Katrina Hare v. David S. Brown Enterprises, Ltd., No. 32, September Term, 2024.

DISCRIMINATION – STATE GOVERNMENT § 20-705(1)-(2) – SOURCE-OF- INCOME DISCRIMINATION In 2020, the Maryland General Assembly passed the Housing Opportunities Made Equal (“HOME”) Act. See 2020 Md. Laws, Ch. 117. The HOME Act added “source of income” to a list of prohibited considerations in the rental or sale of housing. Md. Code Ann., State Gov’t § 20-705 (2021 Repl., 2024 Supp.). The appellee, the owner of an apartment complex, applies a minimum-income requirement to applicants for rental units. In doing so, the owner treats all income in the same manner, adding it together, regardless of source, and assessing whether the combined total exceeds 2.5 times the full gross rent for the applicable unit. The appellant is a recipient of a housing voucher who sought to rent an apartment in the owner’s complex. Although the appellant’s non-voucher income is more than six times the portion of rent for which she would have been responsible, the combination of her non-voucher income and the amount of her voucher subsidy falls short of 2.5 times the full gross rent for the unit. The owner rejected her application for failure to meet its minimum-income requirement. The appellant sued, contending that that requirement, as applied to her, constitutes impermissible source-of-income discrimination in violation of § 20-705. The Circuit Court for Baltimore County awarded summary judgment to the owner. The Supreme Court of Maryland held that the fact that the owner counted voucher income in the same manner as other sources of income for purposes of meeting its minimum-income requirement did not entitle the owner to summary judgment because it does not resolve the appellant’s disparate impact claim. In a disparate impact claim, a plaintiff asserts that a facially neutral policy has a disparate impact on a protected individual or group that is not justified by a legitimate, nondiscriminatory reason. Circuit Court for Baltimore County Case No. C-03-CV-22-004201 Argued: May 5, 2025

IN THE SUPREME COURT OF MARYLAND No. 32 September Term, 2024 ______________________________________ KATRINA HARE v. DAVID S. BROWN ENTERPRISES, LTD. ______________________________________ Fader, C.J., Watts, Booth, Biran, Gould, Eaves, Killough, JJ. ______________________________________ Opinion by Fader, C.J. Watts and Gould, JJ., concur. Pursuant to the Maryland Uniform Electronic Legal ______________________________________ Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. Filed: July 28, 2025 2025.07.28 16:04:54 -04'00' Gregory Hilton, Clerk In 2020, the Maryland General Assembly passed the Housing Opportunities Made Equal (“HOME”) Act. See 2020 Md. Laws, Ch. 117. The HOME Act added “source of income” to a list of prohibited considerations in the rental or sale of housing, 1 making it unlawful, subject to certain exceptions, to: (1) refuse to sell or rent after the making of a bona fide offer, refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of . . . source of income; [or] (2) discriminate against any person in the terms, conditions, or privileges of the sale or rental of a dwelling . . . because of . . . source of income[.] Id., codified at Md. Code Ann., State Gov’t § 20-705(1)-(2) (2021 Repl., 2024 Supp.). The primary purpose of the HOME Act was to prevent discrimination against people who use vouchers to pay for some or all of the cost of their housing. At issue here is whether the appellee, David S. Brown Enterprises, Ltd. (“DSB”), violated § 20-705 by refusing to rent an apartment to the appellant, Katrina Hare. Ms. Hare is a voucher recipient. She sought to rent an apartment from DSB with a monthly rent of $1,590. Ms. Hare had a housing voucher that would have covered $1,464 of that amount, leaving her responsible for just $126 a month. However, when reviewing Ms. Hare’s rental application, DSB applied a minimum-income requirement by which it required renters to demonstrate monthly income that is at least 2.5 times the monthly rental payment. Ms. Hare’s only source of income outside of her voucher was supplemental security income of $841 per month. DSB added the amount of Ms. Hare’s voucher subsidy to her differently situated and appropriately comparable group, and, if so, whether DSB can identify a legitimate business need for that practice. We will therefore vacate the judgment of the circuit court and remand for further proceedings consistent with this opinion.

BACKGROUND

Section 20-702(a) of the State Government Article declares:

It is the policy of the State:

(1) to provide for fair housing throughout the State to all, regardless of race, color, religion, sex, familial status, national origin, marital status, sexual orientation, gender identity, disability, source of income, or military status; and (2) to that end, to prohibit discriminatory practices with respect to residential housing by any person, in order to protect and ensure the peace, health, safety, prosperity, and general welfare of all.

In expressly drawing a connection between prohibiting discriminatory housing practices and ensuring “the peace, health, safety, prosperity, and general welfare of all,” the General Assembly recognized the importance of stable housing, regardless of status, as a foundation for achieving health and prosperity. Without stable housing, it is “increasingly difficult for low-income families to enjoy a kind of psychological stability, which allows people to place an emotional investment in their home, social relationships, and community; school stability, which increases the chances that children will excel in their studies and graduate; or community stability, which increases the chances for neighbors to form strong bonds and to invest in their neighborhoods.” Matthew Desmond & Rachel Tolbert Kimbro, Eviction’s Fallout: Housing, Hardship, and Health, 94 Soc. Forces 295, 296 (2015) (citation omitted). An absence of stable housing can also lead to involvement in the criminal justice system and consequent criminal records that make future employment difficult. See Maria Foscarinis, Downward Spiral: Homelessness and Its Criminalization, 14 Yale L. & Pol’y Rev. ^[1], 1-2 (1996). Indeed, housing instability can lead to a “vicious and multifarious” spiral of evictions, criminal activity, and credit defaults, all of which can make it difficult to ever regain stability. See Vicki Been & Leila Bozorg, Spiraling: Evictions and Other Causes and Consequences of Housing Instability, 130 Harv. L. Rev. 1408, 1410-12 (2017) (reviewing Matthew Desmond, Evicted: Poverty and Profit in the American City (2016)).

Housing instability has also long been linked with forms of historical and pervasive discrimination, including that based on race, religion, and ethnicity. Karl Taeuber, The Contemporary Context of Housing Discrimination, 6 Yale L. & Pol’y Rev. 339, 339 (1988) (noting that the “racial structure of housing in the United States is rooted in history”). See generally id. (discussing the history of housing discrimination against Black Americans); Samantha Ondrade, Enforcement of the Fair Housing Act and Equal Credit Opportunity Act to Combat Redlining, 70 Dep’t of Just. J. Fed. L. & Prac. 247 (2022) (the same); A. Mechele Dickerson, Systemic Racism and Housing, 70 Emory L.J. 1535 (2021) (discussing systemic racism in housing against minority home buyers); Mary Ellen Stratthaus, Flaw in the Jewel: Housing Discrimination Against Jews in La Jolla, California, 84 Am. Jewish His. 189 (1996) (providing an example of housing discrimination against Jews).

