PHA Can Terminate Resident’s Subsidy

Facts: An Iowa resident sued to overturn a PHA's decision to terminate her Section 8 housing assistance based on her failure to report income. The resident challenged the PHA's policy of treating a failure to report each of her child's Social Security benefits as a separate occurrence of unreported income and claimed that the policy violated the Fair Housing Act on the basis of familial status discrimination.

The PHA requires all Section 8 participants to sign a two-page "Statement of Family/Household Obligations." Among other things, the participant certifies that he or she will report to the case manager in writing within 10 days "any increase or decrease or change of the source of household income." The participant also acknowledges that his or her housing assistance may be terminated for a violation of any family obligation in the program.

In 2008, the Municipal Housing Board approved the PHA's proposed revision of its policy on processing instances of unreported income "to better define for their clients and staff how unreported income will be calculated." The new policy stated, "The family will be afforded a total of four (4) occurrences of unreported income. More than four occurrences of unreported income is grounds for termination of benefits."

In this case, the PHA determined that the participant had five occurrences of unreported income, including Family Investment Program benefits, child support, and Social Security disability payments for each of her three children. An Iowa district court ruled for the PHA, finding that the PHA's decision to terminate was supported by substantial evidence because each Social Security benefit was covered by a separate letter and each was for a separate child. The resident appealed the district court's decision.

Ruling: The Iowa Supreme Court upheld the lower court's decision.

Reasoning: The court found that the three separate benefits letters from the Social Security Administration provided substantial evidence that there were three separate occurrences of unreported income.

Also, with regard to the resident's claim that the PHA's four-occurrence policy discriminates against larger families, the court decided that, on its face, the PHA's policy treats all families the same way. Under the policy, larger families have more potential income beneficiaries and thus, more situations where a failure to report income could occur. They also have more persons who could potentially commit acts that provide other, independent grounds for termination of housing assistance. But the court concluded that these effects are not disproportionate, and thus, the policy does not constitute familial status discrimination. Large families may present more circumstances that could be treated as a violation, but not disproportionately more.

• Bowman v. City of Des Moines Municipal Housing Agency, November 2011