Heidi Cooper v. Eagle Point ICG, LLC, et al

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
HEIDI COOPER, on behalf of herself and
all others similarly situated,
Appellant,
v.
EAGLE POINTE ICG, LLC, a
Washington limited liability company, and
SECURITY PROPERTIES
RESIDENTIAL, LLC, a Washington
corporation,
Respondents.
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No. 39596-1-III
UNPUBLISHED OPINION
STAAB, J. — Security Properties Residential, LLC, owns Eagle Pointe Apartments,
which rents solely to low-income tenants under two low income rental assistance
programs. Under the first program, Security Properties rents to tenants who qualify for
the Housing Choice “Voucher Program,” also called “Section 8” housing. These tenants
receive a voucher to subsidize a portion of their rent. Security Properties also rents to
tenants under the Low-Income Housing “Tax Credit Program,” a program authorized by
“Section 42” of the Internal Revenue Code of 1986. This program provides an income
tax credit to the owners of real property who rent residential units to qualified tenants at a
FILED
SEPTEMBER 17, 2024
In the Office of the Clerk of Court
WA State Court of Appeals, Division III

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reduced rental rate. It is undisputed that Eagle Pointe charges different rental rates to
tenants through the two programs.
Heidi Cooper is a tenant at Eagle Pointe who receives rental assistance through the
Voucher Program. When she discovered that Security Properties charges different rental
rates to tenants in the Tax Credit Program, she sued claiming source of income
discrimination in violation of the Residential Landlord Tenant Act (RLTA), RCW
59.18.255. As a putative class action representative, she sought statutory damages and
attorney fees. The trial court dismissed her claims on summary judgment and Ms.
Cooper appeals.
Under different circumstances, evidence that tenants in the Voucher Program are
charged a different rate of rent than eligible tenants whose source of income is not
protected might be enough to raise a genuine issue of material fact concerning source of
income discrimination. But in this case, it is undisputed that all of the non-voucher
tenants at Eagle Pointe Apartments participate in the Low-Income Housing Tax Credit
Program, which sets their reduced rent. While the Voucher Program qualifies as Ms.
Cooper’s source of income, the Tax Credit Program does not qualify as a source of
income to the tenants in that program.
Security Properties produced evidence that it sets each tenant’s rent according to
the rules and regulations of the program in which the tenant participates. Ms. Cooper
counters that the rules of each program do not prevent landlords from lowering the rent

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charged to tenants in the Voucher Program so that it equals the lower rents paid by
tenants in the Tax Credit Program. While Ms. Cooper is correct, her argument misses the
point.
The RLTA does not require all rents to be equal. Instead, it prohibits a
disfavorable distinction in rent against a tenant based on that tenant’s source of income.
Here, Ms. Cooper’s rent was set at or below fair market value according to the rules and
regulations of the Voucher Program. Security Properties charged the tenants in the Tax
Credit Program a lower rent because it received a tax credit for doing so. In other words,
the difference in rent is based on tax credits to Security Properties, it is not based on Ms.
Cooper’s participation in the Voucher Program. This distinction is not prohibited by
RCW 59.18.255. Therefore, the trial court did not err in granting summary judgment and
dismissing Ms. Cooper’s complaint.
BACKGROUND
Security Properties has owned Eagle Pointe Apartments in Spokane since 2017.
All of the apartments at Eagle Pointe are rented to low-income tenants who qualify for
one of two federal programs: the Low-Income Housing Tax Credit Program under
Section 42 of the Internal Revenue Code, or the Section 8 housing. It is undisputed that
tenants in the Tax Credit Program are charged a lower rental rate than tenants in the
Voucher Program. Regardless of the program, all rental rates at Eagle Pointe are below
fair market value.