A. Vouchers

In 1937, Congress enacted the United States Housing Act, which established the Housing Choice Voucher Program. Formerly known as the Section 8 voucher program, this program is administered through local public housing agencies. ^[24] C.F.R. § 982.1(a). As described in a guide published by the local public housing agency relevant here, the Baltimore County Department of Housing and Community Development (the “Local Department”), the program “helps low and moderate income families rent housing in the private market by paying a portion of the families’ rent each month.” 2

Eligibility for vouchers depends primarily on a household’s annual income compared to the area median income, family size, and citizenship status. See 24 C.F.R. § 982.201. At least 75% of housing choice vouchers must go to “extremely low-income” households, which generally means households at or below the higher of the federal poverty line or 30% of area median income. 42 U.S.C. § 1437n(b)(1); 24 C.F.R. § 5.603(b). Remaining vouchers may be awarded to households that are “very low income” or “low income,” which generally means at or below 50% or 80% of the area median income, respectively. ^[24] C.F.R. § 5.603(b). 3 Approximately 54,000 households in Maryland used a housing choice voucher in 2024; about 78% of them were “extremely low-income.” 4 The purpose of the housing choice voucher program is to “help[] low-income families, elderly persons, veterans and disabled individuals afford housing in the private market.” 5 To ensure that the units for which it provides vouchers are affordable, the program helps families pay rent for units they might otherwise not be able to afford while also ensuring that ample funds remain to cover other living expenses. To do so, the program establishes the recipient’s contribution to rent at an amount the recipient is considered able to pay—generally set at 30% of their monthly adjusted income and never more than 40% of such income—and provides a subsidy to make up the rest. ^[6] The 30% limitation implements the federal standard for determining when housing is affordable. ^[7] The subsidy the local public housing agency will pay for a housing unit priced at or below the agency’s “payment standard” 8 is the difference between the recipient’s payment and the gross rent charged for the unit. ^[24] C.F.R. §§ 982.4(b), 982.505(b), 982.508. If the gross rent exceeds the payment standard, the recipient is generally responsible for paying the excess. See id. §§ 982.508, 982.515; see also Program Participant Reference Guide, above at note 2, at 38. There are exceptions, however, one of which was applied in this case. Due to her disability, Ms. Hare received an accommodation pursuant to which the local public housing agency approved a unit that exceeded the payment standard, although apparently only slightly. Accordingly, the agency would have paid an even greater share of Ms. Hare’s rent—in this case, more than 90 percent.

Subsidies are generally paid directly to the owner of the housing unit, never touching the hands of the tenant. ^[24] C.F.R. § 982.4(b) (defining “[h]ousing assistance payment” as the “monthly assistance payment by” a public housing authority “to the owner for rent . . . under the family’s lease”). The local housing agency makes payments to tenants only when the amount of the subsidy exceeds the amount due to the owner of the unit. Id. In that case, the excess is paid to the tenant as a “[u]tility reimbursement.” Id.

In summary, voucher subsidies are purposely calculated to make quality housing units available and affordable to low-income, eligible tenants. Local public housing agencies seek to accomplish that by establishing a tenant payment obligation at an amount the tenant can afford, see Program Participant Reference Guide, above at note 2, at 36, and then paying the remainder of gross rent due directly to the owner of the unit.

B. Source-of-Income Discrimination in Housing and the HOME Act

Recipients of housing choice vouchers are, by definition, low-income, with at least three-quarters of them having incomes 30% of or less than the area median income. See

42 U.S.C. § 1437n(b)(1); 24 C.F.R. § 5.603(b). Recipients are also disproportionately minorities, 9 who are therefore disproportionately affected when owners of housing units who are not required to accept vouchers choose not to do so. See Robert G. Schwemm, Source-of-Income Discrimination and the Fair Housing Act, 70 Case W. Rsrv. L. Rev. 573, 648 (2020) (describing how source-of-income discrimination disproportionately harms racial minorities and other Fair Housing Act-protected groups).

In response to some owners declining to rent to voucher holders, some states have enacted laws barring discrimination based on the source of a prospective tenant’s income. ^[10] See Schwemm, above, app’x I at 650-53. In 2020, Maryland joined them by passing the HOME Act. See 2020 Md. Laws, Ch. 117. That Act amended § 20-705 of the State Government Article, which prohibits discriminatory practices in the sale or rental of a dwelling on several enumerated grounds, by adding “source of income” as an additional basis on which discrimination is prohibited. As amended, the provision now states in relevant part that, except as otherwise provided, a person may not:

(1) refuse to sell or rent after the making of a bona fide offer, refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, disability, marital status, familial status, sexual orientation, gender identity, national origin, source of income, or military status; [or] (2) discriminate against any person in the terms, conditions, or privileges of the sale or rental of a dwelling, or in the provision of services or facilities in connection with the sale or rental of a dwelling, because of race, color, religion, sex, disability, marital status, familial status, sexual orientation, gender identity, national origin, source of income, or military status; ...

State Gov’t § 20-705(1)-(2).

For purposes of this prohibition, “[s]ource of income” means “any lawful source of money paid directly or indirectly to or on behalf of a renter or buyer of housing[,]” including:

(i) a lawful profession, occupation, or job; (ii) any government or private assistance, grant, loan, or rental assistance program, including low-income housing assistance certificates and vouchers issued under the United States Housing Act of 1937; (iii) a gift, an inheritance, a pension, an annuity, alimony, child support, or any other consideration or benefit; or (iv) the sale or pledge of property or an interest in property. Id. § 20-701(j).

The Act specifies that the prohibition against source-of-income discrimination does not “prohibit a person from determining the ability of a potential buyer or renter to pay a purchase price or pay rent by verifying in a commercially reasonable and nondiscriminatory manner the source and amount of income or creditworthiness of the potential buyer or renter[.]” Id. § 20-704(d)(1).

The legislative history of the HOME Act makes plain that the Act was directed primarily to prevent discrimination against voucher holders. The sponsor of the legislation, then-Delegate (now-Comptroller) Brooke Lierman, identified the problem to which it was addressed, testifying that voucher holders “go from place to place to place, and people, landlords, will not accept them.” Hearing on H.B. 231 Before the Env’t & Transp. Comm., 441st Sess. Md. Gen. Assembly, at 1:29:03-18 (Feb. 4, 2020), https://tinyurl.com/bddc3vmb [https://perma.cc/VL5W-JFCV]. She noted that “if you are a voucher holder in a county in Maryland that does not protect against source-of-income discrimination,[11] your rate of being able to use that voucher . . . could be as low as 50%,” and she compared that to the “99%” acceptance of vouchers in counties that prohibit source-of-income discrimination. Id. at 1:29:25-52. The testimony of other witnesses also focused on the role of vouchers in housing selection. ^[12]

The Revised Fiscal and Policy Note associated with the HOME Act also confirms that it was targeted at discrimination against voucher holders. See Revised Fiscal & Policy Note, above at note 11, at 5-8. The Note includes an appendix containing background on other source-of-income discrimination laws, a general summary of the Housing Choice Voucher Program, and a summary of issues related to source-of-income discrimination in the context of vouchers. Id. With respect to the latter, the Note includes a discussion of the lack of progress made in the absence of such protections toward the goal of “allow[ing] [housing choice voucher] program recipients to choose where they live, in an effort to avoid duplicating the pockets of poverty that were created with public housing developments.” Id. at 7.

In sum, the addition of “source of income” to § 20-705 was intended primarily to preclude discrimination against persons using vouchers to obtain affordable housing.

