If you are a landlord or real estate investor, you are likely familiar with the concept of “fair housing.” At each level of legislation, from federal down to local, there are laws in place that protect equality in access to housing. While these laws are an important way to protect home buyers and renters, they are not always obvious to landlords, home sellers, and real estate investors. This guide is going to take a look at one specific aspect of fair housing that is unique to Chicago and Cook County, Illinois: source of income discrimination.

Fair Housing Laws: An Overview

Before we narrow down to specifics, let’s first zoom out to talk about fair housing laws in general. As mentioned above, these laws were written to increase access to housing for all and recognize that access to housing is an important factor to an individual’s quality of life. At the largest level, the federal Fair Housing Act covers almost all housing in the United States. In the State of Illinois, housing is governed further by the Illinois Human Rights Act. Even more narrowly, housing in Chicago is governed by the Chicago Fair Housing Ordinance, and residents throughout Cook County are protected by the Cook County Human Rights Ordinance.

As these laws narrow down, they add to one another, rather than replace one another. That is to say that, if a resident is looking for a home in Cook County, the housing they seek is protected by the federal, state, and local laws.

What is a Protected Class?

Under the Fair Housing Act of 1968, housing discrimination on the basis of certain “protected classes” was prohibited. These classes, as outlined in the Fair Housing Act, are: race, color, religion, sex, familial status, national origin, and disability. What this means, in practical terms, is that in 1968 it became illegal to refuse to sell or rent housing to an individual based on one of these classes.

In the State of Illinois, the Human Rights Act includes additional protected classes, broadening anti-discrimination protections to include sexual orientation and gender identity, age, marital status, order of protection status, ancestry, military status, and unfavorable military discharge.

Most recently, local legislation (both the Chicago Fair Housing Ordinance and the Cook County Human Rights Ordinance) took housing protections even further by including source of income as a protected class.

How Do Protected Classes Impact Landlords?

 It is essential that landlords, home sellers, and real estate investors are familiar with all aspects of the relevant fair housing laws that govern in the jurisdictions where they sell, rent, or invest in homes. Because of the broad nature of fair housing laws, it is possible to commit violations without even realizing it, and consequences for doing so can be severe.

A fair housing violation occurs when a 1) member of a protected class is 2) victim to a prohibited act. Prohibited acts include:

• Refusing to sell or rent a home after making an offer in good faith

• Refusing to negotiate for the sale or rental of a home

• Discriminating in the terms or conditions of a sale or rental

• Discriminating in the services or facilities included in the sale or rental of a home

• Discrimination in appraisals or lending

• Publishing an advertisement or notice that indicates a preference for or restrictions of a particular class

• Misrepresenting the availability of a home for rent or sale

• Refusing to allow reasonable accommodations for persons with disabilities

It is important to remember that any of these acts on their own are not necessarily violations of fair housing laws. It is when these prohibited acts are applied to a member of a protected class that there is a possible fair housing violation.

As an example, a landlord may advertise for the availability of a condo in the local paper. Under federal fair housing laws, it would be a violation to indicate a preference for applicants of a certain sex. Under Illinois law, it is also a violation to refuse to rent to an individual on the basis of their sexual orientation.

Source of Income Discrimination

Locally, both the Chicago Fair Housing Ordinance and Cook County Human Rights Ordinance broadened fair housing protections to include “source of income” as a protected class. As the name indicates, this means that a person who supports him/herself and his or her family through any lawful source of income cannot be discriminated against based on where their money comes from.

 Sources of income that are protected include:

•  Child Support

• Alimony

• Temporary Assistance for Needy Families (TANF) or Public Aid

• Food Stamps

• SSI Benefits

• Unemployment Compensation

• Veterans Affairs Supportive Housing (VASH) Certificate

• Housing Choice (Section 8) Vouchers

As a protected class in these local jurisdictions, any renter or home buyer who lawfully receives income through one or more of the above sources cannot be refused access to a home because of their source of income. This law applies to any person, corporation, or firm selling, renting, or leasing any housing in Chicago or Cook County.

What Does this Mean for Landlords?

If you are a landlord, home seller, or real estate investor, this is an important point to understand. These protections for source of income are relatively new, and there have been some recent cases in which landlords were penalized for failing to follow this law.

1. It is not legal to refuse to rent a dwelling to housing choice (Section 8) voucher recipients.

2. It is also not legal to express a preference for other sources of income or to discourage applications from housing choice voucher recipients.

   For example, statements such as these are NOT permitted under Chicago and Cook County’s fair housing laws.

• You must earn at least three times the total rent amount to rent this apartment.

• This building is not set up to accept housing vouchers.

In 2017, a Chicago case demonstrated what can happen if landlords do not abide by these regulations. In Brown v. Nguyen and Nguyen (2017), landlords were found in violation of the Chicago Fair Housing Ordinance when they refused to rent a dwelling to an applicant who holds a HUD VASH certificate. In addition to being found in violation of the Fair Housing Ordinance, the landlords were ordered to pay emotional distress damages of $10,000, punitive damages of $15,000, a $1,000 fine to the City of Chicago, and $15,000 in attorney’s fees to the plaintiff. This $41,000 penalty (not to mention the landlords’ own attorney’s fees) should be a stark reminder of the importance of understanding fair housing laws.

Solve the Problem Before it Begins

As this guide has shown, there are many, many ways that landlords can violate fair housing laws, and it is possible to do so without even realizing it. To avoid costly litigation and conflicts down the road, consult with an experienced real estate attorney first. Alexis Hart McDowell of Enterprise Esquire has the experience, knowledge, and expertise to ensure that your advertising, communication, and policies all conform to local, state, and federal fair housing laws. Solve the problem before it begins by setting up an appointment with Alexis. Click here to grab a spot on the schedule.