Unreasonable Accommodation or Interpretation: The Eighth Circuit Denies a Landlord Must Accept a Section 8 Voucher Under the Fair Housing Amendments Act

A tenant with a disability that prevented her from working full-time wanted to use a Section 8 voucher to supplement her increasing rental payments. The landlord refused to accept the rental assistance voucher. Following this refusal, the tenant had a victory in a federal trial court in Iowa, which granted an injunction mandating the landlord must accept the voucher as a reasonable accommodation under the FHAA. The Eighth Circuit reversed the trial court’s decision and held that there is no requirement for a landlord to accept a Section 8 voucher as a reasonable accommodation under the FHAA. With this decision, it seems the Eighth Circuit is joining the Second and Seventh Circuit courts in a split with the Ninth Circuit.

By: Emily Loftis

Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023)

I.               Introduction

Suellen Klossner rents land at a mobile park owned by IADU Table Mound and managed by Impact MHC Management (“Impact”) in Iowa.[1]  Klossner has disabilities that prevent her from working, including bipolar disorder, neuropathy, fibromyalgia, and agoraphobia.[2]  She is able to survive with assistance from various government programs.[3]

As rent has continued to increase quickly at the IADU Table Mound lot, Klossner sought to supplement her rental payments with a federally funded Section 8 voucher distributed by local housing authorities to help low-income renters afford housing.[4]  Impact refused to accept the voucher, and Klossner sued, stating the refusal violated the FHAA’s requirement that landlords make “reasonable accommodations” for tenants with disabilities.[5]  After the trial court ruled in Klossner’s favor, the Eighth Circuit reversed in Klossner v. IADU.[6]  It held the FHAA does not require a landlord to accept a Section 8 voucher from a tenant with disabilities.[7]

II.             Facts and Holding

Klossner has been a tenant at the mobile-home park since 2009.[8]  She owns her mobile-home but rents the land it sits on.[9]  Throughout her first eight years on the property, she only experienced a total rent and utilities increase of $45. Once IADU Table Mound purchased the property in 2017, rent and utilities steadily increased time and time again.[10]  By 2019, Klossner owed $380 in monthly rent and was charged separately for water, sewer, trash, and metered rental expenses. [11]  This amounted to about $430 a month.[12]

Unable to work due to physical and psychological disabilities, Klossner has lived on about $800 a month from various government programs including Social Security Disability Insurance (SSDI) and Supplemental Security Income.[13]  In 2019, the city in which Klossner resides passed a measure that allows the local public housing authority to provide federally funded rental supplement vouchers to mobile-home park residents.[14]  Klossner qualified for such a voucher, which would significantly decrease the amount she had to pay out of pocket.[15]  Klossner’s landlord did not accept this voucher.[16] 

There is no federal law that requires landlords to participate in the voluntary Section 8 voucher program.[17]  Impact, the management company, has a policy to not accept Section 8 vouchers except in limited circumstances, such as where state law requires acceptance or where the company has purchased property where a prior owner accepted vouchers from a holdover tenant.[18]  Impact has about forty tenants who meet this exception out of the estimated 20,000 tenants across all the properties they manage.[19]

Participation in the Section 8 program requires the landlord to take certain steps, like signing a Housing Assistance Payments contract with a “good cause” provision, inspections of the property by the government, and additional recordkeeping.[20]  Impact cites these as administrative burdens that weigh against the “reasonableness” of the requested accommodations.[21]

Klossner asserted that IADU and Impact must waive the policy of not accepting Section 8 vouchers as a reasonable accommodation for her disability under the FHAA.[22]  The lower court agreed with her.[23]  Borrowing from ADA case law, it reasoned that there was a sufficient nexus between the tenant’s disability and economic situation, and the landlord failed to show undue hardship in granting the accommodation.[24]  On appeal, the landlord again argued that the accommodation was neither necessary nor reasonable under the FHAA.[25]  The Eighth Circuit held landlords have no duty under the FHAA to accommodate a disabled tenant’s economic circumstances that result from their disability, so the requested accommodation is not a reasonable one under the FHAA.[26]

III.           Legal Background

This part will explain the requirements to show a violation of the FHAA and the current circuit split in interpretation.

