Three years ago, a bill that would have forced landlords throughout New York State to accept recipients of federal Section 8 rent vouchers was vetoed by then-Governor David Paterson on the grounds that it would have placed an onerous regulatory burden on landlords and cost the state millions to enforce. However, in his State of the State message last week, Governor Andrew Cuomo indicated he’ll revive the idea as part of his own legislative program.

Cuomo’s 10-point “Women’s Equality Agenda” includes the following passage, under the heading “Stop Source of Income Discrimination”:

Female-headed households account for 76 percent of all housing choice vouchers issued, including Section 8 vouchers. Many households suffer discrimination by landlords who are unwilling to rent to voucher holders.

For housing vouchers to be meaningful, enough units must be made available for tenants. Providing this protection is invaluable in maximizing a voucher family’s ability to secure safe and decent housing.

Governor Cuomo will propose amending the Human Rights Law to prohibit landlords from discriminating against tenants based on lawful sources of income.

As noted in a December 2009 legal analysis at this realtors’ site, Congress intended participation in the Section 8 program, enacted in 1976, to be voluntary for landlords. Courts are divided on whether the federal law can be expanded or overridden by local laws mandating acceptance of Section 8 vouchers. The New York City Council passed such a law in 2008, overriding the veto of Mayor Michael Bloomberg. While the law was “well-intentioned,” Bloomberg said, it “would force private landlords to participate in a public program even at a cost to their bottom lines and has the potential to result in increased rents in our most affordable housing stock.”

Bloomberg added that “the onus should be on the government to make the [Section 8] program more attractive for private sector participation, not the other way around.”

The issue more recently has been a focus of controversy in Westchester County. A federal judge is trying to force County Executive Rob Astorino to “promote” a local Section 8 anti-discrimination law, even though Westchester is otherwise complying with the terms of a settlement with the federal government requiring construction of 750 units of subsidized affordable housing over a seven-year period.

In 2010, the state Legislature passed a state law (A.10689-a) that would have made it illegal for landlords to discriminate against potential tenants based on their source of income, including Section 8. In rejecting the measure (Veto 6766 of 2010), Paterson cited “the heavy burden it would place on small New York property owners at a time when they are struggling to pay theirmortgages and maintain their homes.” He added:

When a landlord accepts a Section 8 voucher, the unit is taken off the market whileinspections and paperwork are completed. Rent is not collected on the unit during this time, which can total three months or more. In addition, housing units are subject to annual inspections and Section 8 payments are suspended until violations are rectified. A small landlord may have no funds to  pay for repairs while payments arebeing withheld. Even when violations are the result of a tenant’s actions and no fault of the landlord, landlords are not allowed to bring non-payment cases to Housing Court for the Section 8 portion of the rent.

As for the state financial impact, Paterson said the bill could “substantially increase the caseload of the Division of Human Rights, requiring a substantial commitment of new resources and the hiring of additional staff.” Based on New York City’s experience, Paterson said the resulting upsurge in complaints to the state Division for Human Rights could cost the state $2.7 million.

It’s not clear whether Cuomo intends to introduce a bill that would exempt small landlords. Even if he does, however, the law could be counterproductive in cities struggling to preserve marginally middle-class neighborhoods.