C. DSB and Ms. Hare

Ms. Hare is a recipient of a housing choice voucher. She qualifies for the voucher on account of her disability and its impact on her ability to work and earn income. Her disability also makes her eligible for a greater subsidy than would otherwise be available as an accommodation. See Program Participant Reference Guide, above at note 2, at 37. Outside of her voucher, Ms. Hare’s sole monthly income consists of $841 in supplemental security income.

In February 2022, Ms. Hare applied to rent an apartment in a complex owned by DSB. The unit’s rental cost at the time was $1,590 per month. As part of the application process, DSB required most applicants to demonstrate income of “2.5 times the monthly market rent.” 13 For the unit selected by Ms. Hare, that policy required her to demonstrate monthly income of $3,975.

At first, apparently because the apartment’s monthly rent slightly exceeded the applicable payment standard, the Local Department asked DSB to reduce the rent to $1,572. After DSB declined, the Local Department responded that it had “approved an exception to the payment standard to move forward at the full rental rate of $1590.” 14 The Local Department then approved Ms. Hare for a voucher with a housing assistance payment (i.e., subsidy) of $1,464 and a total tenant payment of $126. The voucher would thus have covered approximately 92% of the total monthly rent.

After receiving that information, DSB had Ms. Hare submit information about her income to a third party that evaluated whether she met the minimum-income requirement. The third party combined Ms. Hare’s supplemental security income of $841 with the $1,464 voucher subsidy for which she was approved and determined that the total of $2,305 fell well short of the required $3,975. Accordingly, DSB rejected Ms. Hare’s application.

In June 2022, Ms. Hare filed a complaint with the Maryland Commission on Civil Rights. After the Commission found no probable cause to support her claim, Ms. Hare filed suit against DSB in the Circuit Court for Baltimore County. Ms. Hare alleged, among other things, that DSB’s policy violated the prohibition on source-of-income discrimination in § 20-705 of the State Government Article. ^[15]

Following discovery, DSB moved for summary judgment and argued that it rejected Ms. Hare because of her lack of sufficient income, not the source of that income. DSB’s motion addressed Ms. Hare’s discrimination claim using a disparate treatment framework. In response, Ms. Hare argued that DSB engaged in source-of-income discrimination, and that “the proper methodology that should have been used by DSB would have been to subtract the voucher amount from the rent” and then compare her non-voucher income to the portion of rent for which she was responsible ($126). Applying that methodology, Ms. Hare had monthly income of more than six times the rent for which she was responsible.

The circuit court granted DSB’s motion. The court determined that “[t]he Home Act’s plain meaning limits its application to the source, or origin, of income but in no way prohibits consideration of amount.” Because DSB “neutrally applied its income qualification criteria to” Ms. Hare, and rejected her application based on the amount, rather than source of her income, the court ruled that DSB was entitled to judgment as a matter of law.

Ms. Hare appealed. While that appeal was pending, Ms. Hare filed a bypass petition for a writ of certiorari. Although neither party had addressed disparate impact in their summary judgment filings before the circuit court, 16 in her petition, Ms. Hare couched her argument in terms that could be reasonably interpreted as asserting disparate impact, asking this Court to grant certiorari to address the following question:

Where a tenant’s rent is subsidized by a housing voucher, does a landlord’s imposition of an income requirement that ignores the share of the rent guaranteed by the voucher and has the effect of excluding voucher holders constitute source-of-income discrimination in violation of Md. Code Ann., State Gov’t § 20-705? DSB did not file an answer to the petition. We granted the petition to resolve the question presented by Ms. Hare. Hare v. David S. Brown Enters., Ltd., 489 Md. 243 (2024).

In her opening brief in this Court, Ms. Hare argued both disparate treatment and disparate impact discrimination theories of liability. In its brief, DSB responded on the merits to both theories, failing to argue preservation. It was not until oral argument that

In her complaint, although she did not use the phrase “disparate impact,” Ms. Hare 16 pled allegations that can reasonably be interpreted as invoking disparate impact as a basis for liability. In paragraph 48, she alleged that the minimum-income requirement “disproportionately impacts and discriminates against individuals who are disabled and have income made up of [housing choice vouchers] and [supplemental security income].” She made similar allegations in paragraphs 51 (alleging that DSB’s requirement “virtually eliminates the possibility for a [housing choice voucher] recipient to ever be able to rent at the apartments”), 52 (“Such a policy would have a discriminatory impact on individuals whose source of income is made up of [housing choice vouchers.]”), and 57 (“As the alleged policy, currently stated and enforced, would essentially preclude a[ housing choice voucher] recipient from being able to rent a dwelling at the . . . apartment complex.”).

DSB pointed out that Ms. Hare had not asserted a disparate impact discrimination theory of liability in her summary judgment filings before the circuit court. Even then, however, DSB acknowledged that it had not briefed preservation and was not raising a preservation issue. Any reliance on preservation has been waived. See Rosales v. State, 463 Md. 552, 569-70 (2019) (“[A] question not presented or argued in [a party’s] brief is waived or abandoned and is, therefore, not properly preserved for review.” (first alteration in original) (quoting Hobby v. State, 436 Md. 526, 542 (2014))).

DISCUSSION

Courts assess discrimination claims through two primary lenses: disparate treatment and disparate impact. Put simply, disparate treatment occurs when two similarly situated groups or individuals are treated differently based on belonging to a protected category or class. See, e.g., Pavan v. Smith, 582 U.S. 563, 566 (2017) (noting that laws that “exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples” is a form of disparate treatment (quoting Obergefell v. Hodges, 576 U.S. 644, 675-76 (2015))); Nordlinger v. Hahn, 505 U.S. ^[1], 30 (1992) (Stevens, J., dissenting) (writing that it is disparate treatment when “[t]wo families with equal needs and equal resources are treated differently solely because of their different heritage”); Kosereis v. Rhode Island, 331 F.3d 207, 214 (1st Cir. 2003) (“To successfully allege disparate treatment, a plaintiff must show ‘that others similarly situated to him in all relevant respects were treated differently by the employer.’” (quoting Conward v. Cambridge Sch. Comm., 171 F.3d 12, 20 (1st Cir. 1999))).

Disparate impact occurs when parties are facially treated the same, but the outcome is discriminatory, often because the two groups are differently situated in a meaningful way. See, e.g., Tex. Dep’t of Hous. & Community Affs. v. Inclusive Communities Project, Inc., 576 U.S. 519, 531 (2015) (describing disparate impact liability as proscribing “practices that are fair in form, but discriminatory in operation” (quoting Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971))); Raytheon Co. v. Hernandez, 540 U.S. 44, 52 (2003) (stating that disparate impact claims “involve . . . practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another” (quoting Int’l Brotherhood of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977))); Smith v. City of Jackson, 544 U.S. 228, 239 (2005) (applying disparate impact analysis to claims under the Age Discrimination in Employment Act). That is, if you assign a test of flight to a bird and a fish, you will have treated them the same, but the impact of the facially equal treatment discriminates against the fish.