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Ms. Cooper has been a tenant at Eagle Pointe since approximately August 2014.
For the entirety of her tenancy Ms. Cooper has participated in the Voucher Program.
This program is administered by the Spokane Housing Authority.
In September 2018, Ms. Cooper sent an email to the Housing Authority inquiring
into a notice she received from Eagle Pointe about an increase in her rent that had been
authorized by the Housing Authority. She asked, “I guess I am curious if I can be charged
more simply because I have financial help (section 8).” Clerk’s Papers (CP) at 1009. The
Housing Authority responded that it was its policy to require landlords “to submit a
request for a rent increase in writing to [its] inspection team no later than 60 days before it
takes effect.” CP at 1007.
Five months later, Ms. Cooper sent another email to the Housing Authority asking
whether they had any procedure to correct the higher amount of rent that she was charged
for participating in the voucher program as opposed to tenants who did not participate in
the program. The Housing Authority directed her to contact the Tenants Union of
Washington State to assist her in looking into the issue.
Ms. Cooper also sent an email to Eagle Pointe stating her concern. She worried
that, as her income increased, she would eventually be required to pay the full rent rate
under the Voucher Program, which was higher than the rent charged to non-voucher
tenants. Other than the conversation Ms. Cooper’s email references with an Eagle Pointe

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5
property manager, the record does not show that Eagle Pointe responded to Ms. Cooper’s
concerns.
On January 30, 2020, Ms. Cooper emailed Eagle Pointe property management
inquiring on behalf of a friend about the rent rate for a prospective tenant with and
without the Voucher Program. Eagle Pointe property management responded with two
different rates: for a two-bedroom apartment the rental rate was $874 per month with a
voucher and $834 per month without a voucher. For a three-bedroom apartment, the rent
was $1,190 per month with a voucher, and $943 per month without a voucher. The
property manager further explained that the Housing Authority calculated the tenant’s
portion of the rent, and that it varied with every tenant based on their household income.
In February 2020, Ms. Cooper informed Eagle Pointe that she intended to report them to
the local housing authorities due to the higher rent charged to tenants with a voucher,
such as herself.
In August 2020, Ms. Cooper filed a class action lawsuit, on behalf of herself and
others similarly situated, against Security Properties Residential, LLC, and Eagle Pointe
ICG, LLC for discriminating against tenants based on their source of income, in violation
of Washington’s RLTA, specifically RCW 59.18.255(1)(c). Ms. Cooper alleged Security
Properties quoted and charged higher rental rates to tenants participating in certain low-
income housing programs than to those participating in other low-income programs or no
program at all.

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The trial court granted Security Properties’ motion for summary judgment and
dismissed Ms. Cooper’s complaint. The court determined that, as a matter of law,
Security Properties did not discriminate against its tenants or prospective tenants based
on the housing program they participated in, “especially in light of the Eagle Pointe
Apartments only offering housing to those who participate in low-income housing
programs.” CP at 1036. Further, it concluded Ms. Cooper failed to present evidence that
Security Properties discriminated against similarly situated tenants or prospective tenants.
Ms. Cooper now appeals.
BACKGROUND ON RENTAL ASSISTANCE PROGRAMS
Before considering the specific issues raised in this case, it is important to
understand the two rental assistance programs that benefit tenants at Eagle Pointe
Apartments.
A. Low-Income Tax Credit Program: 26 U.S.C. § 42
The Section 42 housing is a property based tax benefit program that incentivizes
private landlords to provide low-income housing. 26 U.S.C. § 42; see CP at 92. The
statute “provides substantial federal income tax credits as an incentive for developers to
construct and operate housing for low-income families.” In re Greens of Pine Glen Ltd.
P’ship, 356 N.C. 642, 644, 576 S.E.2d 316 (2003).
Under the tax credit program, a property must meet one of the two federal
standards to receive a benefit: at least 40 percent of the units must be rented to tenants

