Regulations and Restrictions on the Use of Criminal Records in Housing Decisions
A critical risk management policy and practice for housing providers is the duty to stay current with applicable laws governing landlord-tenant matters. Housing providers must navigate a complex system of federal, state, and local law that regulate some, but not all, aspects of the tenant screening and selection process to determine legal compliances applicable to the location of their business.
It is particularly important to be knowledgeable of fair housing laws and tenant screening legislation regarding regulations, restrictions, and prohibitions on the use of criminal records in housing decisions including requirements for individualized assessments.
In April 2016, the U.S. Department of Housing and Urban Development (HUD) published guidance on the application of the Fair Housing Act to the use of criminal history by housing providers for tenant decisioning. The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect because of race, national origin or other protected characteristics. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad criminal history-related bans are likely to lack a legally sufficient justification. Thus, “a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified, and therefore such a practice would violate the Fair Housing Act.”
HUD cites Department of Justice statistics that nearly one-third of Americans have a criminal record of some sort. Minority populations experience arrests, convictions, and incarceration at rates disproportionate to their share of the general population. Consequently, the use of criminal records-based barriers to housing is likely to have a disproportionate impact on minority home seekers.
The HUD guidance addresses how the discriminatory effects and disparate treatment methods of proof apply in Fair Housing Act cases in which a landlord justifies an adverse housing action, such as a refusal to rent to an individual based on the individual’s criminal history.
While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters of one race or national origin over another (i.e., discriminatory effects liability).
Discriminatory effects liability is assessed under a three-step burden-shifting standard requiring a fact-specific analysis of claims to determine whether a landlord’s use of criminal history to deny housing results in a discriminatory effect in violation of the Fair Housing Act. The three steps are:
- Evaluating whether the criminal history policy or practice has a discriminatory effect
- Evaluating Whether the Challenged Policy or Practice is Necessary to Achieve a Substantial, Legitimate, Nondiscriminatory Interest
- Evaluating Whether There Is a Less Discriminatory Alternative
A blanket prohibition on any individual with a conviction record, regardless of when the conviction occurred, the details of the individual’s conduct, and what the individual has done since then, will not meet the burden of proof.
A landlord may violate the Fair Housing Act if the landlord intentionally discriminates in using criminal history information. Disparate treatment occurs when the landlord treats an applicant or tenant differently because of race, national origin or another protected characteristic. In these situations the landlord’s use of criminal records or other criminal history information as a pretext for unequal treatment of individuals because of race, national origin or other protected characteristics is no different from the discriminatory application of any other rental criteria.
A landlord has a legal duty of care to take adequate measures to protect people and property from unacceptable levels of risk. The criteria for use of criminal history in making housing decisions must be developed with respect to what crimes pose a risk, why such crimes pose a risk, and what constitutes a reasonable time period when the applicant no longer poses an unacceptable risk.
Landlord policies used to make housing decisions that exclude individuals based on criminal history must be tailored to serve the landlord’s substantial, legitimate, nondiscriminatory interest. Where a policy or practice excludes individuals with only certain types of convictions, a landlord will still bear the burden of proving that any discriminatory effect caused by such policy or practice is legally justified.
Individualized Assessment
An individualized assessment may be conducted to determine whether the individual poses a demonstrable risk. The individualized assessment must take into consideration the facts and circumstances surrounding the criminal conduct, taking into account the age of the individual at the time of the conduct, evidence of satisfactory rental history before and/or after the criminal conduct or conviction, and evidence of the individual’s rehabilitation efforts. The individualized assessment allows the applicant to present extenuating circumstances or other mitigating factors regarding the matter.
State and Local Laws
While many states have passed legislation that limits the use of criminal records for employment background screenings, until very recently, there were only a few states that addressed the use of criminal background checks in rental housing decisions. In the last several years however, more states have migrated to fair chance housing policies which regulate and limit the use of criminal background checks in tenant screenings. Fair chance housing laws prohibit the use of advertising language that excludes people with arrest records, convictions, or criminal history. In some cases, fair chance policies broadly prohibit the use of criminal history in screenings. In other cases, ban the box policies require housing providers to remove questions about criminal history from their rental applications and delay criminal history checks until after a conditional lease is offered.
New Jersey
The most recent passage of fair chance housing legislation is the state of New Jersey‘s “Fair Chance in Housing Act.” Regarded as a landmark bill to address issues on a state-wide basis, the Fair Chance in Housing Act prohibits consideration of any criminal record at the initial rental application stage, allows only certain records to be considered after a conditional offer is made, and imposes substantive and procedural standards for withdrawal of a conditional offer. The Act applies to all rental housing providers except owner-occupied premises of four units or less.
