A recent agency memorandum redefines how criminal background screening policies and practices may violate the Fair Housing Act.
The U.S. Department of Housing and Urban Development (HUD) has issued a memorandum to HUD-funded organizations that perform testing and investigate potential fair housing violations (also known as “FHIPs”) and HUD-funded government agencies that adjudicate fair housing complaints (also known as “FHAPs”) redefining how criminal background screening policies and practices may violate the Fair Housing Act. This memo also includes several housing provider recommendations that contradict common industry practices, potentially reducing housing providers’ ability to manage foreseeable risks and increasing housing providers’ liability exposure.
In its recommendations, HUD suggests that “private housing providers should consider not using criminal history to screen [applicants] for housing.” Citing recently released HUD research, they find that “[c]riminal history is not a good predictor of housing success.” The memo also notes that housing providers should evict due to criminal activity only as a last resort and conduct an individualized assessment to determine if the eviction is necessary, and they should not ban a resident’s invited guest from visiting because of the guest’s criminal activity.
The memo concludes that if housing providers choose to use criminal background screening policies or practices, they should consider a number of factors to avoid a potential violation of the Fair Housing Act, including avoiding the use of screening providers that utilize algorithms “that may contain racial or other prohibited bias in their design, have not been shown to reliably predict risk, may produce inaccurate information about the applicant, or make the decision for the housing provider.”
It is important to note that HUD did not issue a revised version of its 2016 Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions. Instead, the memo reflects how this administration interprets the guidance’s principles and how they are applied in enforcement actions that are under the agency’s purview, aligning with President Biden’s stated housing priorities. Earlier this year, the President declared April as Second Chance Month and HUD Secretary Marcia Fudge issued a department-wide directive to review HUD programs and reduce housing barriers for justice-involved individuals.
National Apartment Association (NAA) members should contact their legal counsel to determine how HUD’s actions may impact operations. NAA continues to work with HUD to advance the Administration’s priorities where we have alignment and to educate them on the critical importance of criminal record screening. We will continue to ensure the industry’s voice is recognized in housing policy conversations and work to reduce regulatory impacts on industry professionals.
For more information on resident screening policy, please contact, Ben Harrold, NAA’s Manager of Public Policy. Please direct questions about NAA’s federal regulatory advocacy to Nicole Upano, NAA’s AVP of Housing Policy & Regulatory Affairs.