It is a common practice for landlords to check the criminal background of potential tenants before approving or denying an application. Most landlords, relying on the traditional viewpoint holding that criminal history may reveal the character of a person and indicate an inclination toward future criminal acts, check a potential tenant’s criminal background to minimize the risk of a future tenant creating health and safety risks or damaging the leased property. Despite the commonness of the practice, landlords may not realize that they are potentially exposing themselves to liability under the Fair Housing Act and related laws by basing decisions on applicants’ criminal background.
The data the Department of Housing and Urban Development (“HUD”) has reviewed shows that Black and Brown persons are arrested, charged, convicted, and incarcerated at a disproportionate rate compared to other racial groups in the United States.1 There are a multitude of reasons for this disparity, including “The New Jim Crow”2 and discriminatory policing. Regardless of the cause, those statistics indicate Black and Brown persons are more likely to have a criminal background than white persons. As a result, since Black and Brown persons have more criminal records than white persons, using criminal background to exclude people from housing, jobs, or anything will result in more Black and Brown persons being excluded than those from other racial groups.
That is a potential problem under the Fair Housing Act, which prohibits discrimination in the rental context on the basis of seven protected classes, including race. Discrimination under the Fair Housing Act can take several different forms. One form of discrimination is based on the disparate impact theory, which covers situations where persons belonging to a protected class are disproportionately impacted by a housing policy or practice. When there is no legitimate reason supporting the policy or practice that creates the disproportionate impact, the Fair Housing Act will deem the policy or practice discriminatory.
Since excluding potential tenants on the basis of criminal activity will affect more Black and Brown persons than other racial groups, it has a disproportionate impact on Black and Brown persons. Accordingly, landlords must have a legitimate reason to support the exclusion. Otherwise, the landlord may face liability under the Fair Housing Act.
HUD has been heavily focused on how housing providers use criminal background in housing decisions for many years. HUD recently issued new guidance on this issue, titled GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING on April 29, 2024. In that guidance, HUD reiterates that overly broad criminal background screenings that have unjustified disparate impact violates the Fair Housing Act. In light of this guidance, it is important for housing providers to give some consideration to how they are screening potential tenants.
To comply with the Fair Housing Act, landlords who use criminal background screening should consider developing a written policy and procedure governing the use of criminal history in rental decisions. Recent HUD guidance and proposed rules indicate HUD believes an individual assessment of applicants’ criminal background is required in all cases. Accordingly, a landlord’s screening policy should define and explain how the landlord will decide each case. At a minimum, the policy should clearly define and state the categories of convictions that will affect a rental decision. For instance, does the landlord only want to exclude people for violent crimes? What about drug crimes? The policy must also clearly state how the decision to rent to someone will be affected. For instance, will there be an automatic denial for some crimes and discretionary denial for other? Furthermore, the policy should establish timeframes for how long a conviction will affect decisions to rent to a person. For instance, a landlord might decide to have a longer period of exclusion for murder than for a simple possession of marijuana charge. Most importantly, each exclusion, whether actual or potential, must be justified by a credible threat to health and safety. Arbitrary and overly broad exclusions are particularly problematic under the Fair Housing Act.
Now more so than ever it is important for landlords to put some thought into how and why they are making rental decisions based on criminal background. The experienced attorneys at Blanco Tackabery stand ready to provide counsel for making those difficult decisions or designing a policy to assist in making them.
1 See HUD, GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING, pg. 21 (April 29, 2024), Guidance on Application of the Fair Housing Act to the Screening of Applicants for Rental Housing (hud.gov); see also HUD, GUIDANCE ON APPLICATION OF FAIR HOUSING ACT STANDARDS TO USE OF CRIMINAL RECORDS BY PROVIDERS OF HOUSING AND REAL ESTATE-RELATED TRANSACTIONS (April 4, 2016), Office of the General Counsel (hud.gov).
2 Michelle Alexander popularized the term “The New Jim Crow” with her 2010 non-fiction book with that title. As a concept, The New Jim Crow refers to the theory that the United States’ criminal justice system is a technology used to exert racial social control and which has an effect very much like the original Jim Crow laws of racial segregation.
Henry Hilston employs his experience in state and federal litigation as an asset in his representation of affordable and conventional multifamily property owners and managers. In that practice, he advises property management companies on a wide range of issues, including evictions and other landlord-tenant disputes, VAWA, the Fair Housing Act, and compliance issues under federal and state affordable housing programs, such as the Low-Income Housing Tax Credit (LIHTC) program and HUD and USDA-Rural Development rental subsidy programs. He also assists those clients with the preparation, review, and revision of management documents, including tenant selection plans, management agreements, and leases.