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You can’t – you just can’t – make this stuff up. Last Monday, April 4, the U.S. Department of Housing and Urban Development (HUD) released a 10-page memo on the “Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions.” The gist of the document was this: Landlords and property managers who adopt a blanket policy of refusing to rent to applicants with criminal records are in violation of the Fair Housing Act and can be sued and face penalties for discrimination.
The HUD position arises out of the doctrine of disparate impact which was recently upheld by the U.S. Supreme Court. The heart of the doctrine is this: “A housing provider violates the Fair Housing Act when the provider’s policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate.” If the implementation of some (apparently neutral) policy has a disproportionate negative effect on minorities, then that policy may be considered discriminatory.

Here, the issue arises because “African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population. Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers. 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 or other housing market participants of one race or national origin over another…”

The HUD memo notes that “…African Americans were incarcerated at a rate nearly three times their proportion of the general population. Hispanics were similarly incarcerated at a rate disproportionate to their share of the general population…” Thus, a policy making housing unattainable for those with criminal records would have a disproportionate (disparate) impact on African Americans and Hispanics than it would for Whites.

In the next step of the HUD analysis, “the burden shifts to the housing provider to prove that the challenged policy or practice is justified…” “A housing provider must … be able to prove through reliable evidence that its policy or practice … actually assists in protecting resident safety or their property.”

Hence a policy that excluded applicants simply on the basis of arrests would not pass muster. HUD argues, “… a policy or practice of excluding individuals because of one or more prior arrests (without any convictions) cannot satisfy its burden…” This is because “…the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property…”

So, your tenant-applicant has prior arrests — but no convictions — for arson, aggravated assault, and armed robbery. Just remember the HUD opinion. Your unjustified denial of such an applicant — even if not a minority — would probably be found discriminatory under the disparate impact analysis.

What about convictions, then? Surely, it’s ok to have a policy of refusing to rent to persons who have been convicted of crimes.

Well, no. For one thing, there are crimes and there are crimes. “Housing providers that apply a policy or practice that excludes persons with prior convictions must still be able to prove that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. A housing provider that imposes a blanket prohibition on any person with any conviction record… will be unable to meet this burden.”

“A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a ‘substantial, legitimate, nondiscriminatory interest.”

HUD advises that landlords and property managers should be aware of “…criminological research showing that, over time, the likelihood that a person with a prior criminal record will engage in additional criminal conduct decreases until it approximates the likelihood that a person with no criminal history will commit an offense.” Hence the advice that “individualized assessment of relevant mitigating information beyond that contained in an individual’s criminal record is likely to have a less discriminatory effect than categorical exclusions…” “Relevant individualized evidence might include: the facts or circumstances surrounding the criminal conduct; the age of the individual at the time of the conduct; evidence that the individual has maintained a good tenant history before and/or after the conviction or conduct; and evidence of rehabilitation efforts.”

So it comes to this: Don’t have a blanket policy (which used to be seen as a way of preventing discrimination); but, rather, make an individualized, necessarily subjective assessment of the tenant-applicant based on your non-professional, personal reading of his past and likely future behavior. Good luck with that.

Now, I don’t want to be accused of treating HUD unfairly here, or of giving the impression that its recent memo suggests a soft-on-criminals approach. So, let us acknowledge that the memo does take a strong law-and-order stance when it advises that the Fair Housing Act “does not prohibit conduct against a person because such person has been convicted … of the illegal manufacture or distribution of a controlled substance…” [my emphasis]

So you can refuse some people because of their criminal past. There, don’t you feel better?

Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way. His email address is