What is the Source of Income Discrimination Law?

Colorado has significantly changed its source of income discrimination laws, and it is critical that all landlords understand these changes.

The fight against Colorado’s discrimination in housing is ongoing. While legal protections that ban income-based discrimination have been in place since January 2021, there are still complaints of discrimination today. It is not uncommon for individuals who rely on federally funded vouchers to secure housing to face many types of discrimination, including the refusal to accept rental vouchers or high-income requirements. New legislation is trying to address these income barriers and protect renters from discrimination.

What are Housing Vouchers?

Section 8 of the Housing Act of 1937 provides assistance to low-income households that require rental housing. The housing voucher program allows people to move anywhere in the United States without losing housing assistance if they reside in the jurisdiction of a public housing agency that issued the voucher when they applied for benefits. While Section 8 is a federal law, Colorado has recently enacted changes regarding these vouchers, prohibiting landlords from discriminating against potential tenants who use them.

The New Laws on Source of Income Discrimination

Colorado’s legislature has been taking steps to curb discrimination based on income in the past few years. In January of 2021, House Bill 20-1332 went into effect. This law requires landlords with over three rental units to accept housing vouchers. Landlords can no longer reject potential tenants based solely on the fact that they use federal aid.

Regardless of those legal protections, renters continued to report that landlords refused to accept the vouchers. Again, Colorado’s legislature tried to strengthen the laws once again with Senate Bill 23-184. This law took effect in August 2023, and under it, the minimum income requirement is capped at 200% of the cost of rent. This law lowered the income-to-rent ratio barrier and increased voucher holders’ access to housing.

How Does the New Law Affect Landlords?

Although the new laws were intended to address discrimination based on sources of income, there has been some backlash from landlords. The recent changes in the law have increased income requirements for renters, allowing them to spend half of their income on rent. Landlords have argued that this is going to drive up the price of rent in the market, which could potentially lead to more defaults.

Some critics have also argued that a better solution to the issue would be to increase the value of the vouchers, which would make the housing voucher program more attractive to landlords.

Our Landlord-Tenant Lawyer in Colorado Can Ensure Compliance

The landlord-tenant laws in Colorado are always changing and if you have rental units, it is imperative that you keep up to date with them. If you do not, you could face serious penalties. At Ceglian Law, our Colorado landlord-tenant lawyer offers a lease package that will ensure you remain in compliance so you do not face penalties for violations. Call us now or fill out our online form to learn more about our lease package and how it can help you and your tenants.