Resident Screening: Policy Issue
Criminal Screening
Overview
A criminal background check is one, yet important, part of the overall resident screening process. Criminal screening is essential for owners and operators of rental housing to manage risks to their businesses. Citing research that ex-offenders who do not find stable housing in their community are more likely to recidivate, federal, state, and local policymakers are enacting measures that prevent providers from evaluating an individual's pending charges and criminal convictions. While well intentioned, these measures make it more difficult for applicants without criminal histories to find housing. Since more weight must be put on other factors, such as financial history.
NAA Position
NAA opposes all efforts to prohibit apartment owners and operators from evaluating a prospective resident's criminal history as part of the overall screening process.
As an Owner or Operator, How Does this Affect My Business?
Proposals that restrict a housing provider's ability to conduct criminal background checks inhibit their ability to manage risk to their properties and businesses. Given that providers lack clear guidance on how to stay compliant with the law, these restrictions also leave owners and operators vulnerable to potential legal liability.
Eviction/Credit Screening
Overview
Another important screening tool for housing providers is eviction screening. In recent years, policymakers have considered legislation that would seal eviction records beyond a certain timeframe or otherwise restrict owners from evaluating court filings. Screening for evictions is a necessary tool for owners and operators to mitigate risk and determine a potential resident’s ability to comply with the terms of the lease. Applications that lack eviction history will also shift more weight onto other categories like financial history, which could negatively impact low-income renters.
NAA Position
NAA opposes all efforts to seal records or limit the ability of property owners and managers to screen applications for evictions. NAA supports the inclusion of rental payment data in credit scoring models. Including rental payment data would allow renters who make timely payments to build credit and access more housing opportunities.
As an Owner or Operator, How Does this Affect My Business?
Any limitation on the ability to review pending or previous evictions would be a significant detriment to the owners’ review process. A full and accurate record gives owners and operators the most comprehensive picture of the applicant to determine their ability to pay rent. Additionally, owners and operators must fulfill financial obligations, including maintenance, capital improvements, mortgage payments, utilities, and more, even if a resident fails to pay rent or fulfill other responsibilities under a lease, potentially increasing their financial burden if eviction screenings are not permitted.
Immigration Status
Overview
Immigration is a subject that has generated significant debate at the federal level. As efforts to regulate immigration in Congress continue, state and local policymakers are weighing in on the issue on a more frequent basis. While the issue is being used as a political football at all levels of government, there is one consistent outcome—property owners and operators are required to comply with a patchwork of onerous requirements and face possible legal liability under fair housing laws when it comes to screening the immigration status of residents.
NAA Position
NAA opposes efforts to implement laws that would limit an apartment owner or operator’s ability to properly screen residents, or measures that would require them to enforce federal immigration laws. NAA also believes that housing providers should have access to immigration information when assessing potential residents. Such information is important for business reasons, for example, making sure a lease’s term does not conflict with the length of an applicant’s visa.
As an Owner or Operator, How Does this Affect My Business?
Apartment owners and operators are in the business of housing individuals in the community and are not equipped to police or determine the validity of residents’ immigration paperwork. There are policies that penalize owners with suspension or possible revocation of an apartment firm’s business license if the owner is responsible for leasing to an immigrant with invalid paperwork. This has severe consequences for a local community and its renters. Such policies would effectively reduce the supply of available housing in a community.
Source of Income
Overview
Access to housing affordability and tenant displacement concerns continue to drive policy at the state and local level. To this end, policymakers are considering proposals to make "source of income" a protected characteristic under state and local fair housing laws. Such laws are intended primarily to prohibit discrimination against individuals who receive housing subsidies and essentially mandate that housing providers participate in the Section 8 Housing Choice Voucher Program.
NAA Position
NAA supports voluntary participation in the Section 8 Housing Choice Voucher Program and opposes any efforts to mandate participation. NAA strongly supports improvements to the Section 8 program which reduce regulatory burdens, increase funding and encourage increased participation (see the difference between a standard leasing process and a housing voucher leasing process).
As an Owner or Operator, How Does this Affect My Business?
The U.S. Department of Housing and Urban Development (HUD) and local Public Housing Authorities (PHAs) who administer the program require participating property owners and operators to adhere to additional regulatory requirements, which are otherwise not imposed in a standard apartment leasing transaction.
These requirements may include, but are not limited to, the following:
- Prescribed tenancy approval process.
- Approval of owner's preferred lease by the PHA.
- Execution of a "tenancy addendum" to be attached to every voucher holder's lease.
- In addition to the owner and resident's agreement, owners must agree to enter into a Housing Assistance Payments (HAP) contract with the PHA and to enforce lease terms and comply with administrative responsibilities contained therein.
- Rents subject to "reasonableness" requirements, possible delays and inconsistencies in disbursement of subsidies, and even arbitrary withholding of payments.
- Limits on rent increases which are subject to approval by the PHA and often do not keep pace with local market rates.
- Inspections, delays and duplicative requirements.
- Lack of support from program administrators to assist owners and operators in addressing resident noncompliance concerns.
- Significant challenges stemming from inconsistency in service and interactions with program administrators.
These challenges create uncertainty in rental housing operations and often undermine the ability of owners to properly manage risk, leading to negative outcomes for owners and residents alike.