A bill supporters are calling a property rights bill and opponents are criticizing as discriminatory has progressed after a 25-11 Senate vote.

House Bill 18, sponsored by Rep. Ryan Dotson, R-Winchester, is one of two bills filed this year to end source of income bans.

Sen. Stephen West, R-Paris, filed the other—Senate Bill 25, which also got Senate approval—but the legislature is moving forward with Dotson’s version.

What’s in the bill?

HB18 prevents localities from enforcing any source of income ban, specifically rental assistance from federal housing assistance programs. SB25 only dealt with Section 8.

It also states that property owners would not have to pay any emergency response fees at any of their properties if they didn’t personally cause the emergency.

Source of income bans are ordinances or regulations that bar landlords from discriminating against tenants based on where they get the money to pay their rent, as long as it’s a legal source.

For example, if a city passed a source of income ban, a landlord couldn’t reject a prospective tenant who pays rent using Section 8 vouchers, rent money provided to low-income individuals by the federal government.

The same would apply to rental assistance from other federal housing programs for veterans, people with disabilities and seniors.

A response to Lexington

The city of Louisville established a source of income ban in 2020, and as of last week, it appeared as if Lexington was next.

Last Thursday, the Lexington-Fayette Urban County Government county council  voted 13-2 to establish a source of income ban in Fayette County. The ban is intended to go into effect March 1.

However, legislators made it clear that wouldn’t happen. HB18 has an emergency clause, meaning that it goes into effect as soon as it passes.

“You better believe this is a response to what they’re doing in Lexington,” said Sen. Damon Thayer, R-Georgetown.

According to CivicLex, Lexington could potentially enforce part of its source of income ban. Landlords might still be unable to discriminate if a tenant’s rent money comes from child support or alimony, or any other income source that doesn’t come from federal housing assistance programs.

Floor debate

Thayer objected to local governments forcing landlords to take Section 8 vouchers “below the market rate.”

“I’m a little tired of bills being called discriminatory because of a certain policy. This is a bill about the Constitution and the Bill of Rights and the private property rights enshrined within it,” Thayer said.

“And if you want to talk about discrimination, what’s happening in Lexington is discrimination against the free market and the men and women who are in the business of being landlords and renting property to the citizens of Fayette County.”

Sen. Cassie Chambers Armstrong, D-Louisville, said that Thayer’s claim that source of income bans force landlords to accept rent below the market rate was incorrect.

“Landlords are not required to prioritize someone with a voucher, they’re not required to lower their rents below the publicly advertised amount, they’re allowed to collect a reasonable security deposit and they can terminate a tenancy for any legal reason,” she said.

Armstrong added that the Louisville ordinance was never challenged in court because it does not, in fact, threaten property rights.

“It’s about prohibiting discrimination,” she said. “It’s about saying that everyone is entitled to the same dignity regardless of what source of income they use to pay their rent.”

Several Democrats raised concerns about Kentucky’s housing crisis and their fears that this bill would exacerbate it.

West responded. Programs like Section 8 have several minimum requirements for acceptable housing that landlords must comply with and he said that landlords are in the best position to decide which federal programs they are willing to accept.

“We have a housing crisis. There’s no question about that,” he said. “…But fixing the housing crisis by putting new requirements on the backs of landlords is not necessarily the way to go in my opinion.”

Sen. Reginald Thomas, D-Lexington, said that this bill is the “wrong direction” for communities that are trying to address affordable housing issues. He highlighted the difference in treatment between a wealthy parent co-signing their child’s lease and the federal government subsidizing a tenant’s rent.

“What we’re doing today, and let’s be clear, is we are discriminating against poor people,” he said.

Five Republicans joined all but one Democrat in voting against the bill, which passed 25-11. Since there were a few changes since the House passed the bill, it goes back to the House for a second round of approval.

If the House approves HB18, it will go to the governor, who is likely to veto it and send it back to the House and Senate to override his veto.