Judge keeps Lincoln source-of-income housing law in effect during lawsuit

Lincoln voters overwhelmingly passed the ban last year. 

In September, a group of landlords — Century Sales and Management LLC, Superior Place Apartments, Property Management Inc. and Revolution Properties LLC — sued the city of Lincoln seeking a temporary and permanent injunction. 

At a hearing on the motion Tuesday, their attorney, Ryan Norman, said: "Landlords in Lincoln are being forced to sign a contract with the government that allows the government to search their property and business records without a warrant or consent."

If the landlords don't comply, they can be fined, lose their business license and even do up to six months in jail, he said.

"This sounds wrong, and it sounds wrong because it is wrong," Norman said.

The Fair Housing Act doesn't require landlords to accept Section 8 vouchers to pay rent. Section 8 vouchers are federal assistance meant to help low-income families, older adults and people with disabilities afford private housing.

But now in Lincoln, he said, landlords either must accept the vouchers and sign a housing assistance payment contract or decline to participate in the voucher program and expose themselves to civil and potential criminal penalties.

Norman called "forced acceptance of the federal rental assistance" a rapidly developing area of the law. But he said recent case law elsewhere has been clear.

"Laws like the one currently being enforced in Lincoln violate the landlord's constitutional rights," he said, citing cases in New York and Kansas City.

While they aren't binding authority, he said, they are persuasive authority. 

Norman said one of the plaintiffs in this case, Century Sales and Management, currently is being investigated by the Lincoln Commission on Human Rights for violating the ordinance. 

He said the city is simultaneously investigating and prosecuting one of the plaintiffs in this case, while also arguing that they don't have standing in this case, because they haven't been injured.

On the other side, Lincoln City Attorney Yohance Christie said the city isn't prosecuting anyone for violating the ordinance. 

"When I hear prosecution, I think criminal prosecution. That's not what's happening with the Commission on Human Rights," he said. 

He said there's no evidence in the record about what that case is about. 

Christie largely focused on the fact that the plaintiffs waited several months to file the lawsuit and now are asking the judge to block the ordinance immediately, after it's been in effect for more than a year. 

"I think that it is fair to say, and it is unquestionably true, that waiting that long undercuts the sense of urgency in this case," he said. 

Christie said preliminary injunctions — which come at the start of a lawsuit and continue until the case is decided — are an extraordinary remedy and not to be handed out lightly.

And there is more context that would need to be presented, he argued. Fourth Amendment protections against unreasonable search and seizure clearly aren't implicated by the text of the ordinance, he said. At best, there would be multiple steps before a search would come into play. 

But the Lincoln Housing Authority, which is intertwined in this, isn't here, Christie said.

"Respectfully, we believe you need more evidence before you decide," he told District Judge Darla Ideus.

Attorney Kasey Ogle of Collective Impact, which the judge has allowed to intervene in the case on behalf of tenants who use Section 8 vouchers, said "what the plaintiffs are saying is that they don't want to comply with the ordinance."

"They're trying to pull back and say it's not fair to make us comply with this ordinance, in a sense, sort of obfuscating the issues," she argued. 

Ogle said the landlords' argument rests on the highly speculative fear that several separate and distinct steps will occur. There's no injury in fact here, she said.

Judge Ideus asked Norman about the delay in filing the lawsuit. 

Norman said his clients are simply landlords and there was confusion about how this was going to be applied. 

"This is not something where a group of landlords just got together and decided to challenge this. This is something where landlords, who were affected by the law after a period of time, came and sought a remedy to it because they thought their constitutional rights were being violated," he said. "So that took some time."

In the end, Ideus said an injunction should not be granted unless a right is clear and the damage is irreparable, and the remedy at law is inadequate to prevent a failure of justice.

"In reviewing the evidence and the arguments, the court has a number of questions, and the court does not believe that the plaintiffs are entitled to the relief requested," she said, overruling the motion.

So the case will go forward with the ordinance still in place.

Prior to the passage of the initiative, supporters said one in three people who received housing vouchers had to return them unused, often because they couldn't find a landlord willing to accept them in the allotted time frame.

The 18 organizations that comprised a coalition collected more than 15,000 signatures to get the question on the ballot.

Its passage marked the first time voters have added new provisions to a city ordinance. The city charter prevents the council from modifying the new ordinance language for a year.