Apartment Assoc. of Met. Pittsburgh, Inc. v. The City of Pittsburgh ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Apartment Association of Metropolitan :
Pittsburgh, Inc. :
:
v. : No. 528 C.D. 2018
: ARGUED: February 11, 2020
The City of Pittsburgh, :
Appellant :
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION BY JUDGE CEISLER FILED: March 12, 2020
This matter returns to us on remand from the Supreme Court of Pennsylvania
for reconsideration in light of its recent decision in Pennsylvania Restaurant and
Lodging Association v. City of Pittsburgh, 211 A.3d 810 (Pa. 2019).
The City of Pittsburgh (City) appeals from the March 14, 2018 Order of the
Court of Common Pleas of Allegheny County (Trial Court), which granted the
Motion for Summary Judgment filed by Apartment Association of Metropolitan
Pittsburgh, Inc. (Apartment Association) and denied the City’s Motion for Judgment
on the Pleadings. The question presently before this Court is whether, under the
Pennsylvania Supreme Court’s analysis in Pennsylvania Restaurant, the City had
express statutory authority to enact an ordinance prohibiting housing discrimination
against City residents based on their sources of income. For the reasons that follow,
we conclude that the City did not have such authority and, therefore, affirm the Trial
Court’s Order.
Background
The City is a home rule municipality governed by the Home Rule Charter and
Optional Plans Law (Home Rule Law), 53 Pa. C.S. §§ 2901-2984. The City is also
a city of the second class under what is known as the Second Class City Code.1
Apartment Association is a nonprofit corporation whose members are
property owners, managers, and landlords in the business of renting residential
properties in the City. Apartment Association’s 200-plus members own and/or
manage approximately 30,000 residential rental units in the City.
Housing is provided to many low-income tenants in the City through housing
subsidies, the most well-known of which is the federal Section 8 Housing Choice
1
The Second Class City Code is comprised of several legislative acts. The statutory
provision applicable to this appeal is Section 3 of the Second Class City Code, Act of March 7,
1901, P.L. 20, as amended, 53 P.S. § 23158.
This Court has explained:
The adoption of a home rule charter acts to remove a municipality from the
operation of the code provisions enumerating the powers of that particular class of
municipality. Once a municipality adopts a home rule charter, “it is no longer a
city of the second class, a county of the third class, a borough or a township of the
first or second class, but a ‘home rule municipality’ and its ‘code’ is the [Home
Rule Law].”
Ziegler v. City of Reading, 142 A.3d 119, 131 (Pa. Cmwlth. 2016) (internal citations omitted).
Nonetheless, “[a]lthough a home rule municipality is not restrained by its former municipal code,
it is not prohibited from exercising powers provided thereunder.” Id. Thus, despite its home rule
status, the City may still exercise certain powers provided by the Second Class City Code. See Pa.
Rest., 211 A.3d at 824-25 (finding that the City’s status as a home rule municipality did not
preclude it from attempting to resort to the Second Class City Code as express authority for its
challenged ordinances).
2
Voucher Program (Section 8 Program).2 According to the Housing Authority of the
City of Pittsburgh (Housing Authority), 41% of City residents with housing vouchers
return them unused, due in part to their landlords’ refusal to accept the vouchers.
In December 2015, the City enacted Ordinance 2015-2062 (Ordinance). The
Ordinance amended certain provisions of the City’s Code of Ordinances by adding
a new protected class of persons based on the source of income used to pay rent.
The purpose of the Ordinance was to prevent residential property owners, real estate
brokers, and others from denying a person access to housing based on his or her
source of income.
Section 1 of the Ordinance defines “source of income” as follows:
All lawful sources of income or rental assistance program [sic],
including, but not limited to, earned income, child support, alimony,
insurance and pension proceeds, and all forms of public assistance
including federal, state and local housing assistance programs. This
includes the Section 8 Housing Choice Voucher Program.
Reproduced Record (R.R.) at 78a, 83a (emphasis added). Section 2 of the Ordinance
provides that the following acts shall be unlawful housing practices:
(a) For any owner, real estate broker or any other person to refuse to
sell, lease, sublease, rent, assign or otherwise transfer, or to refuse to
negotiate for the sale, lease, sublease, rental, assignment or other
transfer of, the title, leasehold or other interest in any dwelling to any
person, or to represent that any dwelling is not available for inspection,
sale, lease, sublease, rental, assignment or other transfer when in fact it
is so available, or otherwise to deny or withhold any dwelling from any
person because of . . . source of income . . . or to discriminate against,
segregate or assign quotas to any person or group of persons in
2
Housing is subsidized by the federal government pursuant to Section 8 of the United
States Housing Act of 1937, 42 U.S.C. § 1437f. The Section 8 Program is administered by the
United States Department of Housing and Urban Development (HUD). On the local level, the
Section 8 Program is administered by the public housing authority.
3
connection with the sale, lease, sublease, rental, assignment or other
transfer of the title, leasehold, or other interest in any dwelling or
dwellings.
(b) For any person, including any owner or real estate broker, to include
in the terms, conditions or privileges of any sale, lease, sublease, rental,
assignment or other transfer of any dwelling any clause, condition or
restriction discriminating against or requiring any other person to
discriminate against, any person in the use or occupancy of such
dwelling because of . . . source of income . . . of the user.
(c) For any person, including any owner or real estate broker, to
discriminate in the furnishing of any facilities or services for any
dwelling because of . . . source of income . . . of the user.
....
(f) For any real estate broker or real estate salesperson or agent, or any
other person for business or economic purposes, to induce, directly or
indirectly, or to attempt to induce directly or indirectly, the sale or rental
or the listing for sale or rental, of any dwelling by representing that a
change has occurred or will or may occur regarding the entry or
prospective entry into the neighborhood of a person or persons of a
particular . . . source of income . . . .