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with a household income of 60 percent or less of the area’s median income, or 20 percent
of the units must be rented to tenants with a household income of 50 percent or less of the
area’s median income. 26 U.S.C. § 42. Landlords agree to charge lower rent for tax
credit units in exchange for tax credits. Id. “Generally, a resident’s rent plus the utilities
s/he pays for his or her unit must not exceed approximately 30% of Household income.”
CP at 90.
The program is not a source of income to the tenant. Instead, tenants who qualify
for the program are third-party beneficiaries of the tax credit provided to property
owners. A tenant is eligible to rent a tax credit unit only if their household income is 60
percent or below the area’s median income. 26 U.S.C. § 42.
“Public agencies within each state administer the program and allocate the
available federal and state tax credits.” Greens of Pine Glen, 356 N.C. at 644. Per the
declaration provided by Security Properties’ Regional Manager, the Washington State
Housing Finance Commission (WSHFC) administers the program in Washington. See
CP at 91-93. The income limits and maximum rent that landlords can charge each year
for tax credit tenants are set by the federal program and published by WSHFC.
The total rent payable by the tenant is calculated by taking the gross rent
amount that is provided to us, subtracting the utility allowance which is set
by HUD and which the tenant pays directly to the utility provider, and then
the different [sic] is the maximum chargeable rent that we can charge for a
unit under the 24 Section 42 requirements.
CP at 92.

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Although landlords cannot set rents higher than the maximum allowed under the
federal program in order to receive the tax credits, Security Properties concedes they have
discretion to charge less than the maximum rent set by the federal program if the market
will not support the maximum rent rate and they cannot fill all of their apartments. To
determine what the market in Spokane County can and cannot support, Security
Properties compares rent rates and occupancy levels at other low-income and
conventional rental properties in the area. Based on the reports, Security Properties can
set rent for tax credit units at less than the maximum rent rate set by the federal program.
In 2019 and 2020, it continued to charge the 2018 rate plus a $25 increase based on the
local economy.
B. Housing Choice Voucher Program: 42 U.S.C. § 1437f
The Housing Choice Voucher Program, commonly known as Section 8, provides
tenant-based rental assistance to low-income households in the form of vouchers. 42
U.S.C. § 1437f; 24 C.F.R. § 982.1. “Congress created the Housing Choice Voucher
Program to ‘aid [ ] low-income families in obtaining a decent place to live’ and to
‘promot[e] economically mixed housing.’” Austin Apt. Ass’n v. City of Austin, 89 F.
Supp. 3d 886, 889 (W.D. Tex. Feb. 27, 2015) (quoting 42 U.S.C. § 1437f (a)). The
program is administered by state or local agencies called public housing agencies, which
must comply with federal guidelines concerning housing quality standards and rent

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limitations. 24 C.F.R. §§ 982.1, 982.52; see CP at 73. The United States Department of
Housing and Urban Development (HUD) provides funds for housing and funds to
administer the program directly to the public housing agencies “so eligible families can
afford decent, safe, and sanitary housing.” 24 C.F.R. § 982.1(a)(1).
Unlike a tax credit, the voucher subsidy is a benefit to the individual tenant rather
than the unit or property. 24 C.F.R. § 982.1(b)(1). The public housing agencies
determine whether individuals are eligible to receive a voucher. Id. at § 982.201. Once
approved, tenants in the voucher program can choose any privately owned housing that
meets certain program requirements and provides rent within specified limits. Id. at §§
982.302(a), 982.1(b)(2). When a tenant finds a qualifying unit, the public housing
agency negotiates with the landlord to determine a reasonable rent, and enters into a
contract specifying the maximum monthly rent the landlord may charge. 42 U.S.C. §
1437f(c); see 24 C.F.R. §§ 982.1(a)(2), 982.507(a). Further, the public housing agency
must approve and deem the rent reasonable any time a landowner wishes to increase rent.
“At all times during the assisted tenancy, the rent to owner may not exceed the reasonable
rent as most recently determined or redetermined by the [public housing agency].” 24
C.F.R. § 982.507(a)(4).
i. Housing Choice Voucher rent reasonableness in tax credit covered units
Reasonable rent is defined as a rent rate to the landowner “that is not more than
rent charged: (1) For comparable units in the private unassisted market; and (2) For