Under provisions of the bill, a housing provider before accepting an application fee must provide written disclosure of his policy to review and consider criminal history. The provider must state that an applicant may provide evidence that demonstrates inaccuracies with the criminal record, evidence of rehabilitation, and other mitigating factors regarding criminal history.
A housing provider may not ask nor make an inquiry into a rental applicant’s criminal history prior to making a conditional lease offer to the applicant. An exception is that the provider may consider whether an applicant has even been convicted of manufacturing or producing methamphetamine on the premises of federally assisted housing or is subject to a lifetime sex offender registration requirement.
Even though a conditional lease offer has been made, a housing provider may not consider arrests or charges that did not result in conviction, expunged convictions, convictions vacated by executive pardon or otherwise legally nullified, juvenile adjudications, and sealed records.
To encourage providers to offer housing to individuals with a criminal history, providers are granted immunity from civil liability arising from a decision to rent to individuals with a record, except for a person with convictions for specified violent offenses.
Localities
A number of jurisdictions have enacted fair chance housing ordinances that regulate screening and selection of tenants using criminal history criteria. As examples:
The Seattle City Council passed the “Fair Chance Housing Act” which requires housing providers to include a statement on tenant applications that the provider is prohibited from requiring disclosure, asking about, rejecting an applicant, or taking adverse action based on any arrest record, conviction record, or criminal history except sex offender registry information.
The city of Berkeley California “Fair Chance Access to Housing Ordinance” prohibits the use of criminal history and/or criminal background checks in the tenant selection process for rental housing. It is unlawful to do any of the following with regard to current or prospective tenants:
- Inquire about criminal history,
- Indicate that persons with criminal backgrounds will not be considered for housing, including in rental advertisements, application materials, or verbally,
- Refuse to rent or terminate a tenancy based on criminal history,
- Require disclosure or authorization for release of criminal history,
- Demand higher security deposit or rental amount based on criminal history.
Detroit implemented “Fair Chance Access to Rental Housing”requiring landlords to remove any questions about criminal history from their rental applications. Landlords are not allowed to ask about criminal history during the interview process or conduct tenant background checks until they have offered the tenant a conditional lease.
Cook County Illinois Commission on Human Rights “Just Housing Amendment” uses a three step screening process that requires (1) prequalification checking of credit history, employment, income, payment delinquencies, bankruptcies, etc.; (2) criminal background check which screens only the 3 year criminal history of the applicant (any convictions older than 3 years may not be used to deny a housing application; if a conviction is found, the landlord must conduct an individualized assessment; and (3) applicant notification of approval or denial and right to dispute the denial.
The District of Columbia enacted the “Fair Criminal Record Screening for Housing Act”, requiring housing providers reviewing tenant applications to make a conditional offer before making a criminal history inquiry. Once inquiry is made, the law prohibits housing providers from considering arrests that did not result in conviction, or from considering convictions or pending accusations other than for listed offenses. The conditional offer may be withdrawn only by providing specific reasons in writing for why doing so achieves a substantial, legitimate, nondiscriminatory interest.
Portland has the “Fair Access In Renting” Ordinance that offers housing providers the option to continue to use their current screening criteria with the additional requirement of an individualized assessment prior to denying any applicant. A housing provider may instead choose to use the Low Barrier Criteria screening as set out in the Ordinance. By using the Low Barrier Criteria, the housing provider cannot reject an applicant for criminal history that includes:
- Arrest records (pending charges can still be considered)
- Diversion or deferred judgments
- Convictions that have been judicially dismissed, expunged, voided or invalidated
- Convictions for crimes no longer illegal in Oregon
- Juvenile convictions
- Misdemeanor convictions of any kind for which the dates of sentencing are older than three years from application date
- Felony convictions of any kind for which the dates sentencing is older than seven years from the date of the application
The Minneapolis “Renters Protection Ordinance” addresses criminal history screening by barring certain crime-related events from consideration by landlords, including arrests, diversions or deferrals, and expunged convictions. The ordinance applies inclusive screening criteria or individualized assessment for each applicant. In addition, misdemeanor look back periods are limited to three years and felony look back periods are limited to seven years. The ordinance states that landlords may look back ten years for a number of specific crimes such as assault, arson, robbery, murder, or sexual conduct to deny housing or may consider such crimes a permanent bar.
The above examples of Fair Chance Housing laws provide an overview of the regulations set out by the applicable ordinance. Housing providers are advised to conduct their own due diligence to determine the applicable laws governing their property location(s) to research appropriate statutes and ordinances for full text disclosure of legal requirements and restrictions on the use of criminal records in tenant screenings.