R.R. at 79a, 83a-85a (emphasis added).
On January 15, 2016, Apartment Association filed a Complaint for Equitable
Relief and Request for Declaratory Judgment against the City. In its Complaint,
Apartment Association alleged that the Ordinance violated both the Home Rule Law
and the Pennsylvania Constitution. It also sought a preliminary injunction to stay
enforcement of the Ordinance. On February 9, 2016, the Trial Court issued an Order
staying the implementation and enforcement of the Ordinance until further order of
the Trial Court.
4
On June 29, 2017, the City filed an Answer and New Matter, to which
Apartment Association replied on July 10, 2017. On October 13, 2017, the parties
filed Stipulations of Fact with the Trial Court.
On November 17, 2017, the City filed a Motion for Judgment on the
Pleadings, and Apartment Association filed a Motion for Summary Judgment. The
Trial Court heard argument on the Motions on January 25, 2018. Thereafter, on
March 14, 2018, the Trial Court granted Apartment Association’s Motion, denied
the City’s Motion, and declared the Ordinance invalid and unenforceable. The Trial
Court concluded as follows:
The City’s Ordinance makes participation in the Section 8 [P]rogram
mandatory. Landlords will be forced to comply with the numerous and
often burdensome requirements of the Section 8 [P]rogram. For
example, they will have to use the Housing Authority’s model lease
and/or submit a preferred lease to the Housing Authority for pre[-
]approval. That lease must include word[-]for[-]word provisions of the
HUD Tenancy Addendum. They will be prohibited from including
notice of termination waivers in leases and must accept a mandatory
“cure period” of five days in advance of issuing a Notice to Quit.
Landlords will be required to accept “reasonable rent” obligations as
established by the Housing Authority and provide at least 60 days’
notice of any change in rent amounts. They will have to obtain approval
from the Housing Authority to raise a tenant’s rent. Finally, landlords
will be forced to agree to month-to-month leases subsequent to an initial
one[-]year lease term. Neither Pennsylvania common law nor [the]
Landlord and Tenant Act of 1951[, Act of April 6, 1951, P.L. 69, as
amended, 68 P.S. §§ 250.101-250.602 (Landlord and Tenant Act),]
contain[s] such requirements.
There is no genuine issue of material fact as to whether the . . .
Ordinance places affirmative duties and requirements on residential
property owners, landlords and others in violation of the [Home Rule
Law]. Pennsylvania [c]ourts have consistently held that home rule
5
municipalities must comply with the limitations of Section 2962(f) of
the [Home Rule Law, 53 Pa. C.S. § 2962(f)].[3]
Trial Ct. Op., 3/14/18, at 4-5 (unpaginated). Therefore, because the Ordinance
placed affirmative duties and responsibilities on businesses, the Trial Court
concluded that the Ordinance violated Section 2962(f) of the Home Rule Law.
Following the City’s appeal, on March 12, 2019, an en banc panel of this
Court affirmed the Trial Court’s decision. This Court held that although non-
discrimination ordinances are a valid exercise of a home rule municipality’s police
powers, the Ordinance nonetheless violated Section 2962(f) of the Home Rule Law.
In reaching this conclusion, we explained:
While it is true that anti-discrimination ordinances are a valid exercise
of a municipality’s police powers, the Ordinance here . . . does more
than just ban discrimination against certain protected classes of people.
By defining “source of income” to include Section 8 Program subsidies,
the Ordinance in this case necessarily mandates that all landlords in the
City comply with the federal Section 8 Program requirements, when
previously their participation in the Section 8 Program was voluntary.
This is clearly an affirmative obligation and more invasive to the
operation of rental business than [a] general anti-discrimination
ordinance . . . .
Apartment Ass’n of Metro. Pittsburgh v. City of Pittsburgh, 205 A.3d 418, 425 (Pa.
Cmwlth.) (en banc), vacated and remanded, 217 A.3d 801 (Pa. 2019).
3
Section 2962(f) of the Home Rule Law states in relevant part:
A municipality which adopts a home rule charter shall not determine duties,
responsibilities or requirements placed upon businesses, occupations and
employers, . . . except as expressly provided by statutes which are applicable in
every part of this Commonwealth or which are applicable to all municipalities or
to a class or classes of municipalities. . . .
53 Pa. C.S. § 2962(f) (emphasis added).
6
On April 11, 2019, the City filed a Petition for Allowance of Appeal with the
Pennsylvania Supreme Court. On September 9, 2019, the Supreme Court granted
the Petition for Allowance of Appeal, vacated this Court’s March 12, 2019 Order,
and remanded the matter for reconsideration in light of Pennsylvania Restaurant. In
doing so, the Supreme Court directed this Court “to include in its review the sections
of the Second Class City Code and the Pennsylvania Human Relations Act[, Act of
October 27, 1955, P.L. 744, as amended, 43 P.S. §§ 951-963 (PHRA),] cited by the
City.” Supreme Ct. Remand Order, 9/9/19, at 1.
Analysis
The question presently before this Court is whether the Second Class City
Code or the PHRA expressly authorized the City to enact the Ordinance, which
prohibits property owners from discriminating against potential lessees based on
their sources of income. While the Ordinance defines “source of income” as
including “all forms of public assistance including federal, state and local housing
assistance programs,” R.R. at 78a, 83a (emphasis added), the focus of the parties’
arguments on appeal is the express inclusion of Section 8 Program vouchers in this
definition. That was also the focus of the Trial Court’s decision. The parties have
not presented any arguments, nor does the record contain any evidence, relating to
other state or local housing assistance programs encompassed by the source-of-
income definition, nor are we aware of what requirements or obligations such other
programs may place on residential landlords in the City. For this reason, we likewise
focus our analysis on the portion of the source-of-income definition pertaining only
to the federal Section 8 Program.