Ms. Hare makes both claims. She argues that the minimum-income requirement results in disparate treatment because non-voucher holders are required to demonstrate income of just 2.5 times what they are obligated to pay in rent, while she is required to demonstrate income of $3,975, which is more than 31 times the $126 she is obligated to pay in rent. She also argues that even if the minimum-income requirement does not constitute disparate treatment, it results in a disparate impact because it precludes a large percentage of voucher holders from qualifying to rent from DSB―including the more than 75% of voucher holders designated as extremely low income―while excluding a far lower percentage of non-voucher holders.

DSB responds that it was entitled to judgment as a matter of law on both theories. It argues that it does not engage in disparate treatment because it treats all sources of income identically, as the circuit court found. And it suggests that Ms. Hare cannot demonstrate a disparate impact both because eight voucher holders live in the relevant apartment complex, showing that its policy does not exclude all voucher holders, and because Ms. Hare cannot show any disparate impact as between herself and non-voucher holders who are similarly unable to meet its minimum-income requirement. ^[17]

I. STANDARD OF REVIEW

At issue is the circuit court’s ruling on DSB’s motion for summary judgment. This Court “reviews a circuit court’s grant of summary judgment without deference.” Westminster Mgmt., LLC v. Smith, 486 Md. 616, 637 (2024). In doing so, we take “an independent review of the record to determine whether a genuine dispute of material fact exists and whether the moving party is entitled to judgment as a matter of law.” Id. (quoting Md. Cas. Co. v. Blackstone Int’l Ltd., 442 Md. 685, 694 (2015)); see also Md. Rule 2-501(a).

II. DISPARATE TREATMENT

Disparate treatment claims arise when a party has purposely “‘treated [a] particular person less favorably than others because of’ a protected trait.” See Ricci v. DeStefano, 557 U.S. 557, 577 (2009) (quoting Watson v. Fort Worth Bank & Tr., 487 U.S. 977, 985-86 (1988)); see also Kosereis, 331 F.3d at 214 (“To successfully allege disparate treatment, a plaintiff must show ‘that others similarly situated to him in all relevant respects were treated differently by the employer.’” (quoting Conward, 171 F.3d at 20)). When there is an appropriate federal analog, as is the case here, we assess disparate treatment claims involving circumstantial evidence of a discriminatory motive under the three-step framework adopted by the United States Supreme Court in McDonnell Douglas Corporation v. Green, 411 U.S. 792 (1973). See, e.g., Town of Riverdale Park v. Ashkar, 474 Md. 581, 615-16 (2021); Belfiore v. Merchant Link, LLC, 236 Md. App. 32, 45 (2018).

In the first step, the plaintiff must make out a prima facie case of discrimination, Molesworth v. Brandon, 341 Md. 621, 638 (1996), by showing (1) membership in a protected class, (2) different treatment than other prospective tenants because of membership in that class, and (3) evidence to support an inference of discriminatory motive, see Ames v. Ohio Dep’t of Youth Servs., 145 S. Ct. 1540, 1545 (2025); Young v. United Parcel Serv., Inc., 575 U.S. 206, 229-30 (2015). The “burden of production for a prima facie case of discrimination is minimal,” Ashkar, 474 Md. at 616 (italics omitted), and the “elements of the prima facie case depend upon the facts of the case,” Molesworth, 341 Md. at 638.

If the plaintiff clears that bar, in the second step, the burden shifts to the defendant to show a legitimate nondiscriminatory reason for its policy or actions. Id. If such a reason is given, in the third step, the burden shifts back to the plaintiff to show that the reason is pretextual. Id. at 638-39.

We agree with the circuit court that DSB was entitled to summary judgment as a matter of law on Ms. Hare’s disparate treatment theory of liability. Ms. Hare argues that she is similarly situated to non-voucher holders, but that she is treated differently by being made to demonstrate income at a level that is far higher than 2.5 times her portion of rent. But that argument depends on redefining the measuring sticks applied by DSB: (1) from the total market rent for the unit to just the particular tenant’s portion; and (2) from total income from all sources to income remaining after applying the voucher. ^[18] But DSB’s measuring sticks are facially neutral, and the disparate treatment framework does not allow us to redefine them to match Ms. Hare’s theory. Viewed under the lens of discriminatory treatment, we agree with the circuit court that the claim fails. Ms. Hare, like all other applicants, was required to demonstrate income of 2.5 times the total rent due for the unit she sought to lease, with all sources of income aggregated in the same way for purposes of that calculation. The problem, as we will turn to next, is that voucher income is different in meaningful ways from other types of income, and treating it identically may result in disparate impact discrimination against voucher holders.

III. DISPARATE IMPACT

The United States Supreme Court first analyzed disparate impact in Griggs v. Duke Power Co., 401 U.S. 424 (1971). A decade ago, in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015), the Court expressly recognized that the disparate impact theory of liability is applicable to anti-discrimination provisions in the federal analog to Maryland’s State Gov’t § 20-705. Disparate impact discrimination pertains to “practices that are fair in form[] but discriminatory in operation.” Griggs, 401 U.S. at 431. The disparate impact theory of liability recognizes that at times, treating things that are different in meaningful ways as though they are the same can perpetuate discrimination. See Justin D. Cummins, Refashioning the Disparate Treatment and Disparate Impact Doctrines in Theory and in Practice, 41 Howard L.J. 455, 461 n.32 (1998).

In Griggs, the United States Supreme Court found that certain job qualifications imposed by an employer were discriminatory in impact, although applied in a facially neutral way, because they disqualified Black applicants at a “substantially higher rate than white applicants,” and had no identifiable relationship to the jobs for which they were imposed. Griggs, 401 U.S. at 426, 432, 436. See generally David J. Garrow, Toward a Definitive History of Griggs v. Duke Power Co., 67 Vand. L. Rev. 197, 200-07 (2014) (providing additional context to Griggs). In adopting the disparate impact theory, the Court observed that the objective of Title VII of the Civil Rights Act of 1964 was “to achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees.” Griggs, 401 U.S. at 429-30. Thus, “practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices.” Id. at 430. The Court also rejected the employer’s contention that its aptitude tests were expressly approved by Title VII, which authorized “‘any professionally developed ability test’ that is not ‘designed, intended or used to discriminate because of race.’” Id. at 433 (emphasis in Griggs) (quoting § 703(h) of the Civil Rights Act of 1964). In doing so, the Court agreed with the Equal Employment Opportunity Commission that the exception was intended to apply only to job-related tests. Id. at 433-34, 436 (“What Congress has commanded is that any tests used must measure the person for the job and not the person in the abstract.”).

In Inclusive Communities, the Supreme Court recognized, as most intermediate federal appellate courts already had, that the disparate impact theory applies to discrimination claims under the federal Fair Housing Act (“FHA”), 42 U.S.C. § 3604. Inclusive Communities, 576 U.S. at 543. The Court described the disparate impact theory of liability as a challenge to practices “that have a ‘disproportionately adverse effect on minorities’ and are otherwise unjustified by a legitimate rationale.” Id. at 524-25 (quoting Ricci, 557 U.S. at 577). In determining whether that theory applies to FHA claims, the Court looked to the language of two provisions of that statute that prohibit discrimination in housing. The first, employing language identical in all relevant operational respects to § 20-705(1), made it unlawful to, among other things, “otherwise make unavailable or deny[] a dwelling to any person because of race[.]” Id. at 533. The Court found that the phrase “otherwise make unavailable or deny” “refers to the consequences of an action rather than the actor’s intent,” and that such “results-oriented language counsels in favor of recognizing disparate-impact liability.” Id. at 534. The second provision, employing language identical in all relevant operational respects to § 20-705(2), broadly prohibits “discrimination,” which is similar to language the Court had previously interpreted “to include disparate-impact liability.” Id. (citing Board of Education of City School District of New York v. Harris, 444 U.S. 130, 140-41 (1979), as having held that the term “‘discriminat[e]’ encompassed disparate-impact liability in the context of a statute’s text, history, purpose, and structure”).

