New HUD Guidance
On April 4, 2016, HUD’s Office of General Counsel issued a document entitled 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 (the “Guidance”). The Guidance discusses how disparate impact and disparate treatment methods of proof may apply in a situation where an adverse housing-related decision (e.g., a refusal to rent or refusal to renew a lease) is based on an individual’s criminal history. According to the Guidance, many formerly incarcerated individuals, as well as individuals who have been convicted but not incarcerated, encounter significant barriers to obtaining safe, secure and affordable housing. According to the Guidance, these barriers are the result of the individuals’ criminal history. Also, according to the Guidance, African Americans and Hispanics are arrested, convicted and incarcerated at disproportionate rates. Although persons with a criminal record are not a protected class, the Guidance asserts that a policy that restricts access to housing based on an individual’s criminal history may violate the Fair Housing Act (the “FHA”) if the burden of such a policy disproportionately affects, i.e., the policy has a disparate impact, on persons of a protected class and the provider does not have a sufficient justification for the policy. While there is nothing in the FHA which prohibits a housing provider’s consideration of an individual’s criminal record, HUD has determined that any such policy needs to be “tailored” to take into account such factors as the nature and severity of the crime committed, as well as the length of time that has elapsed since the crime was committed, or conviction occurred. However, even when a policy is tailored as suggested, when challenged, a provider will still bear the burden of proving that the policy serves a substantial, legitimate, nondiscriminatory purpose and that, therefore, any resulting discriminatory impact that does occur is justified. It is unclear what precipitated the issuance of the Guidance. Whatever the reason, the Guidance is surely to cause problems, perhaps significant problems, for housing providers. At a minimum, it raises legitimate questions about how a provider should reconcile the Guidance with other HUD rules regarding the consideration of an individual’s criminal history in connection with decisions regarding admission and/or termination of tenancy or assistance, as well as the extent to which a housing provider may exercise discretion in connection with such decisions.
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