HUD Says Screening Based on Arrest Record May Violate Fair Housing Act
June 20, 2016
Christopher J. Charles, Esq.
As many as 100 million U.S. adults – or nearly one-third of the population – have a criminal record1. The U.S. Department of Housing and Urban Development (HUD) recently issued a warning and compelling statistics that reveal that certain protected classes are being disproportionately impacted by their criminal history.
The 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. 42 U.S.C. §3601 et seq.
Although criminals are not a protected class under the Fair Housing Act, criminal background-based restrictions may violate the Act if, without justification, the restrictions negatively impact one race more than others (known as “discriminatory effects liability”). In addition, where two or more applicants have similar criminal backgrounds, the Act is violated if the housing provider prefers one race over another (known as “disparate treatment liability”).
HUD warns that a housing provider violates the Fair Housing Act if the provider’s policy or practice has an unjustified discriminatory effect, even if the provider had no intent to discriminate2. This is noteworthy because under this standard, an ostensibly neutral policy or practice that has a discriminatory effect violates the Act if it is not supported by a legally sufficient justification. And according to the statistics quoted by HUD, housing decisions based on criminal records conclusively result in a discriminatory effect on certain races of people.
HUD does, however, mention the following safe harbor: the policy or practice may be lawful notwithstanding its discriminatory effect as long as the decision is supported by a legally sufficient justification. For example, safety. Some landlords and property managers site the need of protecting other residents and their property as legal grounds for denying applicants based on their criminal background. For sure, ensuring resident safety and protecting property are among the fundamental responsibilities of a housing provider, and courts may consider such interests to be both substantial and legitimate, assuming they are the actual reasons for the policy or practice.
But a word to the wise: denial of housing opportunities based on past history of criminal arrests (without proof of conviction) will not likely satisfy this test. Indeed, according to the U.S. Supreme Court, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct. An arrest shows nothing more than someone probably suspected the person apprehended of an offense.” Schware v. Bd of Bar Examiners, 353 U.S. 232, 241 (1957); see also United States v. Berry, 553 F.3d 273, 282 (3d Cir. 2009) (“[A] bare arrest record – without more – does not justify an assumption that a defendant has committed other crimes and it therefore cannot support increasing his/her sentence in the absence of adequate proof of criminal activity.”); United States v. Zapete-Garcia, 447 F.3d 57, 60 (1st Cir. 2006) (“[A] mere arrest, especially a lone arrest, is not evidence that the person arrested actually committed any criminal conduct.”). Thus, a housing provider who denies housing to persons on the basis of arrests alone (without proof of conviction) cannot prove that the exclusion actually assists in protecting resident safety and/or property.
On the other hand, denial of a housing-related opportunity based a criminal conviction is likely okay. But the housing provider must still prove that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. A blanket ban on anyone with a conviction record – no matter when the conviction occurred, regardless of the crime, or what the person has done since then – will be unlawful.
According to HUD, a blanket ban against anyone with a criminal record results in discrimination against certain races of people because of the disparities in the U.S. criminal justice system. As a result, the housing policy should differentiate between various crimes and the date of the convictions. For example:  convicted sex offenders need not apply (regardless of the date of conviction);  convicted felons guilty of violent crimes, kidnapping, terrorism, drug manufacturing, need not apply (regardless of date of conviction);  conviction of any drug-related offenses involving possession only, or alcohol-related offenses where no one was injured or killed, must be at least 2 years old.
To summarize, the Fair Housing Act does not prohibit housing providers from considering an applicant’s criminal background when making housing-related decision. But according to HUD’s recent warning, the Act does prohibit housing-related decisions based solely on the applicant’s criminal history. And the Act may prohibit housing-related decisions based solely on the applicant’s conviction record without evidence of a legally sufficiency justification such as safety concerns. As a result, housing providers should immediately implement thoughtful application policies and practices that consider the type of crime, evidence of a conviction, the date of the conviction, and the person’s behavior since the conviction.
If you or someone you know has questions regarding multi-family housing, landlord tenant issues, or other real estate matter, please call or email today.
1 Bureau of Justice Statistics, U.S. Dep’t of Justice, Survey of State Criminal History Information Systems, 2012, 3 (Jan. 2014).
2 Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions, April 4, 2016.
Christopher J. Charles is the founder and Managing Partner of Provident Law, PLLC. He is a State Bar Certified Real Estate Specialist and a former “Broker Hotline Attorney” for the Arizona Association of REALTORS® (the “AAR”). He is also an Arbitrator and Mediator for the AAR regarding real estate disputes; and he serves on the State Bar of Arizona’s Civil Jury Instructions Committee where he helped draft the Agency Instructions and the Residential Landlord/Tenant Eviction Jury Instructions.
Christopher is a licensed real estate continuing education instructor and he teaches at the Arizona School of Real Estate & Business. He can be reached at email@example.com or at 480-388-3348.