The U.S. Department of Housing and Urban Development recently released guidance on the application of Fair Housing standards to the use of criminal records in housing and real estate transactions.  The Fair Housing Act prohibits discrimination in housing-related activities (selling, renting, financing, etc.) on the basis of race, color, religion, sex, disability, familial status, or national origin.  But what happens when the basis for discriminating against a potential renter is the individual’s criminal history?

Many individuals with a criminal record encounter significant barriers to secure housing.  Having a criminal record is not itself a protected characteristic under the Fair Housing Act.  However, these barriers can violate the act if, without justification, the burden falls more often on renters of one race or national origin than others.  African Americans and Hispanics have higher incarceration, arrest, and conviction rates than the general population.  Thus, criminal records-based barriers to housing likely have a disproportionate impact on African Americans and Hispanics that are looking to buy a home.

A housing provider violates the Fair Housing Act when the provider’s policy has an unjustified discriminatory effect, even when the provider has no intent to discriminate.  In other words, where a policy or practice that restricts access to housing on the basis of criminal history has a disparate impact on individuals of a particular race, national origin, or other protected class, such policy or practice is unlawful under the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect.  Discriminatory effects liability is assessed under a three-step burden-shifting standard requiring a fact-specific analysis:

• Evaluating whether the Criminal History Policy Has a Discriminatory Effect;
• Evaluating whether the Challenged Policy or Practice is Necessary to Achieve a Substantial, Legitimate, Nondiscriminatory Interest
• Evaluating whether there is a Less Discriminatory Alternative

If you are involved in renting housing, selling housing, or financing housing, you should contact an attorney discuss whether your policies align with the new guidance provided by the U.S. Department of Housing and Urban Development.

Chad Stonebrook is an Associate at Lardiere McNair, LLC.  To read more about our firm, please visit www.lmcounsel.com.

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