Under Section 2961 of the Home Rule Law, “[a] municipality which has
adopted a home rule charter may exercise any powers and perform any function not
7
denied by the Constitution of Pennsylvania, by statute or by its home rule charter.”
53 Pa. C.S. § 2961; see Pa. Const. art. IX, § 2. This provision must be liberally
construed in the municipality’s favor. See 53 Pa. C.S. § 2961 (“All grants of
municipal power to municipalities governed by a home rule charter under this
subchapter, whether in the form of specific enumeration or general terms, shall be
liberally construed in favor of the municipality.”). Our Court has recognized that
“[t]he essential principle underlying home rule is the transfer of authority to control
certain municipal affairs from the state to the local level. . . . This transference results
in home rule municipalities having broader powers of self[-]government than non-
home rule municipalities.” Hartman v. City of Allentown, 880 A.2d 737, 742 (Pa.
Cmwlth. 2005).
Notwithstanding a home rule municipality’s broad powers, Section 2962(f) of
the Home Rule Law imposes a limitation on the municipality’s authority to enact
certain types of legislation. This provision, commonly referred to as the “Business
Exclusion,” states:
A municipality which adopts a home rule charter shall not determine
duties, responsibilities or requirements placed upon businesses,
occupations and employers, including the duty to withhold, remit or
report taxes or penalties levied or imposed upon them or upon persons
in their employment, except as expressly provided by statutes which are
applicable in every part of this Commonwealth or which are applicable
to all municipalities or to a class or classes of municipalities. This
subsection shall not be construed as a limitation in fixing rates of
taxation on permissible subjects of taxation.
53 Pa. C.S. § 2962(f) (emphasis added).
The first question to be determined in cases where the Business Exclusion is
raised is whether the challenged ordinance imposes affirmative duties or
requirements on businesses. See Bldg. Owners & Managers Ass’n v. City of
8
Pittsburgh, 985 A.2d 711, 714-15 (Pa. 2009); Hartman, 880 A.2d at 746; Smaller
Mfrs. Council v. Council of Pittsburgh, 485 A.2d 73, 77 (Pa. Cmwlth. 1984). If the
court concludes that the ordinance places affirmative duties and responsibilities on
businesses, then the second question to be determined is whether the municipality’s
authority to enact the ordinance was “expressly provided by statutes which are
applicable in every part of this Commonwealth or which are applicable to all
municipalities or to a class or classes of municipalities.” 53 Pa. C.S. § 2962(f)
(emphasis added).4 As discussed more fully below, the “expressly provided by
statute[]” exception in the Business Exclusion was the focus of the Supreme Court’s
decision in Pennsylvania Restaurant.
1. Pennsylvania Restaurant
In Pennsylvania Restaurant, our Supreme Court considered whether two
ordinances enacted by the City of Pittsburgh violated the Business Exclusion: (1)
the Paid Sick Days Act (PSDA), which entitled employees of City businesses to
accrue paid sick leave;5 and (2) the Safe and Secure Buildings Act (SSBA), which
4
As in Pennsylvania Restaurant, “resolving the question presented requires us to seek
express statutory authority as conceived by the Business Exclusion. This principally constitutes
an exercise in statutory construction involving a question of law, which we address de novo.” Pa.
Rest., 211 A.3d at 822.
5
According to the Supreme Court:
[T]he PSDA provides that employees of employers with fifteen or more employees
are entitled to accrue up to forty hours of paid sick leave per year at a rate of one
hour of leave for every thirty-five hours worked. Employers with fewer than fifteen
employees also must provide paid sick leave at the rate of one hour of leave per
thirty-five hours worked. However, these employers may limit accrued leave to
twenty-four hours per year.
Pa. Rest., 211 A.3d at 818.
9
imposed education and training obligations on City building owners and their
employees to improve disaster preparedness and counterterrorism efforts.6 The
objectors in that case were various employee unions and nonprofit associations
whose members are business owners in the City. The objectors challenged both
ordinances on the ground that they imposed affirmative obligations and
responsibilities on private businesses in violation of the Business Exclusion. In
response, the City argued that the ordinances satisfied the exception in the Business
Exclusion, claiming that its authority to enact the ordinances was expressly
authorized by several different Pennsylvania statutes.
The Supreme Court began its analysis by discussing the historical and legal
background of the Home Rule Law. After examining the broad powers granted to
home rule municipalities, including their police powers, the Supreme Court
determined that the City’s enactment of the PSDA did not exceed its home rule
authority because the PSDA satisfied the exception in the Business Exclusion for
express statutory authorization. Pa. Rest., 211 A.3d at 832. The Court found such
express authorization in the Disease Prevention and Control Law of 1955 (DPCL),
Act of April 23, 1956, P.L. (1955) 1510, as amended, 35 P.S. §§ 521.1-521.21. In
particular, Section 16(c) of the DPCL permits municipalities with departments of
health to enact legislation “relating to disease prevention and control.” 35 P.S. §
521.16(c). In Pennsylvania Restaurant, the objectors did not dispute that mandating
paid sick leave for employees relates to disease prevention and control or that
providing paid sick leave to employees has a beneficial effect on public health. Pa.
6
The Supreme Court explained that “[t]he SSBA’s provisions apply to ‘covered
properties,’” which “encompasses commercial office buildings or complexes, retail buildings or
complexes, health care facilities, museums, and ‘similar cultural institutions’ occupying 100,000
or more square feet, as well as all colleges and universities, and all properties owned, managed, or
occupied, wholly or in part, by the City.” Pa. Rest., 211 A.3d at 818 (quoting the SSBA).
