Cabinet Posts – A Non-Political Commentary

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I don’t have enough knowledge, or enough time to do the research required, to put forth a proper opinion piece on any other cabinet choice of our incoming president. I have seen the memes, and I am concerned, but I can only speak to this single appointment. When it comes to the position of HUD Secretary, I dare say I have both knowledge and experience. And, I am concerned.

I have been a real estate licensee since the 1970s. I started off in California, and moved to Nevada decades ago. I’ve been a property manager for a very long time. I have owned property management companies, and am currently the broker-owner of a local Reno/Sparks property management firm, specializing in single-family rental homes in the Reno-Sparks area. 

I teach property management and fair housing classes to property managers all over the U.S., a second career I began in 1991. I served 3 terms on the Executive Board of Silver State Fair a housing Council (formerly Truckee Meadows Fair Housing), over several decades. 

Fair housing is my passion. 

My passion for fair housing derives from two different sources. First, as a real estate licensee, I wanted to have accurate information, to be sure I was conducting myself appropriately in my day-to-day property management business. I didn’t (and don’t) want to be named in a fair housing complaint. And, if I’m ever named in a complaint, I don’t want to risk having to struggle to locate records I cannot produce. That’s a major source of my passion for this subject, and why I got involved with our local fair housing agency, in the first place.

Shortly after I first became involved as a fair housing advocate, I put the pieces together of my own history. After hearing story after story of people being denied housing because of things they could not change, I found myself feeling great empathy for the complainants. I didn’t remember it at first, but I had been there.

I was a single mother of a very young child in the 1980s.

child_door_knockingI was also a renter. So many times I cannot recount, I faced discrimination in my attempts to find suitable housing for myself and my daughter. Questions like, “What do you do with your daughter when you’re working?” “How could I rent to a single woman, when I know she’s going to have men in and out of her apartment all the time?” “Who is paying your rent for you?” I was asked these questions repeatedly. Yet, at the time, I was holding a full-time job in my long-term profession of, get this, property management. You might not guess that could happen… a young woman with a responsible career, a good credit rating, and a reliable rental history, discriminated against for something I could not change – the fact I was a single parent, and a female. 

Please, if you will, forgive my long lead-in to this post. Here’s what I really want to say:

Ben Carson is the wrong pick for HUD Secretary.

Really wrong. He not only knows little-to-nothing about fair housing law, and the other laws under HUD’s jurisdiction, he believes the Federal Fair Housing Act has ‘gone too far.’ 

Fair Housing law and principles of equal opportunity are good for my business; they’re good for yours too, if you’re a residential property manager. The more inclusive we can be in offering our rental properties to a broad range of qualified prospects, the quicker we can get our properties rented at fair market rents, to tenants who will pay the rent on time, and take good care of the property. That’s what we want, isn’t it? 

As real estate licensees, we must be on the side of supporting fair housing law. It helps us, and it helps our clients and customers.  #ItIsUpToUs

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Do you use criminal records in your tenant selection process?

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If so, you’ll want to read this.

 

All levels of government should adopt requirements making it clear [that housing] cannot be denied to those with a criminal justice history, unless there is a legitimate public safety reason for doing so.”

-Deborah De Santis, President and CEO of CSH (Corporation for Supportive Housing)

ball-and-chain

 

In November last year, HUD released a memo specifically addressing a practice employed by many rental property owners and managers – the use of an applicant’s criminal records to determine eligibility for rental housing. Just today, HUD released additional guidance for housing providers, further clarifying the memo. That’s when the news media picked it up.

As expected, you’ll hear much talk out there on both sides of the issue. Some claim it’s government overreach. Others celebrate efforts to provide needed support to those reentering communities from incarceration. In my view, as a housing provider, if you’re using clear and objective criteria for evaluating rental prospects, you’re not likely to run afoul of HUD’s position. In simple language, it says:

  • Housing providers should have policies that apply to everyone, and are evenly enforced.
  • An arrest history is not the same as conviction history. Simply because someone was arrested for a crime does not mean he/she committed the crime.
  • If a housing provider considers criminal background when evaluating potential tenants, the housing provider should not have a blanket “one-strike” rule that fails to take into consideration the type of crime, the length of time since the crime was committed, and the applicant’s actions/activities since the crime.
  • Applicants should have the right of “due process” when it comes to the landlord’s qualification criteria. In other words, the applicant should have the opportunity to explain extenuating circumstances, and have the landlord reconsider its decision.
  • Some crimes can be “one-strike” offenses, provided the housing provider is able to justify their policy protects the safety of others, and/or the property.