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comparable unassisted units in the premises.” 24 C.F.R. § 982.4. The public housing
agency’s reasonableness calculation for tenants with vouchers looking to rent units that
are also covered by tax credit is governed by 24 C.F.R. § 982.507(c). Under this
regulation, a rent comparison is not required if the voucher rent does not exceed the rent
for the tax credit units not occupied by the voucher program participants. 24 C.F.R. §
982.507(c)(1). If the rent for voucher recipients exceeds the tax credit rent, the maximum
reasonable rent that can be charged a voucher participant is based on a comparability
study and cannot exceed the lesser of the “(i) Reasonable rent as determined pursuant to a
rent comparability study; and (ii) The payment standard established by the [public
housing agency] for the unit size involved.” 24 C.F.R. § 982.507(c)(2).
Here, because all of the Eagle Pointe apartments are also covered by the tax credit
program, the maximum rent that can be charged to a voucher participant is either the
same rate as tax credit units or, if greater than a tax credit unit, the lesser of the
reasonable rate of comparable units based on a comparability study or established by the
public housing agency for the unit size involved.
ii. Housing Choice Voucher tenant proportionate rent
Once a contract between the public housing agency and the landowner is formed,
the public housing agency will make payments to the landowner on behalf of the tenant.
42 U.S.C. § 1437f(c). A tenant may not pay a landowner more than the rent amount
charged minus the public housing agency subsidy payment to the landowner. 24 C.F.R. §

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982.451(b)(4). “The amount of the monthly housing assistance payment by the [public
housing agency] to the owner is determined by the [public housing agency] in accordance
with HUD regulations and other requirements.” Id. at § 982.451(b)(1). The calculation
of the subsidy that the public housing agency must pay on behalf of a participating tenant
is laid out in an extensive set of statutes and regulations. See 42 U.S.C. § 1437f(o);
24 C.F.R. § 982.501-.521.
Every year, HUD releases the fair market rents for different geographic regions.
24 C.F.R. § 982.503. The fair market rents are determined by the area’s rental market
conditions, and are relied on to determine the subsidy amount provided to each voucher
program participant. 24 C.F.R. § 982.503. The public housing agency uses the fair
market rent to establish local “payment standard” for the geographical areas within its
jurisdiction. 24 C.F.R. § 982.503(c)(1). The payment standard is the maximum monthly
subsidy amount a public housing agency will pay for a specific type of apartment within
the area. 24 C.F.R. §§ 982.503(b), 982.505(a). The payment standard is generally set
between 90 percent and 110 percent of the fair market rent for that area. 42 U.S.C. §
1437f(o)(1)(B), 24 C.F.R. § 982.503(a)(1)(i).
Tenants under the program generally must contribute 30 percent of their monthly
income, unless an exception applies allowing them to pay less. 42 U.S.C. §
1437f(o)(2)(A). Depending on the situation of the tenant, they may be exempt from
paying the general minimum rent of 30 percent of their adjusted monthly income, and

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may be eligible to pay a minimum rent between $0.00 and $50.00. 24 C.F.R. § 5.630; see
CP at 76-77. However, if an apartment costs more than the payment standard, tenants are
required to make a larger contribution. “Such tenants must also pay any amount by
which their rent exceeds the established payment standard.” Nozzi v. Hous. Auth. of the
City of Los Angeles, 806 F.3d 1178, 1184-85 (9th Cir. 2015).
iii. Ms. Cooper’s rent
According to Security Properties and undisputed by the parties, the Spokane
Housing Authority is the local public housing agency that administers the federally
funded voucher program and determines the reasonable rent rate for each voucher
participant within Spokane.
Since she began renting at Eagle Pointe, Ms. Cooper’s total rent has varied. In
2014, her rent was set at $820 per month. In 2020, at the time she filed this lawsuit, her
total rent was set at $1,007 per month. Ms. Cooper’s personal responsibility for rent
beyond the voucher is based on her income, not on the total rent charged. During that
same period of time, the portion of rent that Ms. Cooper was personally required to pay in
addition to the voucher ranged from $0.00 to $640.00 per month.
Ms. Cooper admits that she could qualify for a reduced rent under the Section 42
tax credit program, and that if she were to chose this option her personal share of rent
would actually increase. Wash. Ct. of Appeals oral argument, Cooper v. Eagle Pointe