10
Rest., 211 A.3d at 828-29. Thus, the Court determined there was “no material
dispute that the PSDA is, at least in the literal sense, ‘an ordinance . . . relating to
disease prevention and control’” under the DPCL. Id. at 829.
Further, the Supreme Court declined to read the term “express” in an overly
strict manner, because doing so would “hamstring home-rule municipalities from
exercising their home-rule authority in any way that burdens businesses, even where
such burdens are incidental or de minimis.” Id. at 832. The Court explained:
It is unrealistic to expect the General Assembly to draft statutes
providing the sort of surpassing specificity [the objectors] would
demand, because it is impossible for any legislature to anticipate the
innumerable ways in which any given ordinance might affect a given
business’s receipts or complicate its administration.
Conversely, it is not unreasonable to anticipate that, when the
legislature authorizes municipalities to enact ordinances, rules, or
regulations in furtherance of disease prevention and control, it
recognizes that such an authorization is not self-executing, and may
entail action that burdens businesses in any number of ways, both
foreseeable and unforeseeable. Consequently, we must consider the
fact that the General Assembly did not more precisely cabin the
legislative and regulatory authority it expressly granted municipalities
in the DPCL in light of our obligation to construe ambiguous statutes
in favor of the public interest over private interests, and in favor of local
authority over state authority.
Id.
Applying these principles to its analysis of the PSDA, the Supreme Court held
that the DPCL provided the City with express statutory authority to legislate in
furtherance of disease prevention and control. The Court reasoned as follows:
The burden the PSDA presents to businesses is not insignificant. The
ordinance nonetheless bears a direct nexus with public health, and, all
things being equal, lies squarely within both the City’s traditional
11
police powers and the ambit of the DPCL. Consequently, the PSDA is
more like a “health or safety ordinance[]” that affects business than a
statute with its principal focus upon regulating business for its own
sake. . . . For this reason, we find the DPCL’s legislative authorization
to municipalities to “enact ordinances . . . relating to disease
prevention and control” such as the PSDA sufficiently clear to satisfy
the limited exception to the Business Exclusion. Accordingly, we hold
that the City did not exceed its home-rule authority in enacting the
PSDA.
Id. (Emphasis added.).
The Supreme Court reached a different conclusion with respect to the City’s
enactment of the SSBA, which imposed education and training obligations on
building owners and their employees to improve disaster preparedness and
counterterrorism efforts. The City argued that its “express” authority to enact the
SSBA arose from the Second Class City Code, the Home Rule Law, and the
Emergency Management Services Code (Emergency Code), 35 Pa. C.S. §§ 7101-
79a31. However, the Supreme Court found that none of these statutes provided
express authority to satisfy the exception to the Business Exclusion.
The City first cited Section 1(l) of the Second Class City Code, which
authorizes municipalities “[t]o provide for the preparation and distribution by the
Department of Public Safety of rules and regulations to minimize the danger of fire
and lessen fire waste.” Act of May 13, 1915, P.L. 297, 53 P.S. § 25092. The
Supreme Court found that while the purpose of this provision is to “‘minimize the
danger of fire and lessen fire waste,’” that “[was] not the core function of the SSBA.”
Pa. Rest., 211 A.3d at 834 (quoting 53 P.S. § 25092). The City also cited Section
1(a) of the Second Class City Code, which allows for building inspections “to
decrease and prevent fire, the spread of fire, and fire waste, loss of life from fire, and
loss of life or damage to property from unsafe or improper construction or design.”
12
Act of May 13, 1915, P.L. 297, 53 P.S. § 25081. The Court observed that both of
these provisions “appear in an Article of the Second Class City Code covering ‘Fire
Prevention’ and by their terms apply only to fire-related concerns.” Pa. Rest., 211
A.3d at 834. The Court found, however that fire-related concerns comprised only a
small part of the disaster preparedness requirements of the SSBA. Id.
Likewise, the Supreme Court rejected the City’s reliance on the Home Rule
Law’s provisions authorizing the enactment of building codes and safety regulations,
because there was an insufficient nexus between such provisions and the SSBA’s
“education and training requirements.” Id. at 835. The Court found that “the SSBA
impose[d] an array of time-consuming education requirements” to “ensure that
employees of certain businesses and building facilities are capable of serving certain
protective and investigative functions in the event of a plethora of events that imperil
the health and safety of such facilities’ occupants.” Id. at 819.7
7
The Supreme Court summarized the SSBA’s training requirements as follows: “Under
the SSBA, within 180 days of its enactment for current employees, and within sixty days of hiring
for new employees thereafter, covered security officers must receive a minimum of forty hours of
training and annual refreshers of at least eight hours” on an array of security-related topics. Pa.
Rest., 211 A.3d at 833 (footnote omitted). Moreover, “[e]mployers are required by the SSBA to
provide fifteen initial hours of training and a refresher course of unspecified duration on a triannual
basis to building service employees in the subjects specified” in the SSBA. Id. at 833-34 (footnote
omitted). Finally, the SSBA “imposes certification requirements for training schools and
instructors, to be overseen by the [City’s] Fire Bureau, which is responsible for the implementation
and enforcement of the SSBA.” Id. at 834.
13
Finally, the Supreme Court found an insufficient nexus between Sections
7501(a)8 and 75039 of the Emergency Code and the SSBA’s extensive training and
education requirements. Id. at 836-37. The Court explained that although the
Emergency Code references training programs, “in context it is difficult to conclude
that the legislature intended this as an express grant of authority to impose any
training programs upon any private employers and any private employees that a
municipality can tenuously connect to disaster preparedness.” Id. at 836 (emphasis
added). Moreover, after reviewing the obligation in Section 7503 of the Emergency
Code to “[e]stablish, equip and staff an emergency operations center,” the Court
determined that “[n]othing about this statutory language suggests that it can support
imposing broad obligations upon virtually all private building staff, from security to
custodial.” Id. at 836-37 (emphasis added).
