The ACLU and a taxpayer-funded group are “demanding a federal crackdown on landlords who don’t rent to tenants with eviction records,” reports Reason Magazine.
They are arguing that it is racist and sexist not to rent to people who have histories of being evicted, because blacks are more likely than whites to be evicted, and black women apparently have the highest eviction rates.
In a complaint filed with the U.S. Department of Housing and Urban Development (HUD) last week, the HOPE Fair Housing Center, which gets taxpayer money, “argues that such policies amount to illegal discrimination based on race and sex, given the higher likelihood that black people, and particularly black women, will have an eviction record.”
“A housing provider that enforces a policy that denies the opportunity to rent to anyone who has an eviction filing or judgment is disproportionately denying housing to Black households and Black women in particular,” wrote HOPE Deputy Director Josefina Navar in a blog post published by the ACLU about the complaint.
If the government rules in favor of the complaint, that could harm the housing market. Evicting a tenant for not paying rent can take months, and it is often impossible to collect the unpaid rent. So if landlords can’t consider whether someone has a history of not paying rent in deciding whether to rent to them, some people will stop being landlords. That will backfire on tenants, because less rental housing will be built, and fewer people will be willing to rent out rooms in their homes. A higher fraction of housing is vacant in countries where it is very hard to evict a tenant.
As Reason reports,
HOPE’s complaint targets the “no-evictions” policy of one specific landlord, Oak Park Apartments, which owns 90 multifamily buildings in the Chicago suburb of Oak Park, Illinois….The federal Fair Housing Act bars housing providers from discriminating “because of” race and sex, along with other protected classifications like disability, national origin, and family status.
Subsequent court decisions and federal regulations established the idea that prohibition can apply to policies that had a “disparate impact” or “discriminatory effect” on protected classes—even if there’s no discriminatory intent present.
HUD, for instance, has issued guidance saying that blanket policies that exclude tenants who have a criminal record can violate the Fair Housing Act. But critics argue that broad direction leaves housing providers with little guidance on the kinds of policies they can adopt to screen tenant or mortgage applicants.
“There’s no way to really know that you’re going to be facing potential liability down the road,” says Ethan Blevins, an attorney with the Pacific Legal Foundation. “It does put landlords in a really tough position, and it’s tough to know what a court will find legitimate.”
In recent years, HOPE has participated in a number of lawsuits that expand the universe of housing industry practices that fall afoul of this disparate impact standard.
Last year, it sued an Illinois property management company’s policy of not renting to people with criminal records.
The group was also a co-plaintiff in a 2020 lawsuit alleging real estate listing company Redfin’s policy of only listing homes above a minimum value had a discriminatory effect. Redfin settled that lawsuit for $4 million in 2022.
The Biden administration has provided generous support to private groups’ efforts to police property owners’ allegedly discriminatory housing practices, including HOPE.
In March, HUD announced it was awarding grants worth $54 million to 182 fair housing organizations as part of its “Fair Housing Initiatives Program.”
HOPE received a three-year grant of $425,000 to fund its “private enforcement initiatives.” The group says its HUD complaint is the first to challenge a landlord’s no-eviction policy.
Even under existing fair housing regulations, housing providers can still adopt policies that have a disparate impact on protected classes, but they must show that these policies serve a “substantial, legitimate, nondiscriminatory interest” and that there’s not another less discriminatory policy they could adopt to serve that interest.
One can imagine a pretty straightforward, race-neutral reason for not renting to people with eviction records: Someone who failed to pay the rent at their last apartment is more likely to fail to pay their rent at their next one too.
Banning landlords from asking about past evictions would result in a minority of them covertly discriminating against applicants who are black, including the majority of blacks who paid their rent. That would hurt conscientious black tenants.
When landlords are forbidden to ask about something (like a past eviction or criminal conviction), a minority of them instead covertly discriminate against the groups that are most likely to have records (of being evicted or criminally convicted). As Matthew Yglesias, formerly of Vox and the Center for American Progress, notes, “banning background checks increases racial discrimination.” He cites a Federal Reserve Bank study of the effects of a Minneapolis ordinance curbing landlords’ use of criminal background checks or similar screening for tenants. It found that after the Minneapolis ordinance went into effect, landlords were more likely to discriminate against applicants with stereotypically African-American names.
