Court Strikes Down Section 8 Mandate: What MI Landlords Should Do
TL;DR: The 30-Second Summary
- A New York appellate court ruled that forcing landlords to accept Section 8 vouchers violates the 4th Amendment because it forces them to consent to government property searches.
- While this sets a massive legal precedent, Michigan landlords shouldn’t change their screening policies just yet. We need a local court to cite this ruling before you can safely deny vouchers based on source of income.
- Section 8 isn’t the enemy. With the right property management systems in place, government-backed tenants offer stable, reliable cash flow.
Big news out of New York: an appellate court just struck down a law that forced landlords to accept Section 8 housing vouchers, calling it a violation of constitutional rights.
If you’re a Michigan landlord, you might be wondering—does this mean you can start saying no to Section 8 too?
Not so fast.
While this is a huge legal precedent and could signal changes down the road, it doesn’t automatically shift things here in Michigan (yet).
Let’s unpack what happened, what it means, and why you’ll want to keep a close eye on local laws before making any sudden moves.
The Lawsuit: Ithaca Renting vs. New York
The case stems from a 2022 lawsuit brought by the New York Attorney General against Ithaca Renting Company, led by real estate investor Jason Fane. The state claimed that by refusing to accept Section 8 payments, the company was committing source-of-income discrimination.
Fane fought back. His legal team argued that forcing landlords to participate in the Section 8 program—and subjecting them to mandatory government inspections and records transparency—violates the U.S. Constitution.
Specifically, they argued it violates the Fourth Amendment, which protects against “unreasonable searches and seizures.”
The appellate court agreed.
The judges ruled that the state can’t force landlords to consent to governmental searches of their rental properties just to run their business.
Because of this, they ruled the law unconstitutional.
Will This Impact Michigan Landlords?
This is the big question. We’ve been getting calls all week asking: “Does this mean I can start denying Section 8 applicants right now?”
Not really. You should wait.
Here is the reality: New York courts don’t make laws for Michigan. We recently broke down the new Michigan Section 8 laws and what landlords can do to stay compliant after the state added “source of income” to the Elliott-Larsen Civil Rights Act.
Because of that state-level change, flat-out refusing a tenant simply because they use a voucher is still a legal risk here in Metro Detroit.
We’ve also covered the confusion around whether can landlords still reject Section 8 in Michigan based on the latest news updates?
The short answer is yes, you can still deny applicants if they fail your standard background checks, have terrible credit, or don’t meet reasonable income-to-rent ratios for their portion of the rent.
But you can’t deny them just because they have Section 8.
What this New York ruling does is give Michigan landlord associations a powerful legal playbook. It’s highly likely a similar lawsuit will pop up in Michigan soon, using this exact 4th Amendment argument as precedent.
Until that happens, hold tight and keep your screening criteria consistent.
To Section 8 or Not to Section 8?
Let’s be clear: Section 8 isn’t inherently a bad thing for your portfolio. In fact, many investors build incredibly stable, cash-flowing portfolios by embracing it.
We’ve talked extensively about the pros and cons of going Section 8. We always point out that having a guaranteed government check hitting your account every month is a beautiful thing, especially when the economy gets a little shaky.
And honestly, we always tell our clients to don’t be afraid of Section 8 inspections. As we noted in that guide, if you maintain your property to a professional standard and don’t act like a slumlord, those inspections are just a minor administrative hurdle.
The issue at the heart of the New York lawsuit wasn’t whether Section 8 is good or bad. The issue was choice. Landlords just want the right to choose how they run their own assets.
The Final Verdict
Don’t treat this New York ruling as a green light to deny Section 8 in Michigan just yet.
Stick to your established screening policies, make decisions based on qualifications—not voucher status—and pay close attention to local legal updates.
Staying informed and consistent is your safest bet until Michigan law or courts clearly rule otherwise.
If you’re ready for better communication and compliance peace of mind, make the switch to Logical Property Management today.