Turning from the statutory language, the Court found it significant that Congress had amended the FHA after nine federal appellate circuits had unanimously held that the FHA supports disparate impact claims, suggesting that Congress approved of that interpretation. Inclusive Communities, 576 U.S. at 535-36. And, significantly, the Court found “[r]ecognition of disparate-impact claims is consistent with the FHA’s central purpose,” which, “like Title VII and the [Age Discrimination in Employment Act, is] to eradicate discriminatory practices within a sector of our Nation’s economy.” Id. at 539. The Court stressed, however, that disparate impact analysis is subject to several limitations, including that it precludes only “artificial, arbitrary, and unnecessary barriers,” id. at 540 (quoting Griggs, 401 U.S. at 431), not policies that are “necessary to achieve a valid interest,” even if they result in a disparate impact on a protected group, id. at 540-41. The Act, the Court held, aims to ensure that legitimate “priorities can be achieved without arbitrarily creating discriminatory effects or perpetuating segregation.” Id. at 540. Thus, it is critical that disparate impact analysis be applied in such a way as to give defendants the opportunity “to state and explain the valid interest served by their policies.” Id. at 541.

The Court proceeded to follow a three-part framework the Department of Housing and Urban Development had applied, and which the Court seemed to implicitly adopt, at least in its broad contours, for disparate impact claims. The first step of the framework requires the plaintiff to identify a robust causal connection between the challenged policy and the disparate impact on the protected class. See id. at 541. Indeed, a “plaintiff who fails to allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection cannot make out a prima facie case of disparate impact.” Id. at 543. If the plaintiff identifies such a causal connection, the burden shifts to the defendant to show that there is a “valid interest served by their policies.” See id. at 541. And if the defendant carries that burden, the plaintiff must then show that the defendant’s valid interest “could be served by another practice that has a less discriminatory effect.” See id. at 527 (quoting

24 C.F.R. § 100.500(c)(3)); see also Reyes v. Waples Mobile Home Park L.P., 903 F.3d 415, 424 (4th Cir. 2018).

Following Griggs, numerous federal courts have found discrimination in cases where two meaningfully different groups are treated the same, thus producing a disparate impact. See, e.g., Dothard v. Rawlinson, 433 U.S. 321, 331-32, 336 (1977) (recognizing that height and weight requirements for prison guards produced a disparate impact on the basis of sex but ultimately finding that the discrimination was a bona fide occupational qualification); Easterling v. Connecticut, 783 F. Supp. 2d 323, 335-36, 344 (D. Conn. 2011) (holding that a 1.5 mile run requirement for prison guards has a disparate impact on women and finding no legitimate interest served by the requirement); Greenspan v. Auto. Club of Mich., 495 F. Supp. 1021, 1034-35 (E.D. Mich. 1980) (“Testimony established that one of the job requirements for assistant branch manager . . . was prior experience in claims, which, until recently, had been a predominantly male field. As a result, no women were eligible for the assistant manager’s position because of their historic inability to obtain the requisite claims background.”). Courts have also applied disparate impact analysis to claims of discrimination based on disability; 19 status as a religious, linguistic, or ethnic minority; 20 and naturalized citizenship status, 21 among others.

We find the Supreme Court’s analysis concerning the application of the disparate impact theory of liability to the FHA applicable to § 20-705. Of course, the FHA does not include source of income as a prohibited factor. But whether the disparate impact theory applies depends on whether the operative language of the statute reaches the effect of conduct, not on the list of prohibited factors. See Inclusive Communities, 576 U.S. at 534-36. Here, § 20-705(1), like the analogous provision of the FHA, forbids a person to “otherwise make unavailable or deny” housing on the protected bases. As the Supreme Court found in Inclusive Communities, that is “results-oriented language” supporting disparate impact analysis. 576 U.S. at 534. And § 20-750(2) makes it unlawful to “discriminate” on protected bases, using language equally as broad as that in the analogous provision of the FHA.

And just as the Supreme Court noted the significance of Congress staying silent in the face of many courts’ interpretations of that language to authorize disparate impact claims, 576 U.S. at 536, the Maryland General Assembly has not altered the analogous language of § 20-705 in the face of those same rulings or the decision in Inclusive Communities applying disparate impact analysis to identical provisions in the FHA. Indeed, the General Assembly added “source of income” to § 20-705, without any change to the operative language, just five years after the Supreme Court decided Inclusive Communities. And, like the anti-discrimination provisions in the FHA, § 20-705 was enacted “to eradicate discriminatory practices within a sector of [the] economy.” Cf. Inclusive Communities, 576 U.S. at 539. Indeed, emphasizing that the statutes are intended to work in tandem, when the General Assembly originally enacted § 20-705, it identified its general purpose as “prohibiting discriminatory housing practices in a manner substantially equivalent or similar to the” FHA. 1991 Md. Laws, Ch. 571. Recognizing disparate impact liability is consistent with that purpose. However, in applying that framework, we also recognize the importance of the limitations on disparate impact analysis discussed in Inclusive Communities, including that it is intended to preclude only “artificial, arbitrary, and unnecessary barriers,” not policies that are “necessary to achieve a valid interest[.]” 22 Inclusive Communities, 576 U.S. at 540-41.

As we have observed, Ms. Hare’s operative complaint includes the language of a disparate impact claim. She argues that DSB’s minimum-income requirement “disproportionately impacts and discriminates against individuals who . . . have income made up of [housing choice vouchers] and [supplemental security income]”; that it “would have a discriminatory impact on individuals whose source of income is made up of [housing choice vouchers]”; and that the requirement “virtually eliminates the possibility for a [housing choice voucher] recipient to ever be able to rent” apartments in the complex at issue. And although she failed to press the disparate impact theory in summary judgment briefing, she has done so on appeal, and DSB has waived any objection on preservation grounds. ^[23] We hold that disparate impact is an appropriate framework to apply to Ms. Hare’s claim. Applying that framework, the relevant question is not whether Ms. Hare was treated the same as others with different sources of income, but whether the application of the minimum-income requirement, even though facially neutral, results in a discriminatory impact against holders of housing choice vouchers. With the disparate impact theory of liability in the case, DSB was thus not entitled to summary judgment solely on the ground that it treated all sources of income identically.