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ICG, LLC, No. 39596-1-III (Apr. 24, 2024), at 9 min., 54 sec. through 9 min., 55 sec. (On
file with court).
ANALYSIS
We review de novo the superior court’s order dismissing Ms. Cooper’s complaint
on summary judgment. Lockett v. Saturno, 21 Wn. App. 2d 216, 221, 505 P.3d 157
(2022). “Summary judgment is appropriate only if there are no genuine issues of
material fact and the moving party is entitled to judgment as a matter of law.” Id.
In order to determine if Ms. Cooper has raised a genuine issue of material fact
sufficient to survive summary judgment, we must interpret the statute. Our goal in
interpreting this statute is to ascertain the legislative intent. In re Marriage of Schneider,
173 Wn.2d 353, 363, 268 P.3d 215 (2011). We do this by first looking to the plain
language of the statute. Id. “‘When the plain language [of a statute] is unambiguous—
that is, when the statutory language admits of only one meaning—the legislative intent is
apparent, and we will not construe the statute otherwise.’” O.S.T. ex rel. G.T. v.
BlueShield, 181 Wn.2d 691, 696, 335 P.3d 416 (2014) (quoting State v. J.P., 149 Wn.2d
444, 450, 69 P.3d 318 (2003)). If this inquiry leads to more than one reasonable
interpretation, the statute is ambiguous. State v. Dennis, 191 Wn.2d 169, 172-73, 421
P.3d 944 (2018). When a statute is ambiguous, it is appropriate for this court to refer to
the legislative history and other aids of statutory construction. Anthis v. Copland, 173
Wn.2d 752, 756, 270 P.3d 574 (2012).

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RCW 59.18.255(5) was passed in 2018 as part of the RLTA. See LAWS OF 2018,
ch. 66, § 1. It was enacted to create remedies for tenants by providing protection for
tenant interests vulnerable to a landlord’s upper hand, “especially during times of housing
shortages.” Lockett, 21 Wn. App. 2d at 221. The purpose of the amendment was to
“‘ensur[e] housing options.’” Id. (alteration in original) (quoting LAWS OF 2018, ch. 66,
§ 1).
The relevant portions of RCW 59.18.255 provide:
(1) A landlord may not, based on the source of income of an otherwise
eligible . . . current tenant:
. . . .
(c) Make any distinction, discrimination, or restriction against a . . .
current tenant in the price . . . relating to the rental . . . of real property.
“‘Source of income’” includes “benefits or subsidy programs including housing
assistance, public assistance . . . and other programs administered by any federal, state,
local, or nonprofit entity.” RCW 59.18.255(5).
To date, no court has developed the elements of a cause of action under this
statute, and the parties here do not make any attempt to do so. Nor do the parties offer or
suggest a framework for applying the facts to the law. Still, we must decide the
preliminary question of whether Ms. Cooper has produced evidence to raise a material
issue on whether she is charged a different rate of rent based on her source of income.