One important piece of HUD’s guidance on this issue is contained in the following excerpt from HUD’s FAQ on the matter:

…when owners make the decision to reject an applicant on the basis of a criminal record, the owner must provide the applicant with a written rejection notice.  This notice must state the reason for the rejection, advise of the applicant’s right to respond to the owner in writing or to request a meeting within 14 days to dispute the rejection, and advise that persons with disabilities have the right to request reasonable accommodations to participate in the informal hearing process.

Since most of us already provide written notices to prospects when we deny their applications to rent, this shouldn’t be much of a burden. We simply need to remember to inform the prospect of his/her right to request a meeting to dispute a rejection based on criminal history. So far, our credit reporting agency has not, to my knowledge, amended our “Adverse Action Notice” to include such a provision. Until they do, should the need arise, we’ll be adding language to comply with HUD’s rule.

How do you view criminal background information when evaluating a prospective tenant? Will this new guidance change your policies or procedures? If so, how?

 

 

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Disparate Impact – Stop with the Panic Bells, Already!

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united-states-of-america-signAs you likely are aware, the Supreme Court of the United States (SCOTUS) handed down its ruling this week, affirming the validity of Disparate Impact Theory in Fair Housing cases. Immediately, some of my colleagues in the property management industry began ringing the panic bells. “This will change everything!” No, it won’t.

This is Nothing New!

HUD and DOJ have been using Disparate Impact Theory to prove fair housing cases for 40 years! All this SCOTUS decision did, was to uphold policies, rules, and practices that were already in place. This changes nothing. It simply affirms what has been the case for decades.

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Service Animals, Companion Animals, Assistance Animals…Oh My!

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Service_AnimalsAn open letter to the Property Management community…

As a property manager myself, I certainly understand and sympathize with your concerns around the topic of service animals. There still seems to be a great deal of confusion in the industry over which laws apply, in this area. In a blog post a few years back, I discussed the difference between the Americans With Disabilities Act (ADA) and the Federal Fair Housing Act (FFHA). It’s important to remember that these are two different laws, with entirely different applications. ADA applies to public accommodations only – not housing. The FFHA, however, applies to housing. If you’re not clear on the differences, please take a few moments to read that blog post. It contains links to important HUD documents that explain the differences between the two laws, particularly in the area of service/assistance animals.

 

In very brief summary, ADA holds quite a narrow definition of “Service Animal.” For purposes of ADA, a Service Animal is a trained dog (and, in some cases, a miniature horse) – one that is specifically trained to perform a task to aid a person with a disability. The FFHA, on the other hand, takes a much broader view. The terms “service animal,” “therapy animal,” “comfort animal,” “companion animal,” “assistance animal…” all mean the same thing, under fair housing law. (For purposes of simplicity from this point forward, I’ll collectively refer to these animals as “Service Animals.”) Essentially ANY animal (or animals) who aids a person with a disability, in some way, to cope with the outcomes of that disability is considered a Service Animal under the FFHA. Furthermore, those animals do not have to be trained to perform a specific task. Sometimes, their ‘job’ is simply to exist! There is a great deal of scientific evidence out there to support the fact that animals are beneficial to our health. This concept is embraced by the FFHA.   Continue reading

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Converting Rentals to 55+ Status (HOPA)

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seniorsThe Reader’s Digest version of this post, for those who prefer that kind of thing, is “No.” Just no. Only in very rare cases, can you convert an existing rental property from a traditional residential rental (welcoming families with children), to a 55+ property, under the exemptions contained in the Housing for Older Persons Act of 1995 (HOPA).

A property manager recently asked me whether her client could declare the client’s duplex a “55+ Community,” ‘since it’s a multifamily property.’