A.    The FHAA and Related Regulations

The FHAA prohibits housing discrimination on the basis of an individual’s “handicap.”[27] Under the law, discrimination is prohibited “against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap of . . . . that person.”[28]

A successful failure-to-accommodate claim under the FHAA requires the plaintiff to show: (1) she is handicapped within the meaning of the FHAA and defendants were aware of the handicap; (2) her requested accommodation is necessary for her to use and enjoy the dwelling; (3) her accommodation request is reasonable; and (4) defendants refused to make the requested accommodation.[29]

The predecessor statute to the FHAA, the Rehabilitation Act of 1973, prevented discrimination on the basis of disability status.[30]  Under this law, reasonable accommodation was defined to include (1) making facilities accessible to and usable by handicapped persons, and (2) “job restructuring, part-time or modified work schedules, acquisition or modification of equipment or devices, the provision of readers or interpreters, and other similar actions.”[31]  Even after the FHAA was passed, courts, like the Ninth Circuit, decided that “reasonable accommodation” is interpreted in light of cases discussing the Rehabilitation Act.[32]  The Rehabilitation Act was narrow in that it only required accommodations that were needed “because of disability.” [33]

B.    The Second Circuit

In Salute v. Stratford Greens Garden Apartments, 136 F.3d 293 (2d Cir. 1998), a group of tenants wanted their landlord to accept government rental assistance to supplement their rent as a reasonable accommodation for their disabilities.[34]  The landlord refused, and the Second Circuit held that the FHAA did not require the landlord to accept the certificates, stating “[e]conomic discrimination—such as the refusal to accept Section 8 tenants—is not cognizable as a failure to make reasonable accommodations, in violation of § 3604(f)(3)(B).”[35]

The court reasoned that the duty to make reasonable accommodations must be viewed considering each particular disability.[36]  It provided examples of accommodations like providing a preferred parking space for a tenant with mobility issues and allowing an exception to a no-pets rule to allow the use of a service dog by a blind person.[37]  The court found the tenants in Salute sought an accommodation to remedy economic discrimination that is not related to disability status, and that the acceptance of the government assistance was not “necessary” to afford the tenants “equal opportunity” to use and enjoy a dwelling.[38]  The dissent pointed out that a fact finder may find the tenants’ economic situation stemmed from their disabilities that prevented them from working.[39]  Despite this, the court declared “economic discrimination” is “not cognizable as a failure to make a reasonable accommodation” under the FHAA.[40]

C.    The Seventh Circuit

In Hemisphere Building Co. v. Village of Richton Park, 171 F.3d 437 (7th Cir. 1999), a developer tried to get a municipality to give him an exception to the zoning laws that would allow the construction of more structures that were designed for tenants using wheelchairs.[41]  The developer argued that the zoning exception would be a “reasonable accommodation” under the FHAA because it would help lower costs of wheelchair accessible housing, allowing lower income renters to live there.[42]  The zoning variance was refused, and the developer sued.[43]

The Seventh Circuit decided against the developer.[44]  It explained that if the reasonable accommodation provision of the FHAA required consideration of a tenant’s financial situation, then the statute would open a Pandora’s Box to giving exceptions to developers for an unpredictable number of zoning laws and other regulations under the name of “reasonable accommodations.”[45] It decided that the reasonable accommodations must be directly related to the disability, not less related characteristics such as financial standing.[46]  

D.    The Ninth Circuit

In Giebeler v. M & B Assocs., 343 F.3d 1143 (9th Cir. 2003), the Ninth Circuit explicitly rejected the Second and Seventh Circuit decisions in Salute and Hemisphere.[47]  The court held that a disabled person’s request that his mother be allowed to co-sign the lease was a reasonable accommodation under the FHAA when the tenant’s disability prevented him from working and therefore left him unable to meet the minimum income requirement the landlord set.[48]  The court considered the fact that the landlord would still be receiving full rent from tenant and not made to accept less as a factor in favor of reasonableness.[49]

IV.          Instant Decision

A.    Majority Opinion

In the instant case, the Eighth Circuit majority concluded that the FHAA does not require a landlord to accommodate a disabled tenant’s economic circumstance.[50]  It relied on Salute and Hemisphere in coming to this conclusion.[51]  The court also looked to the history of the statute and interpretations of the Rehabilitation Act of 1973 rather than other areas of disability law like the ADA.[52]  While the court accepted that there are times when disability-neutral policies must give way to requested accommodations under the FHAA, it refused to extend the scope of reasonable accommodations to economic matters.[53] This is similar to the Second and Seventh Circuit courts,[54] but departs from the Ninth Circuit’s interpretation of the FHAA.[55]