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RCW 59.18.255(1) does not require a landlord to charge the same rent to all
tenants. And it does not prevent a landlord from charging different rents when the
difference is based on a legal reason apart from where a tenant obtains their income.
Importantly, RCW 59.18.255(1) does not prohibit a landlord from reducing rent based on
a tax credit to the landlord. Instead, the statute prohibits a landlord from making any
discrimination or distinction in rent against a current tenant “based on” the source of the
tenant’s income, i.e., where the tenant gets their income. In other words, Ms. Cooper has
to show not only that she is charged more rent than other eligible tenants, but that the
reason she is charged more rent is because she receives a voucher to supplement her
income.
Ms. Cooper fails to produce any evidence that she is charged more rent because
she receives a voucher that is used to augment her income. The undisputed evidence is
that Ms. Cooper’s rent is set at or below market rate and subject to approval by the
housing authority. While it is true that the rental rate charged to participants in the Tax
Credit Program is different than the rent charged to Ms. Cooper, there is no evidence that
this distinction is based on Ms. Cooper’s source of income. Instead, it is based on a
program that provides tax credits to the landlord; tax credits that do not qualify as a
source of income to the tenants in that program.
Nevertheless, Ms. Cooper contends that as between her and the Section 42 tenants,
she is the one paying a different rate. She does not provide any authority or reasoning to

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support this position. Given the circumstances of this case, we disagree. The two
programs at issue here presume that the tenants in the Voucher Program will pay rent at
or near market rates, while tenants in the Tax Credit Program will pay a reduced rent.
Thus, according to the regulations for each program, it is the tenants in the Tax Credit
Program that pay a different rate, not Ms. Cooper.
Moreover, the difference between the two programs is not simply theoretical. By
complying with the regulations from each program, Security Properties is able to sustain
its business model while continuing to provide options for low-income tenants. While we
do not decide the question of federal pre-emption, we note that the different rent rates
charged by Security Properties are not only allowed by the two federal programs but
encouraged. Indeed, there is a specific regulation that sets different rental rates when a
landlord rents to tenants in both the Voucher Program as well as the Tax Credit Program.
When the rent charged to a tenant in the Voucher Program is higher than the rent charged
to a tenant in the Tax Credit Program, the regulations provide a specific method for
determining the reasonable rent that can be charged to the tenant in the Voucher program.
See 24 C.F.R. § 982.507(c)(2). Here, there is no evidence or allegation that the rent
Security Properties charges Ms. Cooper is not reasonable according to the method
established by the regulations. Allowing Security Properties to set different rents based
on the rules and regulations of the two programs ensures that low-income tenants have
increased housing options.

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The parties disagree on whether the antidiscrimination provision in RCW
59.18.255(1) is pre-empted by federal law. However, we do not need to decide this
question because it presumes a defense to a statutory violation and there is no evidence of
a violation here.
We hold that Ms. Cooper has failed to meet her burden on summary judgment of
producing evidence that creates a genuine issue of material fact. Instead, the undisputed
evidence is that Security Properties charges a different rate to Section 42 tenants based on
the tax credit Security Properties receives for doing so. This tax credit is not a source of
income for any of the tenants at properties managed by Security Properties.
ATTORNEY FEES ON APPEAL
Both parties request attorney fees on appeal. Ms. Cooper requests costs be
awarded on appeal and the issue of attorney fees preserved on remand, without providing
any justification other than her claim that Security Properties discriminated against Ms.
Cooper and others similarly situated. Because she does not prevail, we deny her request
for attorney fees on appeal.
Security Properties requests fees pursuant to RAP 18.9(a) for a frivolous appeal.
This rule provides:
The appellate court on its own initiative or on motion of a party may order
a party or counsel, or a court reporter or authorized transcriptionist
preparing a verbatim report of proceedings, who uses these rules for the
purpose of delay, files a frivolous appeal, or fails to comply with these rules
to pay terms or compensatory damages to any other party who has been

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harmed by the delay or the failure to comply or to pay sanctions to the
court.
RAP 18.9. Security Properties bases their argument on its assertion that federal law pre-
empts the state statute. We do not find Ms. Cooper’s appeal to be frivolous and exercise
our discretion to deny attorney fees under this rule.
Affirmed.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
_________________________________
Staab, J.
WE CONCUR:
_________________________________
Fearing, J.
_________________________________
Lawrence-Berrey, C.J.