Judge dismisses housing-voucher discrimination lawsuit against OCF

A Philadelphia judge has dismissed a lawsuit that accused OCF Realty and a group of property owners of discrimination against people who rely on federal housing vouchers to pay for rent.

Common Pleas Court Judge Joshua Roberts ruled May 14 that a Philadelphia ordinance that prohibits discrimination based on source of income, which includes housing vouchers, “does not create a private cause of action for housing discrimination.”

The judge said the nonprofit that investigated whether OCF has available units for voucher holders had no standing to be part of the lawsuit.

As often happens in the Philadelphia court, the ruling was not accompanied by an opinion, so it is hard to know what the judge means exactly — and whether his ruling is specific to the facts of this lawsuit or a more sprawling finding that could limit a decades-old antidiscrimination provision.

The Public Interest Law Center, which filed the lawsuit on behalf of a Philadelphia woman and a Montgomery County housing nonprofit, intends to appeal the decision, according to Mimi McKenzie, the organization’s legal director.

For now, the ruling clears OCF and seven landlords from the discrimination claim. The judge left open the door for the plaintiffs to “seek relief, if any, through the appropriate City agency.”

Roughly 20,000 Philadelphia households rely on the Housing Choice Voucher Program, formerly Section 8, which was established in the 1970s to reduce the rent burden of those living in poverty.

Historically, landlords have resisted working with the program because it exposes them to additional requirements and regulations. An Urban Institute study from 2018 found that two-thirds of Philly landlords would not accept a tenant with a voucher.

PHA has been taking steps in an attempt to incentivize landlords to lease to voucher holders, including by giving out cash. And the fierce competition for tenants following a pandemic building boom has led some previously leery landlords to join the program.

» READ MORE: More landlords seek low-income vouchers as rent competition spikes, PHA fine-tunes program

In addition, in recent years City Council has expressed interest in bolstering protections for voucher holders under the city ordinances and enhancing enforcement efforts.

But the ordinance has rarely been tested in court.

The now-dismissed lawsuit was filed in February on behalf of Jennifer Cooper, a voucher holder, and the Housing Equality Center of Pennsylvania. (They previously sued in the Philadelphia Commission on Human Relations.)

The Housing Equality Center received an anonymous tip in 2022 that OCF was engaging in discriminatory conduct, and investigated by calling OCF listings and asking if they would accept a tenant with a voucher, the suit says.

Time and again, agents said the owners did not accept vouchers, the complaint says.

In addition, the lawsuit alleges that OCF and the homeowners discriminated against Cooper when she searched for a rental unit.

The lawsuit says that OCF “unlawfully” turned Cooper away based on her source of income, and that she became homeless because she was unable to find an apartment by the time her lease expired.

It took her more than five months to find a landlord who would accept her housing voucher, the lawsuit says.

OCF and the seven property owners say Cooper and the Housing Equality Center do not have standing to file the lawsuit, the city ordinance does not provide a right to a lawsuit in state court, and state and federal law preempt the city on this topic.

Beyond the procedural arguments, OCF and the property owners disagreed with the premise of the lawsuit: that under Philadelphia law, landlords are required to take part in what attorney Wally Zimolong called a “voluntary program.”

“We aren’t discriminating against anyone, we’re just not participating in this program,” said Zimolong, who represented the property owners in the case.

Ori Feibush, OCF‘s owner, said that economically, it does not make sense for many small homeowners to participate in the program. For example, a unit can remain vacant for months while the owner awaits approval from the housing authority.

A city ordinance that equates the choice to not participate in a program that puts an “enormous burden to the homeowner” with discrimination creates a disincentive to become a landlord, the developer said.

Philadelphia, which was not a party to the lawsuit, intervened in the case to defend the source-of-income provision in the city ordinance.

If the OCF‘s and the property owners’ objection is sustained, the decision could affect other city ordinances that allow people to file lawsuits, with “damaging consequences,” the city said