Can the city compel landlords to participate in a federal housing program? That was the question on the table at a May 4 City Council hearing on legislation proposed by Bill de Blasio, chair of the council’s General Welfare Committee.

The bill, which prohibits discrimination on the basis of source of payment, was written to stop landlords from turning down or evicting tenants who receive rental assistance, such as Section 8 vouchers and HIV/AIDS housing assistance. De Blasio argues that safeguarding these tenants is especially important now, with homelessness on the rise and federal subsidies shrinking.

“We’re on the verge of something horrible on the national level, and, frankly, it’s unifying us on a municipal level,” de Blasio said.

But owners say his good intentions trample on their property rights. “While in theory Section 8 should benefit both tenants and owners, the overwhelming bureaucratic quagmire involved in the administration of the program gives owners ample reason to avoid participation,” said Frank Ricci, in his testimony on behalf of the Rent Stabilization Association, a landlord group.

The bill also drew criticism from the city, which warned that forcing private landlords to accept public dollars could prompt lawsuits.

“Generally when someone makes a case based on financial concerns, that’s deemed to be acceptable, and nondiscriminatory,” said Clifford Mulqueen, a deputy with the city’s Commission on Human Rights.

But de Blasio, a former New York regional director for the U.S. Department of Housing and Urban Development, points out that more than a dozen states already have laws similar to Intro 178.

While the average New York City landlord can turn away a voucher-bearing tenant without a second thought, across the Hudson in Hoboken, that landlord could be fined $10,000 or more under decades-old case law that was signed into an anti-discrimination law by Governor James McGreevey in 2002.

Comparable laws protect renters in California, Connecticut and Washington, D.C. “We have one of the tightest markets in the country, so the state and the city have already placed many regulations on it. Rent stabilization is a good example,” said Ashwani Prabhakar, a staff attorney at the Legal Aid Society Brooklyn Office for the Aging. “I don’t think they could argue that this is an area in which government can’t intercede, because it already has in so many ways.”

De Blasio is willing to compromise on some aspects of the bill, but pointed out that he and his 22 co-sponsors are dead serious about passing it. “This isn’t symbolic legislation,” he said. “Bottom line is we want to create a dynamic here where a Section 8 voucher is seen by a landlord as as good as cash.