NYC NOW - The Court Ruling That Could Make NYC Housing Vouchers Harder to Use

Episode Date: March 16, 2026

WNYC reporter David Brand joins us to explain why Mayor Zohran Mamdani is pausing New York City’s private tax lien sale program, which allows the city to sell unpaid property tax and water debt to private investors. Brand also breaks down a court ruling that struck down a state law banning discrimination against renters who use housing vouchers. Got any questions, comments or story ideas? Send us a message at [e-mail]

From WNYC, this is NYC Now. I'm Jene Pierre. Many New York City renters face discrimination from landlords who refuse to rent to them once they learn that they're using a housing voucher to pay a portion of their rent. On today's episode, we look into a recent court ruling that could weaken one of the main legal protections meant to stop that kind of discrimination. But before we get into that, here's a couple news headlines. Mayor Zora Mamdani is establishing the city's first ever office for LGBTQIA Plus affairs. Taylor Brown is director of the new office, making her the first openly trans person to head a New York City office.

Now more than ever in this moment, it is so critical, I think, to have trans leadership because New York City is where the LGBTQ civil rights movement started. The office will be tasked with examining how social services can benefit queer people who suffer higher rates of homeless, and job insecurity. The new office will also work to safeguard legal protections for queer people amid federal rollbacks on previously established rights. Rising energy costs continue to plague New York. And Governor Kathy Hockel says the Trump administration isn't helping. Surging power demands are outpacing existing supplies, driving up costs.

The governor wants to boost renewable energy sources like solar, wind, and nuclear to help meet that demand. But Hockel says her plans have been hampered by federal actions. It's maddening. I've got a plan to transition to renewable energy, and they eliminate the tax benefits for wind and solar, and then they kill a project that's just about to power about a half a million homes in Brooklyn.

Hockel says her administration continues to evaluate different ideas for mitigating energy bills. One proposal, released in the State Assembly, would hand out rebate checks up to $500 based on household income. Mayor Mumdani is halting the city's private tax lien sale program. That's a system the city has used for decades to collect unpaid property taxes and water bills by selling that debt to private investors. Last week, the city expressed concerns over predatory debt foreclosures. WMYC and Gothamist reporter David Brand is here to break it all down.

Hey, David. Hey, Janay. Can you first explain the tax lien sale for us? I did my best here, but tell us how does that system work? Yeah, so about 30 years ago, the city decided to get out of the foreclosure and debt collection business. And so in 1996, they started this new process to sell property owners' unpaid tax liens and also other things like water debt or emergency repairs if the city housing agency has to come in and bill a landlord for repairs. That becomes a debt. To sell those to a private

investor-backed trust. And that trust then attempts to collect the unpaid bills. while hitting homeowners with additional fees. So it can really increase pretty quickly the amount the property owner owes. Yeah. And as I mentioned, this program has been controversial for a while now. Why do critics say it can put homeowners at risk? Well, it's been criticized for a number of reasons. First, it puts people at the mercy of these private debt collectors

and can inflate their debt with all these added fees. You know, they try to get into payment plans if they violate those payment plans or fail to make those payments, it could expose them to foreclosure and losing their property for amounts that are typically much, much lower than the value of that property. You know the saying, yesterday's price is not today's price. Classic saying. So the city can sell a lien to this trust if the homeowner owes as little as $5,000 in property taxes or if condo owners and other property owners owe as little as $1,000 in water debt.

It could also be bad for tenants if their landlord is on this list because they, That shows speculators and investors who is vulnerable and maybe they can get a discount on a building and then might try to evict the tenants. And the tenants really have no control there. And it's also been criticized for disproportionately affecting homeowners of color, especially in predominantly black sections of Southeast Queens in central Brooklyn. Mamdani himself called the tax lien system racism in a campaign policy outline during his run for mayor. And now that the mayor is pausing, it. I mean, what happens next for the city and for homeowners who owe those debts? That's a great question. I mean, it looks like they'll get at least a temporary reprieve.

He says he's going to suspend the sale for at least six months while they review alternatives and maybe create a new kind of structure here. Montani is facing some criticism for suspending the debt collection tool, though, because he's at the same time saying the city has a budget gap. He's threatening to raise property taxes. if state lawmakers don't enact higher tax rates on the wealthiest New Yorkers. So some budget watchdogs and fiscal hawks are saying like, you're complaining about a budget gap and yet you're suspending this tool for getting some money back for the city. So that is, you know, a burgeoning issue for him. But we'll see what happens in the next few months.

