BREAKING: New York Appellate Court Rules that State Cannot Compel Owners to Participate in Section 8

Yesterday, the Appellate Division, Third Department issued a significant decision addressing the constitutionality of New York’s source-of-income discrimination law as applied to Section 8 housing vouchers.

In People of the State of New York v. Commons West, LLC, the Court held that the law is unconstitutional to the extent it forces land owners to participate in the federal Section 8 program.

The Court focused on the structure of the Federal Section 8 program. Specifically, the Court reasoned that, to accept a voucher, an owner must execute a Housing Assistance Payments (HAP) contract with the applicable public housing authority. That contract requires owners to provide government agencies — including HUD and local housing authorities — “full and free access” to the property and to records related to the tenancy. As a result, the Court concluded that forcing owners to accept vouchers compels them to consent in advance to potentially broad government inspections without a warrant, raising serious Constitutional concerns.

Because participation in Section 8 is voluntary under Federal Law, the Court determined that New York cannot force owners into the program by making refusal to accept vouchers a violation of the Human Rights Law.

Although the decision is from the Third Department (based in Albany), the ruling is significant for owners and operators statewide.

For real estate owners and operators, this decision could meaningfully affect leasing strategies, compliance policies, and lessen risk exposure related to voucher participation.

Our team is closely monitoring developments and advising clients on how this decision may affect leasing practices, compliance obligations, and litigation exposure.

Should you have any questions, please do not hesitate to contact your trusted KMWB advisor.