B.    Concurrence

Instead of picking apart how an economic accommodation is not an “accommodation” under the FHAA, Judge David R. Stras would have concluded that the requested accommodation was simply not reasonable.[56]  The concurrence noted the burden on landlords, particularly mobile home park owners, would be too onerous.[57]  For example, the fact that the landlord owned the land and the tenant owned the structure on the land created issues for compliance with federal Section 8 requirements.[58]  These requirements include standards for sanitation and lack of defects.[59]  The burden would be on the tenant to fulfill these requirements, but it is the landlord who would suffer financial risk if the tenant failed to upkeep the unit.[60]  The financial risk shifting made the accommodation unreasonable in Judge Stras’s eyes.[61]

V.            Comment

The Eighth Circuit’s reasoning for overturning the trial court decision leaves some questions unanswered.  It is unclear why it chose not to follow the trial court’s decision to look to interpretations of “reasonable accommodation” under other disability related laws.  The trial court borrowed from the interpretation under the ADA, which was also meant to help prevent discrimination against people with disabilities.[62]

Divorcing a direct consequence of disabilities, like the ones Klossner experiences, from the disability itself is not a satisfying conclusion.  Klossner cannot work full-time because of her disabilities, including bipolar disorder, neuropathy, fibromyalgia, and agoraphobia.[63]  Her inability to work seems to support a finding that her economic situation is in fact a direct consequence of her disability.  Not all people who experience a disability are unable to work, so the court’s fears of these accommodations extending too far and creating an undue burden are unsupported by any facts in the opinion.  

Further, the management company, Impact, already accepts Section 8 vouchers from other tenants across other properties.[64]  The court does not explain why allowing one more person to use a Section 8 voucher would create an excessive administrative burden.  One of the burden’s that the landlord cited is that it would cost them around $10,000 if Klossner does not maintain her home in accordance with HUD regulations, causing her rental assistance to be suspended and her mobile home to be removed from the park.[65]  If Klossner can no longer pay because she has no voucher assistance, the landlord would likely still incur similar expenses to remove her and her home as she has stated that she does not have the resources to move her home herself.[66]  The burden of the landlord’s refusal to accept the voucher to Klossner is extremely high, as she will lose her home and ability to live independently.[67]

The court also fails to take into account the mutually beneficial nature of the voucher program.  Just like in Giebeler, the landlord is not being asked to reduce rent or accept any less money for rent due to a tenant’s disability.[68]  The landlord will still get paid the same amount, and it is in fact more likely that the landlord will get paid in the full amount on time if they accept a voucher.  The court cites burdensome eviction proceedings the landlord would have to go through if the tenant reneged on their contract,[69] but that is no different whether the tenant uses a voucher or not. There may even be more litigation over eviction when tenants cannot afford rent because they are not able to use a voucher.  With respect to the sanitization and other HUD condition requirements under the Section 8 program, it is more likely that the tenant will keep her unit adequately maintained when her portion of the rent is a more reasonable portion of her income.  Acceptance of the voucher would leave her more money for repairs and maintenance of the unit.

Because Klossner’s economic situation is a direct consequence of her disability, which prevents her from working, the Eighth Circuit should have followed the Ninth Circuit’s reasoning in Giebeler.  The accommodation would simply give Klossner another avenue through which to pay her full rent, which is becoming impossible to do, just as the plaintiff in Giebelerfound it impossible to meet the income requirements for the lease because of his status as a person with a disability that prevented him from working.[70]

VI.           Conclusion

The Eighth Circuit limited the scope of what may be considered a reasonable accommodation under the FHAA.  Even when a renter’s financial situation is a direct result of their inability to be employed due to a disability, accommodations are not required under the FHAA according to the Eighth Circuit.

[1] Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349, 351 (8th Cir. 2023).

[2] Brief for the United States as Amicus Curiae in Support of Plaintiff-Appellee/Cross-Appellant at 5, Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023) (No. 21-3503) (“Brief for the United States”).

[3] Id.

[4] Klossner, 65 F.4th at 351; Appellee, Cross-Appellant Brief at 13–14, Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023) (Nos. 21-3503, 21-3544) (“Ms. Klossner’s rent and utilities as a share of her income increased from approximately 30% in 2017 to more than 50% when she filed this action. Consequently, Ms. Klossner can no longer afford her rent, even though her personal and economic circumstances have remained the same for many years.”).

[5] Klossner, 65 F.4th at 351–52.

[6] Id. at 351.

[7] Id. at 355–56.

[8] Id. at 351.  

[9] Id. at 356 (J. Stras, concurring) (“The tenant purchases the trailer and then parks it in a space owned by the landlord.”).

[10] Brief for the United States at 6.

[11] Id.

[12] Id.

[13] Id. at 5–6.

[14] Klossner, 65 F.4th at 351.

[15] Id.

[16] Id.

