Conducting Criminal Background Checks: Further FAQs & Follow-up

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This is the first of four articles on the legal and practical considerations for housing providers when developing a criminal history screening policy. This is a BIG fair housing issue and one that produces a lot of phone calls to the MHCO Office.

It is very important for all housing providers to review and consider whether your current criminal screening policy should be revised to avoid a successful challenge in a fair housing case based on its disparate impact on minority applicants. "There are fair housing advocacy agencies that are actively searching for companies with simplistic and generalized criminal history policies to challenge. We don't want your companies to be those test cases," she said.

In this series of articles, the Coach presents highlights, along with FAQs about complying with fair housing law when screening applicants based on criminal history.


The Fair Housing Act (FHA) bans housing discrimination based on race, color, religion, sex, national origin, disability, and familial status.

There are two ways to prove a fair housing violation, Williams explained. The first and most common is to show intentional discrimination-what's known as disparate treatment. In these cases, the issue is whether people in similar situations were treated differently, and if so, whether that different treatment was due to that person's protected category.

The second is what's known as disparate impact. It's used to challenge a housing policy that on its face is neutral-that is, it doesn'tappear to favor one protected category over another-but when the policy is applied, it has a significantly negative impact or effect on one protected category. These cases are always based on statistical analyses using either national or local data, Williams said. It's this second category that was the focus of HUD's new guidelines on criminal background checks.

To illustrate why the use of criminal screening policies have been causing such concern, Williams cited a recent study showing racial disparities in the criminal justice system. According to the study, one in every three black males born today can expect to go to prison at some point in their lives; this compares with one in every six Latino males, and one in every 17 white males. "Racial minorities are more likely than white Americans to be arrested," according to the report. "Once arrested, they are more likely to be convicted; and once convicted, they are more likely to face stiff sentences." The conclusions of this and other similar studies have resulted in a bipartisan effort to improve the criminal justice system to remove this apparent racial bias.

Overview: HUD General Counsel Announcement

In a nutshell, HUD's new guidelines explain how the agency will evaluate fair housing claims based on the disparate impact that criminal background screening policies may have on racial and ethnic minorities. Williams explained the three-step process:

Step 1: The plaintiff must prove that a community's neutral criminal history screening process has a significant disparate impact on African Americans and Hispanics. The plaintiff could be an individual, an advocacy agency, a testing agency, or an enforcement agency like HUD or the Justice Department. To satisfy this step, the plaintiff needs statistics showing that African Americans are arrested and convicted of crimes at a significantly higher rate than whites using local or national statistics. In most cases, it's not difficult to provide these statistics. If the evidence ends, the plaintiff wins.

Step 2: Then it's up to the housing provider to identify a substantial, legitimate, nondiscriminatory business interest accomplished by the policy. One obvious reason is to improve safety and security, but HUD warns that bald assertions based on generalizations and stereotypes aren'tenough. It takes more than a personal preference to screen out all ex-offenders to justify a criminal screening policy-you'll need some statistical support for your policy. If the evidence ends, the housing provider wins.

Step 3: In the final step, the plaintiff gets another chance to win the case with proof that a different policy would meet the interests of the housing provider but do so with a much less discriminatory impact. This is where the content of your criminal history screening policy can be challenged unless the policy is narrowly tailored to meet the ultimate purpose of the policy-to protect safety, for example-without denying housing to many applicants with a criminal record who may not actually pose a risk to your property.

The bottom line: To defend your policy, you'll need to show that it accurately distinguishes between criminal conduct that indicates a demonstrable risk to residents' safety-and conduct that does not. For that, you'll need to consider statistics about recidivism-that is, the likelihood that a person convicted of a particular crime in the past is likely to be re-arrested for another crime in the future.

As an example, Williams cited a study showing that the likelihood of re-arrest following release from prison goes down over time. Although nearly half of the subjects were rearrested, it was much more likely to happen during the first few years after release. By the end of the eight-year study, arrest incidents dropped down to the point where the percentage of those re-arrested was close to anyone else-including those without a past criminal record.

Another example was a report on the kinds of crimes most often committed after release from prison. In that study, the most common felony resulting in a re-arrest was assault-at 24 percent-and the least were rape and homicide, at less than 2 percent each.

You don't have to become a criminal justice expert as long as you understand that disparate impact cases rise and fall on statistics, Williams said. These and many more studies are available to plaintiffs when challenging criminal history policies, so you should take them into account when reviewing your own policies.


Statutory Exemptions from Fair Housing Liability

When evaluating your criminal background screening criteria, consider the "statutory exemptions" from fair housing liability:

Manufacturing and distribution of drugs: Applicants with criminal convictions related to manufacturing and distribution of controlled substances as defined in Section 102 of the Controlled Substances Act can be excluded. Keep in mind, however, that a large percentage (30 percent of the entire U.S. prison population, according to FBI reports) has some type of criminal history based on drug offenses, so you should be careful when it comes to convictions for less serious offenses, such as drug possession.

Sex offender registries-lifetime registrants: Rejecting a registered sex offender (especially those who are required to register for life) is stated as a statutory exemption under the HUD tenant selection plan, Richer said. Many market-rate communities also accept this practice since there is a significant financial, safety, and reputational risk.

But beware: Sex offender registry websites in California, Nevada, and New Jersey have clauses prohibiting use of the sex offender registry information for housing eligibility. Even in those states, Richer believes that federally funded housing under HUD programs would probably still be eligible to use state registry information, but you should check with your attorney to confirm your company's position.

This is the first of four articles. Look for 'part 2' next week on MHCO.ORG.

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