At the conclusion of the Opinion, the Supreme Court summarized its holdings
as follows:
What constitutes an express grant of authority to “determine
duties, responsibilities or requirements placed upon businesses,
8
Section 7501(a) of the Emergency Code provides that “[e]ach political subdivision of this
Commonwealth is directed and authorized to establish a local emergency management
organization,” which “shall have responsibility for emergency management, response and
recovery within the territorial limits of the political subdivision . . . and, in addition, shall conduct
such services outside of its jurisdictional limits.” 35 Pa. C.S. § 7501(a).
9
Section 7503 of the Emergency Code requires each political subdivision to adopt an
“[i]ntergovernmental [c]ooperation agreement” with other political subdivisions. 35 Pa. C.S. §
7503. Section 7503 further requires cooperating political subdivisions to, inter alia, maintain
emergency management plans “for the prevention and minimization of injury and damage caused
by disaster, prompt and effective response to disaster and disaster emergency relief and recovery,”
“[e]stablish, equip, and staff an emergency operations center,” “provide individual and
organizational training programs to insure prompt, efficient and effective disaster emergency
services,” and “[a]dopt and implement precautionary measures to mitigate the anticipated effects
of disaster.” 35 Pa. C.S. § 7503(1)-(3), (5).
14
occupations and employers” is a vexing question. If we interpret the
word “express” too stringently, virtually any incidental burden upon
employers arising from a local ordinance will be barred. If we interpret
it too broadly, we subvert the General Assembly’s manifest intent to
limit the burdens that a home-rule municipality can impose upon
businesses. Thus, we must find a middle ground.
Even if this case does not pronounce the ever-elusive bright-line
rule, it enables us to bracket the gray area between what is and is not
allowed by the limitations upon business regulation imposed by the
Business Exclusion. While the PSDA certainly burdens [City]
employers, it clearly falls within the ambit of the City’s express
statutory authority to legislate in furtherance of disease control and
prevention.
Conversely, the City fails to identify any statutory authority
sufficient to sustain the SSBA. While the training that the SSBA
mandates may well have a salutary public effect in disaster
management, the measure’s multifarious provisions simply want for
any statutory authority, express or otherwise. For owners and operators
of qualifying facilities, maintaining and securing those facilities is a
major, if not principal, function, and the definitions of “security officer”
and “building service employee,” are sufficiently broad to capture, at
least as to some properties, virtually every individual employed by the
building’s management. For the foregoing reasons, we must conclude
that no statutory provision cited by the City comes close to authorizing
such requirements.
Id. at 837-38 (internal citations omitted) (emphasis added). Therefore, the Supreme
Court upheld the PSDA and struck down the SSBA.10
10
Justice Wecht authored the Majority Opinion in Pennsylvania Restaurant. With regard
to Part IV of the Opinion, containing the legal analysis of the PSDA and the SSBA, each subsection
garnered majority support. Justice Wecht’s disposition upholding the PSDA was joined by
Justices Todd, Donohue, and Dougherty. Justice Wecht’s disposition striking down the SSBA was
joined by Chief Justice Saylor and Justices Baer, Todd, Donohue, and Mundy.
Chief Justice Saylor authored a Concurring and Dissenting Opinion, which was joined by
Justices Baer and Mundy. Chief Justice Saylor stated that he would have struck down the PSDA
15
2. Application of the Exception to the Business Exclusion11
In the instant matter, the City contends that both the Second Class City Code
and the PHRA provided express statutory authorization for its enactment of the
Ordinance. Applying the principles set forth in Pennsylvania Restaurant, we will
address each statute in turn.
a. The Second Class City Code
The City first asserts that the Second Class City Code expressly authorized its
enactment of the Ordinance by granting the City broad police powers over its
residents. Specifically, Section 3 of the Second Class City Code authorizes the City
[t]o make all such ordinances, by-laws, rules and regulations, not
inconsistent with the Constitution and laws of this Commonwealth, as
may be expedient or necessary, in addition to the special powers in this
section granted, for the proper management, care and control of the city
and its finances, and the maintenance of the peace, good government
and welfare of the [C]ity, and its trade, commerce and manufactures . .
..
53 P.S. § 23158 (emphasis added). According to the City, this broad authority to
exercise its police powers necessarily includes the power to enact laws that protect
as well as the SSBA. Justice Baer authored a separate Concurring and Dissenting Opinion, which
was joined by Chief Justice Saylor and Justice Mundy. Justice Dougherty also authored a
Concurring and Dissenting Opinion, stating that he would have upheld both the PSDA and the
SSBA.
11
As discussed in the Background section of this Opinion, supra, an en banc panel of this
Court previously determined that the Ordinance at issue here places affirmative duties,
responsibilities, and requirements on businesses in violation of the Business Exclusion. Apartment
Ass’n, 205 A.3d at 425. Although the Supreme Court vacated our prior Order, its directive to
reconsider our decision in light of Pennsylvania Restaurant does not abrogate our conclusion that
the Ordinance places affirmative duties on businesses. In fact, for Pennsylvania Restaurant’s
analysis to even apply, the Ordinance must place affirmative duties on businesses. See 53 Pa. C.S.
§ 2962(f). Consequently, the issue before this Court on remand, as the parties have outlined in
their briefs, is limited to whether the City satisfied the “expressly authorized by statute[]”
exception to the Business Exclusion.
16
its residents against all forms of discrimination, including source-of-income housing
discrimination. We disagree.
