It's the Law

REVIEW YOUR SCREENING POLICY

HUD confirms its concerns about criminal history screening.

By HOWARD BOOKSTAFF, Hoover Slovacek LLP, HAA General Counsel

ON MARCH 31, 2022, President Biden declared April as Second Chance Month, emphasizing the importance of helping persons who have had criminal involvement reenter society, reunite with their families, and find stable and safe homes. On April 12, 2022, the Secretary of HUD instituted an agency-wide effort to review HUD programs to ensure HUD and others are as inclusive as possible of individuals with criminal involvement.

On June 10, 2022, HUD published a memorandum to highlight the importance of applying principles of HUD’s 2016 guidance on the application of the Fair Housing Act standards to the use of criminal records by housing providers.

HUD’s memorandum provides tips to HUD agencies conducting investigations relating to criminal background screening and sets out some best practices the agencies can suggest to housing providers who may be concerned about potential liability relating to the use of criminal background screening information. Although you may not agree with all HUD has stated, we can learn from how HUD applies the Fair Housing Act to criminal history screening policies.

Housing disparities in the criminal justice system

The memorandum and the previous HUD guidance focuses on the disparities in the criminal justice system as a basis for relating potential fair housing claims to criminal history screening.

HUD states: • Disparities throughout the Unites States criminal justice system are well established and persistent. • Blacks represent roughly 13% of the total US population that account for roughly 27% of all arrests. • In 2019, the incarceration rate of Black males was 5.7 times that of White non-Hispanic males, while the incarceration of Black females was 1.7 times the rate of White nonHispanic females. • Updated data shows that individuals with disabilities are also disproportionally impacted by the criminal justice system. • Housing providers frequently employ policies or practices that exclude individuals with criminal involvement from housing, which HUD states should raise red flags for investigators. • Screening companies that provide background check reports are often inaccurate, incomplete or have no relationship to whether someone will be a good tenant. • Some housing providers inform potential residents that they do not rent to persons with “criminal records,” deterring those with any criminal involvement from applying.

Three theories of liability

HUD states that using criminal history to screen, deny lease renewal, evict or otherwise exclude an individual from housing may be illegal under the Fair Housing Act under the theories of discriminatory intent, discriminatory effects and refusal to make reasonable accommodations.

Discriminatory intent

HUD advises its agencies that claims that a housing provider has used criminal records or other criminal history information to discriminate intentionally in violation of the Act should be investigated in a manner similar to other allegations of intentional discrimination. Criminal records or other criminal history information may be a pretext for unequal treatment of individuals because of race, color, national origin, disability or another protected characteristic.

Discriminatory effects

HUD states housing provider’s criminal background screening policy could create an unjustified discriminatory effect in violation of the Act and claims should be analyzed under a three step discriminatory effects analysis.

1. Step 1 (a statistical showing of discrimination)

Investigators must gather evidence regarding whether the challenged criminal history policy or practice actually or predicably results in a disparate impact on a protected class. This involves identifying: (i) a housing provider’s relevant practices or policies and (ii) statistics which show whether the identified policies actually or predictably result in a disparate impact on a protected class.

2. Step 2 (potential defenses)

HUD states that investigators should anticipate common defenses and independently determine whether there is any evidence that supports or refutes a potential defense. Potential defenses include a claim that the screening policy is necessary to achieve a substantial, legitimate, non-discriminatory interest such as addressing safety or property concerns. However, policies and practices that fail to consider the nature, severity and recency of an individual’s conduct are unlikely to be necessary to serve a substantial, legitimate, non-discriminatory interest.

3. Step 3 (less discriminatory alternative)

HUD states that if the policy is necessary to achieve a substantial, legitimate, non-discriminatory interest, investigators should gather information and analyze whether the same interest could be served by another practice that has a less discriminatory effect. If so, the housing provider’s defense fails.

Although the identification of a less discriminatory alternative will depend on the particulars of the criminal history or policy practice being challenged, individualized assessment of relevant mitigating information beyond that contained in an individual’s criminal records is likely to have a less discriminatory effect than categorical exclusions that do not take such additional information into account. 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 or after the conviction or conduct; and • Evidence of rehabilitation efforts.

Reasonable accommodation

HUD states that some complaints relating to criminal involvement may allege that a housing provider discriminated because of disability by failing to make an exception or adjustment to a criminal background screening policy or practice when such exception or adjustment may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling.

Recommended tips

HUD gives several tips that agencies should recommend to housing providers, including the following: • Housing providers should consider not using criminal history to screen residents for housing. HUD states that criminal history is not a good predictor of housing success. • Housing providers should evict for criminal activity only as a last resort. • Housing providers should not ban a resident’s invited guest from visiting the resident based on the guest’s criminal involvement. • If housing providers choose to use criminal background screening policies or practices, they should consider taking the following steps to avoid potential violation of the Fair Housing Act: • Before making an adverse decision because of an applicant’s or resident’s criminal involvement, provide the applicant or resident with the criminal record, indicate which specific part of the record may form the basis of an adverse decision, and give the applicant or resident the opportunity to correct inaccurate information or explain extenuating circumstances related to that record. • Consider delaying the consideration of criminal history until after an individual’s financial and other qualifications are verified and a conditional offer is made. • Conduct an individualized assessment that considers relevant mitigating information beyond that contained in the individual’s criminal record.

Conclusion

All housing providers should review their criminal history screening policy to determine the extent to which the HUD guidance in 2016 and the HUD memorandum in 2022 could be used to challenge criminal history screening policy. There may be times when a housing provider will need to balance the risks associated with Fair Housing liability versus premises liability.

Whether and how you want to revise your criminal history screening criteria to reflect the suggestions provided by HUD is up to you. However, the HUD guidance and memorandum give housing providers an in-depth view of how HUD will evaluate claims of discrimination based upon criminal history screening criteria.

Want more Howard? Go to http://issuu.com/haa_abode.