Section 8 renters refer to those eligible for rent subsidy under the US Department of Housing and Urban Development’s (HUD) Housing Choice Vouchers program. The program is designed to support very low-income families, the elderly, and the disabled in finding housing under market conditions. Under California law, subsidies from Section 8 are deemed to be income, making it a protected class against whom a landlord cannot discriminate under the California Fair Employment and Housing Act.

The HRI said that it used undercover testers who posed as prospective tenants and asked landlords if they would accept Section 8 renters. The group said that in the San Francisco area, testers were rejected 44 percent of the time, which rose to 53 percent in the Oakland area, 58 percent in the San Jose area, and 70 percent in the Los Angeles area. The group said that the complaints it filed based on the investigation appeared to amount to the “largest housing discrimination case in California’s history.” The complaint named major national and international real estate firms, including Coldwell Banker, eXp Realty, Sotheby’s International Realty, and RE/MAX.

Section 8 renters are considered undesirable by landlords due to increased administrative procedures, including filing the Request for Tenancy Approval (RFTA) form and the Housing Assistance Payments (HAP) Contract. There are also higher expectations for housing quality, and landlords must adhere to requirements from the HUD. These factors, combined with the government’s 40th percentile rule, which stipulates subsidies only up to the 40th percentile of rent prices in a given region, mean that property owners in that range are hesitant to face the costs of dealing with Section 8 renters.