In Pennsylvania Restaurant, the Supreme Court specifically addressed the
issue of whether Section 3 of the Second Class City Code provided express
authorization for the City’s enactment of the SSBA, which required private building
owners to provide disaster preparedness education and training to their employees.
The Supreme Court rejected the City’s argument that the general police powers in
Section 3 provided the express authorization necessary to satisfy the exception to the
Business Exclusion, as follows:
While we have rejected the proposition that the “express authorization”
precludes any generality whatsoever, we certainly do not suggest that
what amounts to a broad account of traditional police powers
constitutes “express” authorization for purposes of the Business
Exclusion exception. Were we to do so, the exception would devour
the rule quite completely. Section[] [3 of the Second Class City Code,
53 P.S. § 23158] amount[s] to a general warrant to legislate in service
of the general health and welfare, which lies within a home-rule
municipality’s powers absent any statutory prohibition. Here,
however, the Business Exclusion furnishes such a prohibition.
Consequently, the City’s resort to the [Second Class City Code] fails.
211 A.3d at 835 (emphasis added).
Based on the Supreme Court’s reasoning in Pennsylvania Restaurant, we
conclude that the City failed to demonstrate a direct nexus between Section 3 of the
Second Class City Code and the Ordinance to satisfy the exception in the Business
Exclusion. Nothing in Section 3 of the Second Class City Code permits the City to
enact legislation requiring residential landlords to participate in an otherwise
voluntary federal housing subsidy program. See id. (noting that although the
education and “training that the SSBA mandates may well have a salutary public
17
effect in disaster management, the [SSBA’s] multifarious provisions” encompassed
“virtually every individual employed by [a] building’s management,” thereby
imposing onerous obligations on building owners without express authorization in
violation of the Business Exclusion).
The City cites Hartman in support of its contention that it was authorized to
enact the Ordinance prohibiting source-of-income discrimination pursuant to its
broad police powers to promote the general welfare of its residents. However, we
conclude that its reliance on Hartman is misplaced. In Hartman, this Court held that
the non-discrimination ordinance at issue did not violate the Business Exclusion of
the Home Rule Law because it did not place affirmative duties or requirements on
businesses or employers. Hartman, 880 A.2d at 746-47. Rather, the ordinance
merely banned discrimination in employment, housing, and public accommodations
against certain protected classes of people. Id.; see Bldg. Owners, 985 A.2d at 715
(recognizing that “[t]he ordinance in Hartman simply disallowed discrimination
based upon sexual orientation and gender identity generally”). In Hartman, we
concluded that the Business Exclusion did not apply because the ordinance did not
place affirmative obligations on private businesses. Thus, we did not consider
whether the municipality had express statutory authority to enact the ordinance, as
we must do here.
The City also asserts that without the ability to carry out its police powers by
enacting non-discrimination ordinances, a home rule municipality would have
substantially less power than its non-home rule counterparts, which contravenes the
purpose of home rule. However, the Pennsylvania Restaurant Court explained that
“a home-rule municipality cannot, except where specified clearly by statute or the
municipality’s own charter, find itself vested with less power than a non-home-rule
18
counterpart.” Pa. Rest., 211 A.3d at 824 (emphasis added). In the instant case, as
in Pennsylvania Restaurant, we conclude that “the Business Exclusion furnishes
such a prohibition.” Id. at 835.
For these reasons, we reject the City’s contention that the grant of police
powers in Section 3 of the Second Class City Code provides the express
authorization necessary for the enactment of legislation that regulates private
businesses, which this Ordinance does by requiring residential landlords to
involuntarily submit to the requirements of the Section 8 Program.12 Therefore, we
conclude that the Second Class City Code alone does not provide the requisite
statutory authority to satisfy the exception to the Business Exclusion.
b. The PHRA
Next, the City contends that the PHRA expressly authorized its enactment of
the Ordinance. Section 2(a) of the PHRA prohibits “[t]he denial of equal
employment, housing and public accommodation opportunities” to persons “by
reason of their race, color, familial status, religious creed, ancestry, age, sex, national
origin, handicap or disability, use of guide or support animals because of the
blindness, deafness or physical handicap of the user or because the user is a handler
or trainer of support or guide animals.” 43 P.S. § 952(a) (emphasis added).
12
Our Court has recognized:
[A] law which purports to be an exercise of the police power must not be
unreasonable, unduly oppressive or patently beyond the necessities of the case, and
the means which it employs must have a real and substantial relation to the objects
sought to be attained. Under the guise of protecting the public interests the
legislature may not interfere with private business or impose unusual and
unnecessary restrictions upon lawful occupations.
Johnson v. Allegheny Intermediate Unit, 59 A.3d 10, 21 (Pa. Cmwlth. 2012) (en banc) (quoting
Adler v. Montefiore Hosp. Ass’n, 311 A.2d 634, 640-41 (Pa. 1973)) (emphasis added).
19
As express statutory authority for the source-of-income Ordinance, the City
cites Section 12.1 of the PHRA, which provides, “The legislative body of a political
subdivision may, by ordinance or resolution, authorize the establishment of
membership in and support of a Local Human Relations Commission.” 43 P.S. §
962.1.13 The City also cites Section 12 of the PHRA, which provides in relevant
part:
(a) The provisions of [the PHRA] shall be construed liberally for the
accomplishment of the purposes thereof, and any law inconsistent with
any provisions hereof shall not apply.
(b) . . . [N]othing contained in [the PHRA] shall be deemed to repeal
or supersede any of the provisions of any existing or hereafter adopted
municipal ordinance, municipal charter or of any law of this
Commonwealth relating to discrimination because of race, color,
familial status, religious creed, ancestry, age, sex, national origin or
handicap or disability[] . . . .
