ITHACA, NY.—A New York Supreme Court judge ruled in favor of local real estate magnate Jason Fane and his Ithaca Renting Company (IRC) after New York Attorney General Letitia “Tish” James filed a lawsuit last October alleging Fane was breaking the law by not renting to people using Section 8 vouchers at his various properties. 

The Attorney General’s office argued the company’s refusal to accept Section 8 vouchers is a violation of source of income protection laws instituted in 2019, which were designed to protect renters from being rejected by landlords on the basis of needing Section 8 to pay for housing. 

The suit sought to require Fane to accept Section 8 vouchers, pay $300,000 in civil penalties and “set aside five percent of his residential housing units exclusively for Section 8 vouchers.” It cited specific renters who said they were told outright by IRC staffers that they would not accept Section 8 vouchers. 

Presiding Judge Mark Masler sided with Fane and his counsel. He decided the source of income antidiscrimination statute in the New York Human Rights Law (NYHRL) is unconstitutional because it violates landlords’ Fourth Amendment right to privacy—by requiring them to consent to warrantless searches of their properties, records and materials to governmental agencies.

“A law may not coerce property owners into consenting warrantless inspection,” Masler wrote in his decision.

James’ office filed an appeal to Masler’s decision on July 7. The office did not respond to requests for comment. When asked by an Ithaca Voice reporter at her “AG in the Community ” event held last week at the Greater Ithaca Activities Center for comment on the decision, James would only confirm her office’s intention to appeal the decision. 

Masler wrote in his decision that a landlord cannot accept a voucher as payment for rent without first agreeing to participate in the program by entering into a Housing Assistance Payment (HAP) contract with a Public Housing Agency (PHA). 

The HAP contract requires the landlord to consent to allowing a PHA, the Department of Housing and Urban Development and the Comptroller General of the United States “full and free access” to contracted units and “the premises,” which includes “any computers, equipment or facilities containing such records,” whenever the PHA deems necessary. 

The attorney general argued landlords have no “reasonable expectation of privacy” in their business records. Therefore, to the state, being required to sign and accept the HAP’s contract terms that allow for warrantless searches is not an infringement of landlords’ Fourth Amendment rights.  

Masler wrote this argument was “unavailing,” and that “by requiring landlords to accept Section 8 vouchers,” the statute does violate the Fourth Amendment by compelling landlords to “consent to warrantless searches of their records.” 

IRC’s attorney, Nathan Lyman, said the company does not participate in Section 8 for a myriad of reasons: cost of keeping up with the federal regulations that accompany the Section 8 program (led by an increase of inspections for safety and sanitation), lack of uniform unit size and pricing, and Ithaca’s high-demand rental market that makes a Section 8 voucher unlikely to be valid when an IRC apartment opens up. Section 8 vouchers are valid for 60 days when an apartment is available, but Lyman contended that IRC apartments are often rented far in advance of that timeframe. 

“IRC believes it would be a disservice to a voucher holder to hold out a false promise of discussing renting a unit knowing that the unit will likely not meet Section 8 requirements, or that it will rent to someone else before Section 8 could get out to do its initial inspection,” Lyman said. 

He argued that Section 8 vouchers are “not technically” a source of income, unlike vouchers through the county’s Department of Social Services (DSS), which obligate a rent payment to the landlord—though Lyman did not specify whether IRC rents to anyone who uses DSS vouchers either. 

The bulk of IRC’s properties are in downtown Ithaca and Collegetown, areas that largely cater to student renters. Lyman highlighted that as another reason for IRC’s resistance to Section 8 vouchers, drawing a contrast between the “constantly” changing Ithaca rental market and the limits on rent changes allowed under Section 8. 

“IRC’s basic business is to lease to students and young professionals, who tend to turn over annually or bi-annually,” Lyman wrote in a response to The Ithaca Voice.

“IRC’s business model is not conducive to the lack of responsiveness and prohibition on price adjustment without [Public Housing Authority] approval that Section 8 mandates.”

Lyman posited that the lawsuit was politically motivated, arguing that the supporting affidavits to the original suit were finished by July 2022, but the suit wasn’t filed until October 31, 2022, nine days before the midterm elections. James was re-elected by 9.3 percentage points

The Human Rights Law (NYHRL) was amended in April 2019 to make it illegal to refuse to rent or lease housing accommodations to any person, or group of persons, based on their “lawful source of income,” which includes Section 8 vouchers, according to Masler’s written decision. 

Fane and his attorneys made the case that the source of income antidiscrimination statute from the NYHRL is unconstitutional because it infringes on landlords’ Fourth Amendment right to privacy and protections from warrantless searches.  

They argued the amendment unfairly compels landlords to participate in Section 8 programs that would otherwise be optional for them if they did not conduct business in the state of New York. 

Landlord participation in the Section 8 housing program is optional under federal law. Masler wrote that the source of income protections outlined in the NYHRL cited in the initial suit is unconstitutional because it compels landlords to participate in an otherwise voluntary program.

Aubren Villasenor contributed reporting to this article.

Judy Lucas is a General Assignment Reporter for The Ithaca Voice. Have a story idea? Comment or question? You can reach me at or on Twitter @judy__lucas.

Matt Butler is the Editor in Chief of The Ithaca Voice. He can be reached by email at