Scott M Drucker, Esq, General Counsel for the Arizona Association of REALTORS®
Throughout the United States, individuals with criminal records, regardless of whether they pose little or no threat, face significant barriers when seeking to buy or rent a home. Amazingly, between 70 million and 100 million Americans, or as many as one in three American adults, have some type of criminal record. And while many have been convicted of only minor offenses, having a criminal record carries a lifetime of consequences. This often includes an inability to secure housing.
The Federal Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status or national origin. Ex-convicts and individuals with a criminal history are not explicitly identified by the Act as a protected class. Nonetheless, the United States Department of Housing and Urban Development (HUD) opined in April 2016 that housing providers rejecting tenants or buyers based on their criminal records may violate the Fair Housing Act. At its core, the issue is whether exclusionary polices based on criminal background checks have an unfair or disparate impact on certain racial minorities who are protected under federal laws governing housing.
In April 2016, U.S. Department of Housing and Urban Development (“HUD issued an opinion regarding the use of criminal background checks in rental properties. This will change the standards that landlords may apply to applicants. It is similar to an opinion from the Equal Employment Opportunity Commission (“EEOC”) regarding the use of criminal background checks in employment. While a lot about the HUD Opinion remains unclear, landlords must take steps immediately to avoid violating fair housing laws. We have drafted this analysis to provide bullet point notes from the Opinion, as well as a more comprehensive analysis.
As HUD notes, “A housing provider must, however, be able to prove through reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property.” To meet this burden, housing providers must consider factors like the nature and severity of the crime, as well as the length of time since the conviction. By conducting this analysis, housing providers can establish that their policy “accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property, and criminal conduct that does not.”
At the heart of HUD’s opinion lies the doctrine of disparate impact, sometime referred to as unintentional discrimination. Pursuant to this doctrine, a policy may be considered discriminatory if it has a disproportionate adverse impact against a protected class. For example, a policy that applies to everyone may still prove discriminatory if it tends to affect a protected group or minority more than others.
As applied to its position on criminal history-based restrictions, HUD notes that across the United States, certain minorities are arrested, convicted and incarcerated at rates “disproportionate to their share of the general population.” As a result, restricting access to housing on the basis of criminal history is likely to have a disproportionate adverse impact on