NEW YORK, NY March 01, 2008 —Mayor Bloomberg has vetoed a bill that would have forced private landlords to accept the federally funded housing voucher known as Section 8.

REPORTER: The legislation would make it illegal for landlords to discriminate against tenants based on the source of income they use for rent. The bill's prime sponsor, councilman Bill de Blasio, says too many families end up losing their voucher because they can't find a landlord who will accept it:

DE BLASIO: We have to understand that the fact that many families are unable to use their section 8 voucher in the alloted time, it's a real tragedy and we have to do something to stop that especially in this very difficult housing market.

REPORTER: In his veto statement, Mayor Bloomberg said it's too expensive for some landlords to accept Section 8 because of the paperwork and inspections, and the legislation would lead them to raise rents on the few apartments that are still considered cheap.

De Blasio says 42 council members support the bill, enough to override the mayor's veto.