While to the naked courtroom eye it seemed that U.S. District Judge Sam Sparks – who charged the city of Austin with "bullying" property owners during a late January court hearing – would side with landlords in the case against the city's source-of-income discrimination ordinance, his Feb. 27 ruling instead found against the plaintiffs. The "Court finds the [Austin Apartment] Association has failed to demonstrate a substantial likelihood of success on the merits of its claims, and therefore [denies] the motion for preliminary injunction," Sparks concludes in his 25-page ruling.
Enacted by City Council in December, the ordinance amends city code to include "source of income" users as a protected class of tenants, alongside race, age, sexual orientation, and religion. The proposal is meant to broaden housing opportunities for the working poor, the disabled, veterans, and the elderly by requiring landlords to accept recipients of child support or government subsidy, including the U.S. Housing and Urban Development's Housing Choice Voucher program, commonly referred to as Section 8. As Sparks himself acknowledged, the need appears high – a 2012 Austin Tenants' Council survey found that 91% of private landlords across five area counties refused to accept Section 8 vouchers; Council concluded that landlords' refusal to accept these renters "drastically reduces the effectiveness of the program."
Following enactment, the Apartment Association quickly filed suit to obtain a preliminary injunction and a temporary restraining order, claiming the ordinance would force property owners to contract involuntarily with the federal government's "historically troubled" HUD program while imposing complex and costly bureaucratic requirements. The court granted the TRO, delaying the ordinance from taking effect on Jan. 12, as scheduled.
But in a reversal surprising to onlookers, who heard an often irritated Sparks call the ordinance "troublesome" in his courtroom and chastise the city for prompting a "dog and pony show" with its witness roster, the judge rejected the AAA's central claims: that the ordinance is preempted by state and federal housing law, that it unconstitutionally burdens the freedom to contract, and that it amounts to a violation of due process.
"To date, the Association's argument has been rejected by every court which has confronted it. ... The Court can see no reason to swim against the current," Sparks wrote, citing cases from New Jersey, Connecticut, and Massachusetts. The ordinance does, he opined, help support the federal housing program's objective of remedying housing shortages for low-income renters and "exhibits the essential features of fair housing law." It also advances an "obviously legitimate government interest" by ensuring that 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." The record, wrote Sparks, shows that Section 8 participants "suffer serious discrimination in the Austin private housing market," and those who do secure housing are "concentrated in the poorest areas" of the city. While he did concede that the rule may impose some additional cost on landlords, that consequence fails to outweigh the need for the ordinance.
"We are very, very excited. This is going to open up much-needed housing so people in Austin can a have choice of where they live and not be locked into a couple of zip codes," Austin Tenants' Council Executive Director Kathy Stark told the Chronicle. "It's tough finding housing as it is right now with rents so high, and it's been twice as hard for Section 8 holders." Stark said she was "surprised" by Sparks' decision considering his critical line of questioning toward the city. "The impression I got when I listened in court was that the judge was not particularly pleased with the ordinance," she said. "I was obviously wrong."
The Apartment Association – undeterred by Sparks' firm opinion – filed a motion on March 2 for an injunction on enforcement, pending appeal to a higher court, largely repeating the same grounds Sparks rejected. They continue to claim landlords will "suffer imminent economic harm and risk and uncertainty in the rent of their property."
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