The Department of Housing and Urban Development (HUD) recently released new guidance for the Fair Housing Act (the Act). The new guidelines prohibit landlords from implementing blanket bans against prospective tenants who have a criminal history.

HUD’s announcement clarifying the scope of fair housing laws was spurred by the increased difficulty former criminals face when locating housing — a growing problem as those swept up in the decades-long wave of harsh sentences for drug offenses are re-entering the housing market.

The new guidance was announced in an effort to promote equal housing and end discriminatory tenant screening practices, which have, in effect, disparately impacted racial minorities — protected classes under the Act. Landlords who impose blanket bans on prospective tenants with criminal records are subject to civil penalties and tenant money losses involved in housing discrimination.

HUD’s guidance and disparate effects

The Fair Housing Act, part of the federal Civil Rights Act of 1968, was enacted to prevent discrimination in the sale, rental or financing of housing based on race, color, religion, sex, disability, familial status or national origin. [42 United States Code §3601, et seq.]

Notably, tenants with a criminal record are not among the defined protected classes under the Act. However, in a related court ruling last year, the U.S. Supreme Court decided the intent behind a housing policy is immaterial to whether that policy is discriminatory. Rather, a regulation or policy may be discriminatory and prohibited by the Act if it has the effect of disparately impacting — dissimilar or unlike consequences — a protected class under the Act.

As HUD points out, criminal history-based housing restrictions may disproportionately impact racial minority groups — in particular, black and Latino tenants — since these groups are convicted and incarcerated at higher rates than the general population. Thus, housing restrictions based on a tenant’s criminal history are prohibited under the Act.

With unequal impact in mind, HUD’s guidance effectively expands the Act’s protective provisions and regulates how landlords may consider criminal convictions when screening tenant applications.

Adjusting your screening policies

HUD’s guidance strictly prohibits landlords from enforcing a blanket ban against renting to all prospective tenants with any criminal record.

However, landlords are to consider a tenant’s criminal history on a case-by-case basis and may exclude tenants with specific convictions. California landlords take note: to lawfully implement housing restrictions based on a tenant’s criminal history, landlords are required to be able to prove their screening policy justifiably serves a substantial nondiscriminatory interest, e.g., when a prospective tenant’s criminal conviction poses a demonstrable threat to fellow tenants. [24 Code of Federal Regulations §100.500]

Thus, a landlord’s reliance on general assumptions and stereotypes that a tenant with a criminal conviction poses a criminal risk to other tenants is an inadequate reason for enforcing policies based on criminal records.

Further, landlords may only consider conviction records and may not use arrest records as the basis for housing restrictions.

When reviewing a tenant’s criminal conviction, landlords need to consider:

  • the nature and severity of a conviction; and
  • the amount of time that has passed since the crime occurred. [Green v. Missouri Pacific R.R. (1975) 523 F.2d 1290]

HUD recommends landlords also consider additional information about a tenant beyond the contents of a criminal record, such as:

  • facts and circumstances surrounding the criminal conduct;
  • the age of the tenant at the time of the crime;
  • the tenant’s rental history before and after the conviction; and
  • evidence of rehabilitation.

To ensure a screening policy does not run contrary to the new guidance under the Act, landlords need to universally apply their screening methodology to all prospective tenants equally. A landlord who uses criminal history as an alleged reason for denying housing to a member of a protected group, but fails to apply the same standard to members of other groups, is involved in perpetuating a discriminatory practice, a violation of Fair Housing laws.

The only exception to these guidelines occurs when a tenant has a conviction for the manufacturing or distribution of controlled substances. Here, a landlord may deny housing based on a conviction for drug manufacturing or distribution — though not based on a conviction for possession — without violating Fair Housing laws. [42 USC §3607(b)(4)]

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