Effective Jan. 1, 2021, the Colorado Legislature passed legislation that added source of income (SOI) and requires most housing providers to participate in voluntary federal-subsidized housing programs, such as Section 8. Unfortunately, regulatory compliance with these voluntary programs can be expensive and beyond the sophistication of some housing providers. The cost of participation ends up being paid by residents who aren’t in the program, which raises the rent for everyone. The solution is to update the federal program to make participation less expensive.
Colorado state law does not currently prohibit local cities from passing legislation for SOI mandates. Therefore, the City of Boulder and the City and County of Denver recently passed ordinances requiring local housing providers to accept all legal sources of income, including Section 8 vouchers.
Denver’s SOI ordinance took effect January 1, 2019. On August 6, 2018, over much opposition, the Denver City Council passed the ordinance requiring housing providers with rental units in the County of Denver to consider Section 8 vouchers and other non-traditional sources of income. Non-traditional income may include vouchers and subsidies from Section 8, Colorado Coalition for the Homeless (CCH), VASH, CAP, student loans, disability, social security, pension benefits, etc.
There is an exclusion for a Denver housing provider with only one rental, and for duplexes where the owner lives in one of the units. Accordingly, most Denver housing providers can no longer say, “We don’t accept Section 8 vouchers.” The new ordinance requires housing providers to consider the applicant. However, if the applicant does NOT qualify under a housing provider’s normal screening criteria (credit score below a certain level, negative rental history, history of bad credit, certain criminal behavior, or eviction), a housing provider can still deny an applicant.
As of January 1, 2019, if a Section 8 voucher holder is a good candidate, most Denver housing providers are required to accept the voucher and cooperate with the Denver Housing Authority (DHA) rules, HUD regulations, inspections and policies.
Housing providers may continue their normal screening criteria, as long as policies are fair, nondiscriminatory, and consistently enforced. For example:
- If a housing provider requires a credit score above 620, the housing provider may deny candidates who do not meet this threshold.
- If a housing provider does not rent to anyone with a possession judgment (eviction order) within the last three years, the housing provider may deny candidates who have a recent possession judgment on record.
- If a housing provider does not rent to anyone with a violent or sex-related felony conviction in the past five years, the housing provider may deny candidates who do not meet this threshold.
- If a housing provider does not rent to anyone who is a lifetime registered sex offender, the housing provider may deny candidates who are lifetime registered sex offenders.
- If a housing provider does not rent to anyone with negative rental history in the past three years, the housing provider may deny candidates who do not meet this minimum threshold.
- A housing provider may deny candidates who do not qualify to live in a unit at the housing provider’s price point.
- If a housing provider requires all approved applicants to pay the deposit in full, before the unit is taken off the market, the housing provider may require this of its Section 8 applicants as well.
Information was sourced from the Apartment Association of Metro Denver. For more information on SOI, visit the AAMD website.