18 and concluded that the move
significantly improved college attendance rates. Compared to individuals in the
MTO control group (who did not move), these individuals also have higher incomes, live
in better neighborhoods as adults, and are less likely to become single parents.
As noted, one of the intents of housing vouchers was to allow program recipients to choose
where they live, in an effort to avoid duplicating the pockets of poverty that were created
with public housing developments. Studies evaluating whether the voucher program has
successfully promoted neighborhood integration have been mixed. The Center on Budget
and Policy Priorities analyzed HUD data regarding voucher use in 2014. According to its
findings, approximately 13% of families with children participating in the voucher program
used vouchers to live in low-poverty areas (where fewer than 10% of residents are poor).
It found that vouchers were particularly useful in enabling minority children to live in
lower poverty neighborhoods. However, 343,000 children in families using vouchers still
lived in extremely poor neighborhoods (where more than 40% of residents were poor).
A study evaluating the use of housing vouchers between 2000 and 2008,
The Reconcentration of Poverty: Patterns of Housing Voucher Use, 2000 to 2008, Housing
Policy Debate (2014), found that vouchers actually perpetuated concentrated poverty and
racial segregation in the 50 most populous U.S. metropolitan areas. The study noted that
the trends reflect a combination of preferences of voucher households and the
unavailability or inaccessibility of affordable rental housing in certain communities.
However, low-income households using vouchers were more segregated by race and
income than a comparison group of nonvoucher households earning less than
$15,000 annually. This suggests that additional constraints may face voucher households,
including a reluctance by landlords to accept vouchers and the allowable rental costs
covered by the program. While acknowledging that there are valid reasons for landlords t