You know, there's a lot of ideas of what another system could look like, how the city could collect the debts itself without empowering these private agencies to go after. people and really put them at risk of foreclosure. So that's something we'll be reporting on. Yeah. Thanks, David. After the break, we stay with WMYC Housing Reporter David Brandt to break down a court ruling that could weaken protections for renters who rely on housing vouchers across New York. Stay close. Welcome back. New York judges have struck down a key state law meant to protect renters who rely on housing vouchers. Housing voucher programs are designed to help low-income households afford housing by covering part of their rent. Tenants usually pay about 30% of their income, while the government

covers the rest. But many renters say they still face discrimination from landlords who refuse to rent to them once they learn a voucher will be used. A recent court ruling could weaken one of the main legal protections meant to stop that kind of discrimination. I'm back with WNYC housing reporter David Brand to help walk us through this decision and what it can mean for renters across New York. Hey, David. Hey, Jane. All right, let's start with the ruling. What did the judges actually decide here? This is a ruling from the third appellate division in upstate New York. That's kind of like the middle tier of New York's court system. And so here a panel of five appellate judges struck down state law that prohibits discrimination against tenants based on their source of

income, basically how they pay the rent. And in this case, if they pay the rent, was Section 8 housing vouchers. The judges said that the state law violates landlord's constitutional rights because the Section 8 program requires building safety inspections and for landlords to potentially share financial records. The landlord in this case, who they sided with, said that those requirements could lead to an illegal search, which would be contrary to his Fourth Amendment rights. Now, you know, this story really caught me off guard because we often don't hear this is against the landlord's rights here. It's always, you know, the tenant, the tenant. Were you surprised by this at all? I'd been tracking this case for a while. So to step back, the attorney general sued the landlord, and that's the landlord's response in court saying this could be lead to a legal search and seizure.

And I think a lot of tenant advocates were pretty confident that that initial ruling would be overturned and were caught off guard. And so I was somewhat surprised that this resulted in an unanimous decision the way it did. Yeah, and we'll get to that Ithaca landlord a little bit later. But for people who may not be familiar with Section 8, it's an income-based program that subsidizes housing for low-income New Yorkers, right? Right. So tenants typically pay 30% of their income toward rent. They qualify based on their low-income. The government pays the remainder with a voucher called the Section 8 program.

that rent goes directly to the landlord. There's about 123,000 households just in New York City who use Section 8 to pay their rent, tens of thousands of others across New York State. And many already describe how hard it is just to find a place to use the voucher because of source of income discrimination. David, let's get back to this T, this lawsuit involving the Ithaca landlord. What happened there? So this actually goes back about six years to 2020. There were these two tenants in Ithaca who went to this pretty prominent property owners rental company and said they wanted to rent apartments and they had Section 8 housing vouchers.

They were told that the company doesn't accept Section 8. So they filed a complaint. Two years later, State Attorney General Letitia James decided to sue this company. It's owned by a guy named Jason Fane saying he was violating the state's source of income discrimination laws. Okay. This was in the lower court of states called the Supreme Court. A judge there actually sided with the landlord ruled against Letitia James. Then she appealed to the appellate division making the same argument.

This was a violation of source of income discrimination law. And that's where we got to where we are here with that panel of judges saying, no, actually the landlord's correct. Okay. So it was this appeal that judges voted down. What problem was the original law trying to address, you know, in the first place? So New York City and New York State enacted these separate protections for people who use Section 8 or other housing vouchers because tenants with housing vouchers can have a really hard time finding a place to rent. That's often because they have a housing voucher. It's called source of income discrimination, as we've talked about.

Landlords, managers, brokers, real estate agents might steer people away from certain apartments or just deny them saying we don't accept programs or what's very. very common is they just ghost them. Once they find out somebody has a housing voucher, they just stop responding to them. It's a big problem. So, you know, it could be because of stereotypes associated with people who have housing vouchers, you know, by definition, they're lower income, so there's a lot of discrimination against people who are poor. It could be that landlords just don't want to deal with all the paperwork and other requirements that come with government programs, even if it does mean a consistent source of rental income that's backed by the government. That's exactly what I'm thinking, because, like,

What is this stigma actually? I mean, at the end of the day, you're getting the money. Right, especially at a time when a lot of landlords complaining that they're not getting consistent rent payments. We saw like rental arrears and nonpayment spike during the pandemic. And we're still seeing that today leading to a lot of nonpayment eviction cases. And this is actually a consistent source of rental income. But there's baggage associated with it, I guess. And, you know, we mentioned two reasons why landlords, property managers might not accept it.