43 P.S. § 962(a), (b) (emphasis added).
The City argues that the Ordinance at issue here, like the PHRA, is aimed at
protecting residents against discrimination. The City claims that, by authorizing a
municipality to establish its own human relations commission to combat
discriminatory practices, see 43 P.S. § 962.1,14 the General Assembly intended to
preserve a local municipality’s power to enact greater protections against
discrimination in its own community.
The City analogizes the Ordinance in this case to the PSDA at issue in
Pennsylvania Restaurant, which the Supreme Court upheld. In that case, the
13
Added by the Act of January 24, 1966, P.L. (1965) 1523.
14
In its brief, the City notes that it has its own Commission on Human Relations. City’s
Br. at 26 n.1.
20
Supreme Court explained that “[w]hile the PSDA certainly burdens [City]
employers, it clearly falls within the ambit of the City’s express statutory authority
[under the DPCL] to legislate in furtherance of disease control and prevention.” Pa.
Rest., 211 A.3d at 837. Likewise, the City argues that the Ordinance here imposes
only “incidental” burdens on landlords and “clearly falls within the ambit of the
City’s express statutory authority [under the PHRA] to legislate to provide
protections for its residents in the area of anti-discrimination.” City’s Br. at 29. We
disagree.
Notably, while Section 2(a) of the PHRA prohibits housing discrimination
against certain classes of people, see 43 P.S. § 952(a), it does not identify “source of
income” as a protected class. The City added the source-of-income class to the
Ordinance because it determined that: (1) 41% of City residents with housing
vouchers return them unused due to their landlords’ refusal to accept vouchers; (2)
discrimination against voucher holders is often a pretext for discrimination based on
race, national origin, and familial status; and (3) due to landlords’ refusal to accept
vouchers, voucher holders are limited to housing choices in high-poverty
neighborhoods. See R.R. at 82a-83a.
According to the City, it is irrelevant that “source of income” is not an
enumerated protected class in the PHRA. The City contends that it is permitted to
add a protected class to the Ordinance as it deems necessary for the welfare of its
residents. As the City points out in its brief, “[t]he City added sex in 1969, disability
and age in 1980, sexual orientation in 1990, familial status in 1992, gender identity
in 2014, and status as a survivor of domestic violence in 2016 to the list of prohibited
bases of discrimination” in the Ordinance. City’s Br. at 28.
21
The problem with the City’s position, however, is that, unlike the addition of
the above classes to the Ordinance, the addition of the “source-of-income” class does
more than just ban housing discrimination based on source of income. By expressly
defining “source of income” to include federal housing assistance, and specifically
Section 8 Program vouchers, the Ordinance requires residential landlords to
participate in the Section 8 Program, when previously their participation was wholly
voluntary.
The Trial Court set forth the obligations imposed on landlords who participate
in the Section 8 Program as follows:
[Under the Ordinance, l]andlords will be forced to comply with the
numerous and often burdensome requirements of the Section 8
[P]rogram. For example, they will have to use the Housing Authority’s
model lease and/or submit a preferred lease to the Housing Authority
for pre[-]approval. That lease must include word[-]for[-]word
provisions of the HUD Tenancy Addendum. They will be prohibited
from including notice of termination waivers in leases and must accept
a mandatory “cure period” of five days in advance of issuing a Notice
to Quit. Landlords will be required to accept “reasonable rent”
obligations as established by the Housing Authority and provide at least
60 days’ notice of any change in rent amounts. They will have to obtain
approval from the Housing Authority to raise a tenant’s rent. Finally,
landlords will be forced to agree to month-to-month leases subsequent
to an initial one[-]year lease term.
Trial Ct. Op., 3/14/18, at 4-5 (unpaginated); see also R.R. at 80a, 89a-107a (outlining
the requirements of the Section 8 Program Administrative Plan and applicable
federal regulations).
In addition, a landlord participating in the Section 8 Program is required to
enter into a Housing Assistance Payment (HAP) Contract with the Housing
Authority, which is separate from the lease agreement between the landlord and his
or her tenant. The HAP Contract also contains a tenancy addendum that sets forth
22
the duties and obligations of both the landlord and the tenant under the HAP
Contract. See R.R. at 38a, 80a, 99a-100a, 106a. Given the nature and extent of the
Section 8 Program requirements, we cannot conclude that mandating landlords’
participation in the Section 8 Program is merely an “incidental” burden, as the City
suggests.
Nor do we find express authorization for the imposition of these requirements
in the PHRA. The Ordinance here is more akin to the SSBA at issue in Pennsylvania
Restaurant, which the Supreme Court struck down under the Business Exclusion.
The Court determined that Section 2962(4) of the Home Rule Law – which gives
home rule municipalities the power to enact building codes and safety regulations –
did not authorize the City to enact an ordinance imposing extensive safety education
and training obligations on private building owners in furtherance of disaster
preparedness. Pa. Rest., 211 A.3d at 835. The Court explained that Section
2962(c)(4) pertains principally to building codes, which is “a far cry from
authorizing staff education and training requirements in subjects with little or no
connection to building codes generally.” Id. The Court also rejected the City’s
reliance on the provisions of the Emergency Code relating to safety training, finding
that “it is difficult to conclude that the legislature intended this [provision] as an
express grant of authority to impose any training programs upon any private
employers and any private employees that a municipality can tenuously connect to
disaster preparedness.” Id. at 836. In striking down the SSBA, the Supreme Court
found that the shared policy objective between the SSBA and the Emergency Code
was insufficient to justify the City’s imposition of affirmative duties on private
businesses to further that objective. Id.
23
Similarly, while the PHRA is aimed at protecting citizens from
discrimination, the Ordinance here goes far beyond that aim. By expressly including
federal housing subsidies in the definition of “source of income,” the Ordinance
mandates that residential landlords in the City participate in the Section 8 Program
and comply with its numerous, and often burdensome, regulations. See Trial Ct.
