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NAR legal guidance on new HUD rule

Julián Castro, the secretary of housing and urban development, is revising how his agency interprets the Fair Housing Act as it applies to people with criminal records.

Private landlords who have blanket bans on renting to people with criminal records are in violation of the Fair Housing Act and can be sued and face penalties for discrimination, the federal Department of Housing and Urban Development said.

Julián Castro, the HUD secretary, is expected on Monday to announce guidance that details his agency’s interpretation of how the fair housing law applies to policies that exclude people with criminal records, a group that is not explicitly protected by the act but falls under it in certain circumstances. Federal officials said landlords must distinguish between arrests and convictions and cannot use an arrest to ban applicants. In the case of applicants with convictions, property owners must prove that the exclusion is justified and consider factors like the nature and severity of the crime in assessing prospective tenants before excluding someone.

Mr. Castro said housing bans against former offenders were common.

“Right now, many housing providers use the fact of a conviction, any conviction, regardless of what it was for or how long ago it happened, to indefinitely bar folks from housing opportunities,” Mr. Castro said in a statement. “Many people who are coming back to neighborhoods are only looking for a fair chance to be productive members, but blanket policies like this unfairly deny them that chance.”

The new federal housing guidance applies a legal standard that was upheld by the United States Supreme Court last year that allows plaintiffs to challenge housing practices that have a discriminatory effect without having to show discriminatory intent. The ruling allows plaintiffs to show instead that the practices both have a “disparate impact” on racial groups and are not justified. Blacks and Latinos are arrested, convicted and imprisoned in disproportionate numbers, and civil rights groups say they face equally disparate discrimination in finding housing.

Federal housing officials said the guidance was meant to emphasize to landlords that blanket bans are illegal, as well as to inform housing applicants of their rights. Housing officials said they can investigate violations and bring discrimination charges against landlords that could result in civil penalties for them, and damages for a person denied housing.

Lawyers who represent former prisoners said they expected HUD’s stance to lead landlords to revise their screening policies to avoid litigation. The guidance, which is similar to an instruction federal officials already have for public and subsidized housing, could also lead to more and stronger lawsuits against those who continue to deny housing based on criminal history.

“The agency in charge of interpreting the Fair Housing Act agrees with us, and that will have a lot of weight,” said John P. Relman, a lawyer and specialist in housing discrimination cases who is representing the social services group Fortune Society in a federal lawsuit against a rental complex inNew York City over screening policies.

Concern over restrictions that hinder former prisoners’ efforts to find jobs and homes has taken on urgency in recent years, as pressure has built to ease the high rates of incarceration that followed decades of tough sentencing for drug offenses, which took a harsh toll on minority communities.

Research shows that obtaining housing reduces recidivism. But groups like Fortune Society said they have encountered landlords who ban tenants with criminal histories without individual reviews or any regard to evidence of rehabilitation or whether the person poses a threat to safety.

Some landlord groups said owners had the right to exercise their own judgment given the liability they face from other tenants if the person commits another crime. Some have partial bans and screen only for certain crimes, such as sex offenses or arson, or allow those who were convicted of misdemeanors but not felonies.

(Landlords can continue to exclude those convicted of manufacturing or distributing drugs, the only crimes that are exempted under the Fair Housing Act.)

In their response to the Fortune Society lawsuit, Sandcastle Towers Housing Development Fund, the owner of a rental complex in Far Rockaway, Queens, with more than 900 units, and other co-defendants argued that the use of criminal records “serves valid business and security functions of protecting tenants and the property from former convicted criminals.” (The lawsuit, filed in 2014, is pending in United States District Court for the Eastern District in Brooklyn.)

“A person who has already demonstrated a disregard for the law, upon penalty of imprisonment, is at greater risk for repeating that conduct, is a greater security risk and is a greater risk of defaulting in making rental payments or in complying with leases,” the defendants said, adding that “convicted criminals lose some of their rights and privileges as a result of their convictions.”

But federal housing officials said that landlords would have to take a more individualized approach to avoid violating the Fair Housing Act, which prohibits discrimination in the sale, rental or financing of housing based on race, national origin and other protected characteristics. Even those with a partial ban must prove that their policy does not discriminate, by showing that it “accurately distinguishes” between criminal conduct that poses a risk to safety and conduct that does not.

“Policies that exclude persons based on criminal history must be tailored to serve the housing provider’s substantial, legitimate, nondiscriminatory interest and take into consideration such factors as the type of the crime and the length of the time since conviction,” the guidance reads.

Some landlord groups said they already advised case-by-case reviews of potential renters.

“We always urge owners not to use a blanket policy and to look at the tenant’s ability to pay rent and be a good tenant,” said Debra Carlton, a spokeswoman with the California Apartment Association, which represents 50,000 rental property owners.

Officials with the Real Estate Board of New York said they would issue their own guidance to members on HUD’s interpretation.

“It would require everyone to revise whatever policies they have,” said Neil Garfinkel, a lawyer who advises brokers for the trade association. “I always advise a holistic approach and to look at the applicant as a whole.”

 

http://www.nytimes.com/2016/04/04/nyregion/federal-housing-officials-warn-against-blanket-bans-of-ex

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