DSB also contends that the circuit court properly awarded it summary judgment based on State Government § 20-704(d), which, in relevant part, clarifies that the prohibition against source-of-income discrimination does not “prohibit a person from determining the ability of a potential buyer or renter to pay a purchase price or pay rent by verifying in a commercially reasonable and nondiscriminatory manner the source and amount of income or creditworthiness of the potential buyer or renter[.]” State Gov’t § 20-704(d)(1). DSB argues that this provision authorizes it and other landlords to impose minimum-income requirements. Perhaps so, depending on the requirement and how it is applied. But the first touchstone for application of this provision is whether the practice at issue truly “determin[es] the ability of a potential buyer or renter to pay a purchase price or pay rent[.]” State Gov’t § 20-704(d)(1). When a voucher subsidy leaves a tenant obligated to pay only a portion of total rent, there is reason to doubt whether a minimum- income requirement applied to the full rent obligation bears any relationship to ability to pay. Cf. Griggs, 401 U.S. at 432 (holding that a provision in Title VII permitting the use of assessments in hiring applied only to assessments that were relevant to the jobs at issue, and so did not support the use of an assessment in that case). On this record, § 20-704(d)(1) does not support an award of summary judgment in favor of DSB as a matter of law.

For those reasons, we will vacate the judgment of the circuit court and remand for further proceedings consistent with this opinion. It will be appropriate for the circuit court to address on remand the application of disparate impact analysis to Ms. Hare’s claim in the first instance. ^[24]

CONCLUSION

Ms. Hare has made a disparate impact claim. Whether DSB counted her voucher income in the same way it counts other sources of income is thus not dispositive of whether DSB is entitled to judgment as a matter of law. Accordingly, we will vacate the judgment of the circuit court and remand for proceedings consistent with this opinion.

Circuit Court for Baltimore County Case No. C-03-CV-22-004201 Argued: May 5, 2025 IN THE SUPREME COURT

OF MARYLAND No. 32

September Term, 2024 ______________________________________

KATRINA HARE v. DAVID S. BROWN ENTERPRISES, LTD. ______________________________________

Fader, C.J. Watts Booth Biran Gould Eaves Killough

JJ. ______________________________________

Concurring Opinion by Watts, J. ______________________________________

Filed: July 28, 2025

Respectfully, I concur. I agree with the Majority’s holding that Katrina Hare, Appellant, has made a disparate impact discrimination claim. As such, I join Part III of the majority opinion, titled “Disparate Impact,” and the conclusion section of the opinion, vacating the judgment of the circuit court and remanding the case for proceedings consistent with the majority opinion. See Maj. Slip Op. at 20-30. Applying the different burden-shifting frameworks that apply to disparate treatment and disparate impact discrimination claims in the housing discrimination context, however, I would hold that Ms. Hare may proceed under both theories, as she has demonstrated that David S. Brown Enterprises, Ltd.’s (“DSB”), Appellee’s, income verification policy both disparately treats and impacts voucher holders in a discriminatory manner, contrary to the plain language and purpose of the Housing Opportunities Made Equal Act (the “HOME Act”).

In 2020, the Maryland General Assembly passed the HOME Act, which expanded the State’s housing policy to prohibit discrimination based on an individual’s source of income. See 2020 Md. Laws, Ch. 117. The relevant statute now provides that a landlord may not refuse to rent, refuse to negotiate for the rental of, or otherwise make unavailable or deny a dwelling to any person because of their source of income, among other protected classes. See Md. Code Ann., State Gov’t (“SG”) § 20-705(1). One source of income a landlord may not discriminate against a renter for using is a Housing Choice Voucher (“HCV”), a voucher issued by state public housing agencies under a federally backed program that is designed to assist low-income renters in qualifying for housing and affording their monthly rent. See 42 U.S.C. § 14379f. Under the HOME Act, a landlord must determine the ability of an applicant to pay rent “by verifying in a commercially reasonable and nondiscriminatory manner the source and amount of income or creditworthiness of the potential” renter. SG § 20-704(d)(1).

Ms. Hare applied to rent an apartment from DSB. Ms. Hare’s application was denied on the basis that she did not meet DSB’s requirement that an applicant demonstrate monthly income totaling 2.5 times the monthly rent of the unit. Ms. Hare is a voucher holder. She receives $841 per month in supplemental security income (“SSI”), and she received a voucher that would cover $1,464 of the anticipated $1,590 rent each month; this is the monthly cost of the unit Ms. Hare applied to rent from DSB. After use of the voucher, Ms. Hare would have been required to pay only $126 in rent herself. Under DSB’s policy, Ms. Hare demonstrated that her monthly income totaled $2,305 ($841 + $1,464). The required income threshold under DSB’s policy mandated that Ms. Hare demonstrate income totaling $3,975 ($1,590 x 2.5). In the Circuit Court for Baltimore County, Ms. Hare brought discrimination claims against DSB, alleging disability discrimination and source of income discrimination under the HOME Act.

DSB moved for summary judgement, which the circuit court granted. The circuit court concluded that Ms. Hare’s denial was entirely related to ineligibility due to her financial means, and unrelated to her disability or source of income. The circuit court reasoned that DSB had not discriminated against Ms. Hare, but that she was properly denied under DSB’s policy that considered her income from the HCV. The circuit court found that the HOME Act prohibits discrimination only on the basis of income source, not income calculation methodology, and therefore DSB’s methodology in calculating Ms. Hare’s income was not discriminatory. Ms. Hare appealed.

After filing a notice of appeal, Ms. Hare filed a bypass petition of certiorari to this Court, which we granted. Before this Court, Ms. Hare contends, under discrimination theories of disparate treatment and disparate impact, that DSB’s policy requiring applicants to demonstrate monthly income totaling 2.5 times the monthly rental cost of a unit, rather than monthly income totaling 2.5 times the applicant’s share of the rent, is source of income discrimination under the HOME Act. DSB responds, however, that Ms. Hare has not been subjected to disparate treatment because the HOME Act does not require landlords to use a certain methodology for determining an applicant’s ability to afford the monthly rental price of a unit. DSB also contends that Ms. Hare is not disparately impacted by its policy, as any person with Ms. Hare’s income would be deemed financially unqualified for the rental unit.

I would hold that Ms. Hare has demonstrated a prima facie case of source of income discrimination under both disparate treatment and disparate impact theories of discrimination as a voucher holder under DSB’s policy and that DSB is unable to demonstrate a legitimate, nondiscriminatory reason for the denial of her application or that the challenged policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest. I would reverse the circuit court’s grant of summary judgment to DSB and remand the case to the circuit court for further proceedings, i.e., trial.

Factual Background and Procedural History

On February 5, 2022, Ms. Hare applied to rent an apartment in the St. Charles at Olde Court Apartments (“St. Charles”), owned by DSB. At that time, Ms. Hare lived in a two-story home that required her to go up and down stairs to enter and leave her home and to perform other daily activities. Ms. Hare is disabled due to severe osteoarthritis, which makes, among other daily activities, climbing stairs extremely difficult. Ms. Hare applied for a main level unit at the St. Charles, seeking to alleviate the issues with the stairs in her then-current home. The market rent for the St. Charles unit that Ms. Hare applied for was $1,590 per month.

Ms. Hare qualified for and received an HCV through the HCV Program of the Baltimore County Office of Housing, a federally backed voucher program. ^[1] In Ms. Hare’s application, she listed her monthly income as $841, reflecting the SSI she received each month. On February 10, 2022, Ms. Hare’s application to rent a unit from DSB was conditionally approved, and she was informed of the outcome by letter. The letter also stated, however, that the application was not fully approved due to insufficient income and Ms. Hare was required to meet additional financial requirements as a condition of the approval.

