Justice Department will enforce limits on landlord background checks

October 22, 2016 CCRC Staff

Earlier this year the U.S. Department of Housing and Urban Development (HUD) issued new guidance asserting that housing policies that exclude people with criminal records may violate the non-discrimination provisions of the federal Fair Housing Act (FHA) if they fail to consider the nature, severity, and recency of criminal conduct and if they are not narrowly tailored to protect residents or property. The Justice Department has taken the first step toward judicial enforcement of this guidance.

On October 18 the Department’s Civil Rights Division filed a Statement of Interest in Fortune Society v. Sandcastle Towers Housing Development, a federal civil rights suit brought in the Eastern District of New York against a Brooklyn provider of low-income housing, claiming that it has a blanket policy of refusing to rent to individuals convicted of any non-traffic crime. The Statement urges the court to decide the case based on the legal framework set forth in the HUD guidance, which employs a three-step analysis to determine whether criminal history-based housing exclusion policies amount to illegal racial discrimination prohibited by the FHA.

Though the Statement does not address the factual dispute at issue in the case, it adopts HUD’s position that blanket bans based on criminal history are likely to violate the law in failing to require an individualized assessment of applicants, because African-American applicants are more likely to have criminal histories than their white counterparts.

When the HUD guidance was issued, we predicted that it would effectively end the use of criminal background checks to automatically exclude potential renters, and greatly expand housing opportunities for all people with criminal histories, regardless of their race. The Justice Department’s strong endorsement of the guidance is a hopeful step in that direction.

We reprint the Department’s press release below:

The Justice Department filed a statement of interest today arguing that the Fair Housing Act (FHA) requires that landlords who consider criminal records in evaluating prospective tenants do not use overly broad generalizations that disproportionately disqualify people based on a legally protected characteristic, such as race or national origin.

The statement of interest was filed in the U.S. District Court for the Eastern District of New York in Fortune Society Inc. v. Sandcastle Towers Housing Development Fund Corp. et al. The case was brought by an organization that helps formerly incarcerated individuals find housing challenging the practices of an affordable rental apartment complex with 917 units in Far Rockaway, Queens.

In the statement of interest, the department aims to assist the court in evaluating whether a housing provider’s policy that considers criminal records in an application process produces unlawful discriminatory effects in violation of the FHA. Although the FHA does not forbid housing providers from considering applicants’ criminal records, the department states in its filing that “categorical prohibitions that do not consider when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then run a substantial risk of having a disparate impact based on race or national origin.”

The brief explains that when a housing provider has a criminal record check policy with a disparate impact, the housing provider must “prove with evidence – and not just by invoking generalized concerns about safety – that the ban is necessary.” Even then, the policy will still violate the FHA if there is a less discriminatory alternative.

“This filing demonstrates the Justice Department’s steadfast commitment to removing discriminatory barriers that prevent formerly incarcerated individuals from restarting their lives,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Women and men who served their time and paid their debt to society need a place to live, yet unlawful housing policies can too often prevent successful reentry to their communities. While not all criminal records policies adopted by landlords violate the Fair Housing Act, we will take action when they do.”

“Landlords’ categorical refusals to rent to individuals who have served their debts to society can illegally discriminate against those individuals based on their race or national origin,” said U.S. Attorney Robert L. Capers of the Eastern District of New York. “This office will continue to work to fight such discrimination.”

In this case, the plaintiff argues that the Sandcastle complex had a policy of refusing to rent to individuals with prior convictions for felonies or misdemeanors other than traffic offenses. The plaintiff argues that this policy has an unjustified disparate impact against prospective African-American and Hispanic tenants, in violation of the FHA. In the statement of interest, the department does not take a position on the factual accuracy of the plaintiff’s arguments, but instead addresses the appropriate legal framework for analyzing its claim. The legal framework set forth in the filing is consistent with the guidance released by the U.S. Department of Housing and Urban Development in April 2016 concerning how the FHA applies to the use of criminal records by providers or operators of housing and real-estate related transactions.

Fortune Society Inc. v. Sandcastle Towers Housing Development Fund Corp. et al. was filed in the Eastern District of New York in 2014. After the completion of pre-trial discovery, both parties have asked the court to enter judgment in their favor before trial. Those requests, filed in September 2016, are now pending with the court.

The Justice Department’s Statement of Interest is available here. More on the HUD guidance and its effect here.

The Shriver Center will host a free webinar on the HUD guidance featuring officials from the Justice Department and HUD on October 26. More information is available here.