[17] Id.

[18] Id. at 351–52.

[19] Klossner v. IADU Table Mound MHP, LLC, 565 F. Supp. 3d 1118, 1128 (N.D. Iowa 2021) (“Of the more than 20,000 tenants defendant Impact manages, approximately 40 are Section 8 voucher participants.”).

[20] Id. at 1132.

[21] Klossner, 65 F.4th at 351–52.

[22] Id. at 352.

[23] Klossner, 565 F. Supp. 3d at 1130.

[24] Id.

[25] Brief of Appellants IADU Table Mound, MHP, LLC and Impact MHC Management, LLC at 27, Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023) (No. 21-3503).

[26] Klossner, 65 F.4th at 355–56.

[27] 42 U.S.C. § 3604(f).

[28] 42 U.S.C. § 3604(f)(2).

[29] Fair Hous. of the Dakotas, Inc. v. Goldmark Prop. Mgmt., 778 F. Supp. 2d 1028, 1034 (D. N.D. 2011); see also Edwards v. Gene Salter Props., No. 4:15CV00571, 2019 WL 2651109, at *3 (E.D. Ark. June 27, 2019).

[30] 29 U.S.C. § 794 (1973).

[31] 45 C.F.R. § 84.12(b).

[32] City of Edmonds v. Wash. State Bldg. Code Council, 18 F.3d 802, 806 (9th Cir. 1994); see also H.R. Rep. No. 100–711, at 25 (1988).

[33] Bryant Woods Inn, Inc. v. Howard Cnty., 124 F.3d 597, 604 (4th Cir. 1997) (A reasonable accommodation under the Rehabilitation Act is one that provides “direct amelioration of a disability’s effect.”).

[34] Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 295 (2d Cir. 1998).

[35] Id. at 302.

[36] Id. at 301.

[37] Id.

[38] Id. at 302.

[39] Id. at 310. (J. Calabresi, dissenting).

[40] Id. at 302.

[41] Hemisphere Building Co. v. Village of Richton Park, 171 F.3d 437, 438 (7th Cir. 1999).

[42] Id. at 440.

[43] Id.

[44] Id. at 441.

[45] Id.

[46] Id.

[47] Giebeler v. M & B Assocs., 343 F.3d 1143, 1154 (9th Cir. 2003).

[48] Id. at 1159.

[49] Id.

[50] Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349, 355–56 (8th Cir. 2023).

[51] Id. at 353.

[52] Id. at 354.

[53] Id. at 355–56.

[54] Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 295 (2d Cir. 1998); Hemisphere Building Co. v. Village of Richton Park, 171 F.3d 437 (7th Cir. 1999).

[55] Giebeler v. M & B Assoc., 343 F.3d 1143, 1154 (9th Cir. 2003).

[56] Id. at 356 (J. Stras, concurring).

[57] Id.

[58] Id.

[59] Id.

[60] Id.

[61] Id. at 357.

[62] Klossner v. IADU Table Mound MHP, LLC, 565 F. Supp. 3d 1118, 1130 (N.D. Iowa 2021) (“In reaching the legal conclusion that plaintiff has carried her burden of showing a nexus between her requested accommodation and the effect of her disability, the Court relies on the Supreme Court’s reasoning in Barnett and its implied rejection of Justice Scalia’s ‘but for’ nexus he proposed in his dissenting opinion. Although Barnett involved the Americans With Disabilities Act (‘ADA’), the legal reasoning regarding accommodations of disabilities is the same.”); see Schaw v. Habitat for Human. of Citrus Cnty., Inc., 938 F.3d 1259, 1265 n.2 (11th Cir. 2019) (because FHAA caselaw is rather thin, it is acceptable to look to case law under the ADA and RA for “guidance on what is reasonable under the [Fair Housing Amendments Act].”).

[63] Brief for the United States at 5, Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023) (No. 21-3503).

[64] Klossner, 565 F. Supp. 3d at 1128.

[65] Brief for the United States at 21 (“if Klossner’s accommodation is granted, defendants might “incur[] expenses of up to $10,000” if she does not maintain her home in accordance with HUD regulations, her rental assistance is suspended, and her mobile home must be removed from their park.”).

[66] Id.

[67] Appellee, Cross-Appellant Brief at 2, Klossner v. IADU Table Mound MHP, LLC, 65 F.4th 349 (8th Cir. 2023) (Nos. 21-3503, 21-3544).

[68] Brief for the United States at 20.

[69] Id. at 21.

[70] Giebeler v. M & B Assocs., 343 F.3d 1143, 1159 (9th Cir. 2003).