According to Ms. Hare, on February 10, 2022, DSB learned that the source of her income would come, in part, from an HCV. The same day, Ms. Hare learned that her application had been cancelled online. Ms. Hare asserts that when she inquired as to the

1 Federal law provides for low-income housing assistance. See 42 U.S.C. § 1437f. The Secretary of the Department of Housing and Urban Development (“HUD”) is authorized to enter into contracts with state public housing agencies to make “assistance payments” to landlords. 42 U.S.C. § 1437f(b)(1). 42 U.S.C. § 1437f(o) establishes the voucher program and the requirements of the program. Essentially, the program provides a voucher to a family or individual who earns an income under a specified limit, which will cover rent exceeding, typically, 30 percent of the voucher holder’s monthly adjusted income. See § 1437f(o)(2). In other words, if all qualifications are met, a voucher holder pays 30 percent of their monthly adjusted income in rent, and the voucher pays the landlord the remaining amount.

status of her application, a DSB property manager informed her that her application had been cancelled because she did not provide her a copy of her license or proof of income. Ms. Hare informed the property manager that both a copy of her license and proof of income had been submitted via email, which the property manager then located. Ms. Hare’s application was reinstated.

Ms. Hare alleged that thereafter DSB failed to take action on her application, resulting in it being automatically cancelled and her voucher expiring. Ms. Hare secured an extension on her voucher and DSB reinstated her application again, but DSB failed to complete paperwork required by the Baltimore County Department of Housing and Community Development (“DHCD”). Ms. Hare elevated the issue to the property manager and assistant manager, at which point DSB did submit the paperwork, but the application was cancelled for a third time when the rent was said to be higher than the DHCD payment standard. ^[2] Ms. Hare secured an increased payment standard percentage and on April 13, 2022, DSB was informed by DHCD that the payment from the voucher, in addition to Ms. Hare’s portion, would cover the entire rent amount. On the same day, Ms. Hare’s application was reinstated and DSB scheduled an inspection with DHCD. Subsequently, a DHCD employee emailed DSB, indicating that Ms. Hare’s housing voucher would cover $1,464 per month and Ms. Hare would be responsible for paying the remaining $126 per

2 Under 42 U.S.C. § 1437f(o)(1)(A), a payment standard is used to determine the monthly assistance that may be paid to a voucher holder. By law, a payment standard may not exceed 110 percent, nor be less than 90 percent, of the fair market rental for the same size of dwelling unit in the same market area. 42 U.S.C. § 1437f(o)(1)(B). However, as a reasonable accommodation for a person with a disability, the payment standard may be increased to not more than 120 percent of the fair market rent. 42 U.S.C. § 1437f(o)(1)(D).

month.

On April 14, 2022, Ms. Hare received a phone call from a DSB leasing agent, informing her that her application was being denied. The call was transferred to the St. Charles property manager, who explained that the denial was based on the DSB policy that required a renter’s income to be at least 2.5 times the rent amount. The property manager at St. Charles stated that in order for Ms. Hare to qualify to rent the unit, she would have needed to show income of $3,975, which is 2.5 times the monthly rent of $1,590 per month. Even considering the $1,464 from the HCV, combined with Ms. Hare’s $841 from SSI, Ms. Hare’s total income was $2,305, which did not meet the 2.5 times the rent requirement.

DSB’s policy allows an applicant to meet its 2.5 times income criteria by combining income from different sources. The policy lists acceptable forms of income including: certain tax return documents, paystubs, court ordered child support or alimony forms, SSI benefits, unemployment, pensions, or vouchers. Unlike with voucher holders, however, the policy allows for full-time students to qualify without meeting the 2.5 times the rent income requirement by using either a guarantor or “an I-20 Form or other official government documentation indicating that, through some form of financial aid, the applicant’s living expenses will be provided.”

Ms. Hare brought suit against DSB on October 17, 2022, in the Circuit Court for Baltimore County, alleging disability discrimination and source of income discrimination under the Maryland HOME Act. On January 4, 2024, DSB filed a motion for summary judgment, which the circuit court granted on April 17, 2024. In granting the motion, the circuit court found that Ms. Hare’s denial was entirely related to her financial means, unrelated to her disability, and thus, she was not discriminated against based on her disability. The circuit court also found that Ms. Hare had not been discriminated against for her use of the HCV, as DSB had accepted Ms. Hare’s HCV as income and calculated her ability to meet their income qualification requirements with the amount from the HCV included.

The circuit court looked to other states’ statutory prohibitions on source of income discrimination. In Washington, California, and Virginia, statutes and regulations proscribe an income methodology for assessing a renter’s income against a landlord’s income criteria. The circuit court stated that in Washington, for example, income from a rent voucher must be subtracted from the total monthly rent prior to calculating whether the income criteria has been met. The circuit court concluded that the HOME Act, on the other hand, only prohibits discrimination on the basis of income source, not income methodology, as it does not contain similar statutory or regulatory provisions as those in Washington, California, or Virginia.

Ms. Hare appealed to the Appellate Court of Maryland on May 10, 2024.

On August 27, 2024, Ms. Hare filed a bypass petition for a writ of certiorari, raising the following issue:

Where a tenant’s rent is subsidized by a housing voucher, does a landlord’s imposition of an income requirement that ignores the share of rent guaranteed by the voucher and has the effect of excluding voucher holders constitute source-of-income discrimination in violation of Md. Code Ann., State Government § 20-705? On November 22, 2024, we granted the petition. See Hare v. David S. Brown Enter., Ltd., 489 Md. 243, 327 A.3d 110 (2024).

Standard of Review

This Court reviews a circuit court’s grant of summary judgment without deference. See Lithko Cont., LLC v. XL Ins. America, Inc., 487 Md. 385, 400, 318 A.3d 1221, 1229 (2024) (citing Bd. of Cnty. Comm’rs of St. Mary’s Cnty. v. Aiken, 483 Md. 590, 616, 296 A.3d 933, 948 (2023)). “In doing so, we come to an independent determination of whether, reviewing the record in the light most favorable to the nonmoving party and construing all reasonable inferences against the moving party, a genuine dispute of material fact exists and whether the moving party is entitled to judgment as a matter of law.” Id. at 400, 318 A.3d at 1229.

The Maryland HOME Act

“It is the policy of the State to provide for fair housing throughout the State to all, regardless of race, color, religion, sex, familial status, national origin, marital status, sexual orientation, gender identity, disability, source of income, or military status[.]” SG § 20- 702(a)(1). It is also the policy of the State “to prohibit discriminatory practices with respect to residential housing by any person, in order to protect and ensure the peace, health, safety, prosperity, and general welfare of all.” SG § 20-702(a)(2).

SG § 20-705(1) provides that a person may not

refuse to sell or rent after the making of a bona fide offer, refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, disability, marital status, familial status, sexual orientation, gender identity, national origin, source of income, or military status[.]