First, I suggested he talk to his lawyer, or Silver State Fair Housing Council. Then, “A duplex isn’t a ‘multifamily’ property. That term generally applies to 4+ units. Since this property is not part of a larger ‘association’ of similar properties who’ve formed an association… and, since there are no governing documents for your client’s property that address any kind of HOPA exemption, no. No, your client can’t do that.”  Continue reading

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When Saving Time Can Cost You Time (and Money!)

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As successful property managers, we quickly learn the importance of streamlining our policies and procedures, by establishing methods to save both time and effort. The profit margin in this business is tight, and if we fail to employ standardization and time-saving strategies, we’ll never succeed. I’ve noticed the average burnout time for most new property managers seems to be about 2 years. That’s how long it takes to realize it’s not a money-making business, unless we have policies and procedures in place that make the job doable.

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New Fair Housing Class – Available Nationally

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justiceThe finishing touches have been applied, and it’s ready to go! A brand new class entitled “What’s New in Fair Housing: Cases, Settlements & Trends for Property Managers” is the result of many months of research, analysis, and compilation of information about the steadily-evolving trends and cases around the Federal Fair Housing Act, today. As a property manager, you’re undoubtedly aware of the huge impact this body of law has on our industry. Still, you may find yourself confused about such things as

  • The differences between a “service animal,” “therapy animal,” “companion animal,” and “assistance animal.”
  • What you can and cannot ask a prospective resident about his or her disability.
  • Whether you could be held liable for a discriminatory statement made by someone else.
  • Whether you can continue to use the same tenant qualification criteria you’ve always used, without risking a fair housing claim.

This course was designed as a 3-hour program, but can be extended to as many as 6 hours, depending on the needs of your organization. Believe me, there’s plenty of information to fill the time!

Not only will this class be an eye-opener for all who attend, you’ll actually take away some very practical tools for use in your day-to-day business – stuff you can put to work for your company right away!

Want more information? Ask away, by leaving a comment below!

 

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Assistance Animal Fair Housing Case in Reno Nevada

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BassetHot off the presses! The U.S. Department of Justice just announced a settlement with a Reno, NV apartment complex regarding the management’s treatment of residents with assistance animals. From the DOJ’s press release:

“The department’s complaint had alleged that the owners, employees and management company of Rosewood Park Apartments violated the Fair Housing Act by limiting individuals with certain assistance animals to a particular section of Rosewood Park Apartments; subjecting such individuals to pet fees; requiring assistance animals to be licensed or certified; and barring companion or uncertified service dogs altogether.”

The settlement in this case was $127,500, payable to a family who was denied housing (because of their assistance animal), Continue reading

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Disparate Impact: You don’t have to intend to discriminate to violate fair housing law!

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JuEqual_Housing_Logo_GIFst today, The U.S. Department of Housing and Urban Development (HUD) issued its “final rule”   on disparate impact under the federal Fair Housing Act.

This final rule responds to a heated battle between housing providers (broadly defined to include all parties involved in selling, renting, insuring, lending, and zoning of residential property in the U.S.) and fair housing advocates that ended up in front of the Supreme Court last year. (Just this month, the case was withdrawn, presumably in response to HUD’s published position on the issue.)

 What is “Disparate Impact?”

Section 100.500(a) provides that a “discriminatory effect” occurs where a facially neutral practice actually or predictably results in a discriminatory effect on a group of persons protected by the Act (that is, has a disparate impact), or on the community as a whole on the basis of a protected characteristic (perpetuation of segregation). Any facially neutral action, e.g., laws, rules, decisions, standards, policies, practices, or procedures, including those that allow for discretion or the use of subjective criteria, may result in a discriminatory effect actionable under the Fair Housing Act and this rule. For examples of court decisions regarding policies or practices that may have a discriminatory effect, please see the preamble to the proposed rule at 76 FR 70924-25.

Simply stated, disparate impact occurs when a housing provider’s policies or actions, although neutral and non-discriminatory on their face, serve to disproportionately negatively impact a protected class of individuals, as defined under the Fair Housing Act.   Continue reading

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Violent Residents – Guilty by Association?

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Many of our tenants (and owners, too!) have been going through some tough economic conditions in the last few years. It’s no surprise that incidences of domestic violence tend to increase when a family is suffering economic hardship. Studies show that domestic violence is three times more likely to occur when couples are experiencing high levels of economic strain.   Continue reading

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