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Criminal Background Checks Under Scrutiny

Criminal Background Checks

Apartment Industry Advocates,

Nearly 50 years ago, President Lyndon Johnson signed into law the Civil Rights Act of 1968. Title VIII of the Act contains what we commonly refer to as the Fair Housing Act. This law, along with amendments passed in 1988 and 1990, protects individuals from housing discrimination based on race, color, religion, sex, national origin, disability or familial status. As a result of this legislation, industry training and education, the federal government’s support and housing professionals’ hard work, systematic and intentional discrimination in housing has been all but eliminated. 

Federal fair housing enforcement today is focused on the much more nuanced area of law involving unintentional discrimination or disparate impact liability. The 2015 Supreme Court decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. confirmed this concept as a legitimate extension of fair housing and paved the way for expanded investigative activity. One of the highest priority areas for these investigations is resident screening, especially criminal background checks. Events this April illustrate exactly how fine a point has been placed on this aspect of the rental housing application process.

The Lawyers Committee for Civil Rights Under Law, according to an April 4 news release, has “…opened a nationwide inquiry into owners who impose blanket bans upon applicants who have had contact with the criminal justice system.” Thirteen housing providers across 12 states have been targeted in particular by the Committee in this “phase 1” action for allegedly using screening policies that bar anyone with a criminal history from obtaining housing. The Committee is a nonpartisan, nonprofit entity formed in 1963 at the request of President John F. Kennedy.

The second and perhaps more significant event in April related to fair housing and resident screening is new guidance issued by HUD’s Office of General Counsel entitled, Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions. This guidance places specific parameters around how housing providers can utilize criminal histories in their resident screening processes. NAA, along with our partners at the National Multifamily Housing Council, will issue explanatory material in the coming weeks to help owners and operators navigate the guidance. 

In general, the HUD guidance seeks to end blanket exclusions of prospective residents based on criminal history in favor of a more individualized approach. Specifically, it prohibits the use of arrest records alone to deny residency and denials based on convictions must consider the nature and severity of the incident. Evaluation of resident screening policies will follow the “burden-shifting” test HUD created in its 2013 Final Rule on the “Implementation of the Fair Housing Act’s Discriminatory Effects Standard.

Not surprisingly, the HUD guidance raises a number of questions about how apartment owners and operators will be able to maintain the critical balance between meeting the goals of fair housing and adequately protecting their residents, employees and property from criminal activity. This is especially complex in light of state and local laws which in some cases create strong disincentives for owners to rent to those with criminal histories. Moreover, while the guidance establish general parameters, it does is not specific about which policies will pass muster and which will not. This leaves owners and operators in the position of trying to thread a very fine needle to stay on the right side of fair housing law.

Changes to long-held understanding of how an apartment owner and operator should design their processes to comply with fair housing rules is not isolated to resident screening. Preconceived ideas are being challenged in the areas of familial status, occupancy standards, source of income and many others. NAA, our affiliated associations and our members are all grappling with these changes and trying to draw a clear picture of this new world. I suspect it will be some time before that clarity emerges.

For more information on HUD’s most recent guidance as well as resources in other areas of fair housing, go to the Government Affairs.

Thanks for reading. Talk with you next month.