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BLOG / 03.16.26 /Jennifer L. Stewart

NY Appellate Court Invalidates State Source-of-Income Discrimination Law – NY State Cannot Compel Landlords to Accept Section 8

On March 5, 2026, the New York Supreme Court Appellate Division, Third Department issued a significant decision declaring New York Executive Law § 296(5)(a)(1) unconstitutional. The court held that the statute— which made source-of-income discrimination unlawful, including refusal to accept Section 8 vouchers— violates landlords’ Fourth Amendment rights.

The decision was unanimous, with all five judges on the panel agreeing that the statute is unconstitutional on its face. Absent contrary authority from another Appellate Division Department or the Court of Appeals, this ruling is binding statewide.

While the court acknowledged the seriousness of New York’s housing affordability challenges and the importance of the federal Section 8 Housing Choice Voucher Program as a tool to expand affordable housing, it ultimately concluded that the law improperly compels landlords to submit to warrantless government searches.

Under the Section 8 program, landlords must sign a Housing Assistance Payment (HAP) contract requiring them to provide “full and free access” to apartments, premises, and relevant accounts and records. The court found that this requirement effectively forces landlords to consent to governmental searches without a warrant, which violates the Fourth Amendment.

What this means for landlords and property owners:

1. State Source-of-Income Law Overturned (For Now)

The ruling invalidates Executive Law § 296(5)(a)(1). Existing state-level discrimination claims based solely on source of income may now be subject to dismissal. However, this argument may need to be raised in Supreme Court, as administrative agencies generally lack jurisdiction to decide constitutional issues.

2. Potential Impact on Local Laws

The decision provides a defense against similar local source-of-income laws in jurisdictions such as Westchester County, Nassau County, Suffolk County, and New York City. Again, such challenges would need to be raised in Supreme Court, not before the agency.

3. Possible Appeal

We anticipate a potential appeal to the New York Court of Appeals, which could ultimately determine the law’s fate statewide.

4. Possible Legislative Response

The state legislature and local governments may attempt to revise these laws to address the constitutional concerns identified by the court.

5. Proceed with Caution

While this ruling is significant—and welcome news for landlords who prefer not to participate in Section 8—the legal landscape may change quickly. Clients should remain cautious in making policy decisions regarding Section 8 participation until further developments occur.

We will continue to monitor this issue closely and provide updates as the case progresses. If you have questions about how this decision may affect your properties or any pending matters, please contact our office.