Op., 3/14/18, at 4 (unpaginated). Just as the Supreme Court in Pennsylvania
Restaurant determined that the City cannot require private building owners to
educate and train their employees in emergency management for the purpose of
disaster preparedness, see Pa. Rest., 211 A.3d at 835-37, the City also cannot compel
private landlords to participate in a voluntary federal housing subsidy program. See
Inclusive Cmtys. Project, Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019)
(recognizing that “[l]andlord participation in the [Section 8] voucher program is
voluntary” under federal law); see also Salute v. Stratford Greens Garden
Apartments, 136 F.3d 293, 300 (2d Cir. 1998) (“[T]he voluntariness provision of
Section 8 reflects a congressional intent that the burdens of Section 8 participation
are substantial enough that participation should not be forced on landlords, either as
an accommodation to handicap or otherwise.”). We agree with Apartment
Association that the Ordinance here “exemplifies the very essence of the invasive
regulations that [the Business Exclusion] is designed to prevent, and strictly
prohibits.” Bldg. Owners, 985 A.2d at 715-16.15
15
The City also asserts that several municipalities across the Commonwealth and the
United States have enacted similar legislation prohibiting source-of-income discrimination,
thereby demonstrating the validity of this Ordinance. See City’s Br. at 30-32. In particular, the
City points to a similar ordinance enacted by the Borough of State College, Pennsylvania, another
home rule municipality. According to the City, the State College ordinance makes it an unlawful
housing practice to discriminate against individuals based on “source of income.” See City’s Reply
Br. at 18-19. However, the City does not include in its discussion how the State College ordinance
24
We conclude that the PHRA does not provide express statutory authority for
the City’s enactment of the Ordinance.
Conclusion
In sum, applying the Supreme Court’s reasoning in Pennsylvania Restaurant
to the source-of-income Ordinance, we conclude that the City has failed to satisfy
the exception to the Business Exclusion of the Home Rule Law. There is an
insufficient nexus between the cited provision of the Second Class City Code or the
cited provisions of the PHRA and the Ordinance’s mandate that all residential
landlords in the City participate in the federal Section 8 Program.
The requirements imposed on residential landlords by the source-of-income
Ordinance are similar in scope to those imposed on private building owners by the
SSBA in Pennsylvania Restaurant. The SSBA’s provisions applied to all large-
scale commercial office buildings, retail buildings, hospitals, museums, colleges,
and universities in the City. Pa. Rest., 211 A.3d at 818. The SBBA mandated that
the owners of such properties provide 40 hours of safety and disaster preparedness
training, followed by annual 8-hour refresher courses, to their security officers. Id.
at 833. Property owners were also required to provide 15 hours of initial training,
followed by tri-annual refresher courses, to their building service employees. Id.
Further, the SSBA mandated that all safety training instructors obtain numerous
certifications, regulated and overseen by the City’s Fire Bureau. Id.
defines “source of income,” nor does the City indicate whether the State College ordinance
expressly includes federal housing subsidies or Section 8 Program vouchers in its definition of
“source of income.” The State College ordinance is also not included in the record on appeal. In
any event, the fact that another home rule municipality has enacted a source-of-income ordinance
is irrelevant to our inquiry here, as there is no indication in the record that the State College
ordinance has ever been challenged in, or reviewed by, any court under the Business Exclusion of
the Home Rule Law.
25
In striking down the SSBA under the Business Exclusion, the Supreme Court
determined that the Emergency Code did not provide the City express “authority to
impose any training programs upon any private employers and any private
employees that [the City could] tenuously connect to disaster preparedness.” Id. at
836. The Court further found nothing in the Emergency Code to “support imposing
broad obligations upon virtually all private building staff” in the City. Id. at 836-37.
The Court held that the shared policy objective between the SSBA and the
Emergency Code did not justify the City’s imposition of affirmative duties on private
businesses to further that objective. Id. at 836.
Likewise, the Ordinance here broadly encompasses all property owners who
operate residential rental businesses in the City. By defining “source of income” to
include federal housing assistance and Section 8 Program vouchers, the Ordinance
goes far beyond its intended objective of protecting City residents from housing
discrimination. The City has now made a voluntary federal program mandatory for
all residential landlords in the City. As a consequence, those landlords will be
required to enter into contracts with the Housing Authority, accept rental payments
from the Housing Authority, and comply with the numerous terms and conditions
applicable to Section 8 Program participants prescribed by the federal government.
As in Pennsylvania Restaurant, we conclude that “no statutory provision cited by
the City comes close to authorizing such requirements.” Id. at 838. While the City’s
enactment of the Ordinance was undoubtedly well intended, we find that the
Ordinance places more than mere “incidental or de minimis” burdens on private
businesses in violation of the Business Exclusion. Id. at 832; see Salute, 136 F.3d
at 301 (“[T]he burden of participating in the Section 8 [P]rogram cannot be viewed
26
as imposing only reasonable costs or insubstantial burdens, if only because Congress
decided this issue by making participation voluntary.”).
Accordingly, because we conclude that the City has not established express
statutory authority to enact the source-of-income Ordinance pursuant to
Pennsylvania Restaurant, we affirm the Trial Court’s Order.
__________________________________
ELLEN CEISLER, Judge
27
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Apartment Association of Metropolitan :
Pittsburgh, Inc. :
:
v. : No. 528 C.D. 2018
:
The City of Pittsburgh, :
Appellant :
ORDER
AND NOW, this 12th day of March, 2020, the Order of the Court of Common
Pleas of Allegheny County, entered March 14, 2018, is hereby AFFIRMED.
__________________________________
ELLEN CEISLER, Judge