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)

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

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