Source of income is defined as “any lawful source of money paid directly or indirectly to or on behalf of a renter or buyer of housing.” SG § 20-701(j)(1). Source of income includes income from:

(i) a lawful profession, occupation, or job;

(ii) any government or private assistance, grant, loan, or rental assistance program, including low-income housing assistance certificates and vouchers issued under the United States Housing Act of 1937;

(iii) a gift, an inheritance, a pension, an annuity, alimony, child support, or any other consideration or benefit; or (iv) the sale or pledge of property or an interest in property. SG § 20-701(j)(2).

The prohibition against discrimination based on an individual’s income source does not prohibit a person from determining the ability of a potential renter to pay rent “by verifying in a commercially reasonable and nondiscriminatory manner the source and amount of income or creditworthiness of the potential” renter. SG § 20-704(d)(1).

Housing Discrimination

Housing discrimination claims usually fall under two theories: disparate treatment, in which a plaintiff alleges intentional discrimination, or disparate impact, in which a plaintiff alleges that the defendant’s facially neutral practice disparately impacts a protected class. See Mt. Holly Gardens Citizens in Action, Inc. v. Twp. of Mt. Holly, 658 F.3d 375, 381 (3d Cir. 2011).

Though this Court has not addressed either theory in the housing income discrimination context, we have discussed both in cases involving employment discrimination and discriminatory juror strikes. See Edmonds v. State, 372 Md. 314, 330, 812 A.2d 1034, 1043 (2002); Molesworth v. Brandon, 341 Md. 621, 638, 672 A.2d 608, 616-17 (1996). In the equal employment context, we have sanctioned consulting federal precedent in the absence of our own jurisprudence on the issue. See Taylor v. Giant of Md., LLC, 423 Md. 628, 653, 33 A.3d 445, 460 (2011). Given that we have not addressed an income discrimination issue under the HOME Act, the question becomes what test is applicable. Reviewing federal precedent reveals that disparate impact and disparate treatment (intentional discrimination claims) are cognizable in the housing discrimination context and that separate tests apply.

Disparate Treatment

To state a claim for disparate treatment, a plaintiff must allege receiving different treatment than a similarly situated individual or group on the basis of their membership in a protected class. See Moody v. Related Cos., L.P., 620 F.Supp.3d 51, 55 (S.D.N.Y 2022) (discussing claims under the federal Fair Housing Act). “[A]t the summary judgment stage, the plaintiff must produce direct or circumstantial evidence demonstrating that a discriminatory reason more likely than not motivated the defendant and the defendant’s actions adversely affected the plaintiff in some way.” Sw. Fair Hous. Council, Inc. v. Maricopa Domestic Water Improvement Dist., 17 F.4th 950, 972 (9th Cir. 2021) (cleaned up). “A plaintiff may establish [] discrimination through direct evidence or circumstantial evidence.” Town of Riverdale Park v. Ashkar, 474 Md. 581, 615, 255 A.3d 140, 160 (2021) (citations omitted). Circumstantial evidence, especially in discrimination cases, “is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.” Desert Palace, Inc. v. Costa, 539 U.S. 90, 100 (2003) (cleaned up). The “ultimate question” is whether the plaintiff was the “victim of intentional discrimination.”

- 10 - Merritt v. Old Dominion Freight Line, Inc., 601 F.3d 289, 295 (4th Cir. 2010) (cleaned up). “Proof of discriminatory motive is crucial to a disparate treatment claim.” Gamble v. City of Escondido, 104 F.3d 300, 305 (9th Cir. 1997) (cleaned up).

When an individual “seeks to prove discrimination without the benefit of direct evidence, the [plaintiff] must first make out a prima facie case of discrimination.” Molesworth, 341 Md. at 638, 672 A.2d at 617 (citing McDonnell Douglas v. Green, 411 U.S. 792, 802 (1973)). “The elements of the prima facie case depend upon the facts of the case.” Id. at 638, 672 A.2d at 617 (citation omitted). The burden of production is minimal. See Ashkar, 474 Md. at 616, 255 A.3d at 160. The United States Court of Appeals for the Second Circuit has stated that, “[t]o make out a prima facie discriminatory housing refusal case, a plaintiff must show that [the plaintiff] is a member of a statutorily protected class who applied for and was qualified to rent or purchase housing and was rejected although the housing remained available.” Soules v. U.S. Dep’t of Hous. & Urb. Dev., 967 F.2d 817, 822 (2d Cir. 1992) (citation omitted).

If the plaintiff succeeds in proving the prima facie case, “[t]he burden then shifts to the [defendant] to articulate some legitimate, nondiscriminatory reason for the [plaintiff]’s rejection.” Molesworth, 341 Md. at 638, 672 A.2d at 617 (cleaned up). “Finally, ‘the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination.’” Id. at 638-39, 672 A.2d at 617 (quoting Texas Dep’t of Cmty. Affs. v. Burdine, 450 U.S. 248, 253 (1981)). This burden-shifting framework was originally announced by the Supreme Court of the United States in McDonnell Douglas.

- 11 -

In McDonnell Douglass, 411 U.S. at 800, 802, the Supreme Court held, in a private, non-class action complaint under Title VII alleging racial employment discrimination, that the complainant has the burden of establishing a prima facie case, which can be satisfied by showing that (i) the complainant belongs to a racial minority; (ii) the complainant applied and was qualified for a job the employer was trying to fill; (iii) though qualified, the complainant was rejected; and (iv) thereafter, the employer continued to seek applicants with the complainant’s qualifications. Recently, in Ames v. Ohio Dep’t of Youth Servs., 605 U.S. ___, ___, 145 S. Ct. 1540, 1545 (2025), the Supreme Court explained:

In McDonnell Douglas, this Court laid out a three-step burden-shifting framework for evaluating claims arising under that provision. 411 U. S. at 802-804, 93 S. Ct. 1817. The McDonnell Douglas framework aims to “bring the litigants and the court expeditiously and fairly to th[e] ultimate question” in a disparate-treatment case— namely, whether “the defendant intentionally discriminated against the plaintiff.” Burdine, 450 U. S. at 253, 101 S. Ct. 1089. At the first step of the familiar three-step inquiry, the plaintiff bears the “initial burden” of “establishing a prima facie case” by producing enough evidence to support an inference of discriminatory motive. McDonnell Douglas, 411 U. S. at 802, 9 S. Ct. 1817. If the plaintiff clears that hurdle, the burden then “shift[s] to the employer to articulate some legitimate, nondiscriminatory reason for the employee’s rejection.” Ibid. Finally, if the employer articulates such a justification, the plaintiff must then have a “fair opportunity” to show that the stated justification “was in fact pretext” for discrimination. Id., at 804, 93 S. Ct. 1817. A plaintiff “may succeed [under the McDonnell Douglas framework] either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer’s proffered explanation is unworthy of credence.” Burdine, 450 U. S. at 256, 101 S. Ct. 1089. For most plaintiffs, the first step of the McDonnell Douglas framework—the prima facie burden—is “not onerous.” Burdine, 450 U. S. at 253, 101 S. Ct. 1089. A plaintiff may satisfy it simply by presenting evidence “that she applied for an available position for which she was qualified, but was rejected under circumstances which give rise to an inference of unlawful discrimination.” Ibid.