Another, and this is what is also behind the source of income discrimination protections, is because the source of income discrimination can be used as a proxy against other forms of illegal discrimination, like discrimination based on race or ethnicity, so much gender or even their family composition because property owners often don't want to rent to families with kids, for example. Oh, wow. So landlords can't refuse to rent to someone because they're elderly or disabled, but they can't. can refuse to rent to someone using a housing voucher. How are these tenant advocates reacting to the ruling? Well, people are pretty upset about this. To your question before, I think it caught a lot of people off guard who had trusted that these protections met constitutional requirements and were intended to protect tenants because they were using this form of payment for their rent. From the government.

Exactly. Lawyers representing tenants say this decision could make it much harder for voucher-holds. to find housing. And they argue the court's reasoning here is flawed. They say the protections were created specifically because renters with vouchers have long been excluded from housing. And they also say it was based on speculation. Like this particular landlord wasn't actually forced to submit to an illegal search and

that it's just kind of the potential for that. And that form the basis of the judge's ruling. Earlier you mentioned that there are about 130,000. household across New York City who use these housing vouchers that we mentioned. Could the impact go beyond just Section 8 tenants? Well, potentially, yes. So advocates say landlords could use this ruling to challenge other laws that protect people who rely on different types of rental assistance.

So this ruling was specifically for the Section 8 program, but here in New York City, there's City FEPs. That's a New York City voucher program that's used by more than 60,000 households. Most of those are people who are moving out of homeless shelters into permanent housing. It's the biggest municipal rental assistance program in the country by far. There are other voucher programs. There's one specifically for people with HIV and AIDS to find secure permanent housing. And then the state itself recently opened up its own new voucher program that was included in the last year's budget.

It's called the Housing Access Voucher Program. And they actually just rolled that out last month. You know, David, I can't help but think about people who are currently looking for an apartment with their housing voucher right now. What about them? Well, that's the big question and definitely want to hear from people who are having that experience. That's going to be part of my reporting. Like, is this changing anything? You know, people have already said it can be very hard to find an apartment.

A couple of reasons. Apartments are very limited. Second reason, there is discrimination. Even if it is prohibited, it still occurs. And then I've talked with advocates. attorneys who say this could just emboldened property managers, brokers, landlords to say, look, I see this ruling. We don't have to accept these vouchers.

That's legal now to deny you. And we'll see if that happens. Now, call me naive. At what point do you let the landlord know that you will indeed be paying with a housing voucher? I guess it varies. You could say, like, right off the bat, like, I'm looking for an apartment and I'm using this voucher to help pay the rent.

You don't have to do that. I mean, that could be negotiations. with the broker or the manager before signing the lease. So I guess it varies, but before you sign the lease and then the landlord does have to submit to certain paperwork requirements and potentially inspection requirements as well. What happens next here, David? Could the ruling at this point still be overturned? Well, I mentioned that ruling was from the middle tier of New York's court system.

So the lowest tier, we call it the Supreme Court. That ruling was from the appellate division. And then there's finally the court of appeal. So the attorney general says that she's reviewing the decision and may appeal to the court of appeals, the state's highest court. And so if that happens, the case could determine whether these kinds of anti-discrimination protections remain in place statewide. Okay. Well, I'm certainly going to be following your reporting to keep up with that. That's WMYC's David Brand.

Thanks a lot, David. Thanks, Jada. Before we go, got to spread some good luck to NYU's women's basketball. team. The violets might be the most dominant team in New York right now. The team won big Saturday night over the University of Wisconsin to advance to the final four of the NCAA Division 3 tournament. That keeps NYU's undefeated season alive. The NYU women have now won 91 games in a row. Only the Yukon women have ever had a longer winning streak at any level of NCAA basketball, men or women. NYU will play again on Thursday.

facing the University of Scranton for a spot in the championship game. You got this, ladies, let's do it. Thanks for listening to NYC now from WNYC. I'm Jene Pierre. See you next time.