The Chicago Association of REALTORS®, the “Voice for Real Estate” in Chicago since 1883, represents over 17,000 members from all real estate specialties including commercial sales, development, property management, appraisal, auctions and residential sales.
In April 2016, the Office of General Counsel (OGC) for the U.S. Department of Housing and Urban Development (HUD) published a memorandum on criminal background checks in housing, “Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions,” determining that it is discriminatory under the Disparate Impact Housing Theory to base housing denial solely from a person’s arrest record. In addition, when screening a prospective tenant, a housing provider must take each applicant on a case-by-case basis; a blanket policy banning criminal convictions is discriminatory. The memorandum also suggests that a housing provider should look back only seven years into a prospective tenant’s criminal history. REALTORS® across the nation, especially in high-rental markets such as Chicago, have been informing clients and educating them on compliance with the guidance.
Meanwhile, many housing advocates are pushing for policy changes at the local and state level out of fear that the current administration may “dilute” or publish new guidance contrary to what was circulated in 2016 under the past administration. NAR Senior Policy Representative Megan Booth and NAR members met with Anna Maria Farias, HUD’s newly confirmed Assistant Secretary for Fair Housing and Equal Opportunity; Assistant Secretary Farias explained to the group that they had no plans to pull back on the OGC’s guidance on criminal records and that the 2016 guidance was important to the department.
THE LOCAL PERSPECTIVE
In Cook County, there has been ongoing discussion about adding “criminal background” to the Cook County Human Rights Ordinance. This addition would further prevent housing providers from using a prospective tenant’s criminal history to make a housing decision. The goal is to decrease barriers to housing for those who have a criminal history, but a landlord could be prevented from denying housing to people with serious criminal conviction histories, including include rape, murder, aggravated assault, arson and larceny, as well as those on the sexual offender registry.
Although to date there is no proposed language on the table at the Cook County Board of Commissioners, there is a growing movement by tenant rights advocates to push forward such a policy change. The Metropolitan Tenants Organization’s “Just Housing” initiative suggests limiting landlords to a three year look back for convictions, and a ban on juvenile arrest records or using arrest records without a conviction.
WHY WE’RE FIGHTING THIS
According to the National Institute of Justice, nearly 68 percent of released prisoners are re-arrested within three years of being released; within five years, more than 76 percent are re-arrested. Property offenders (property crime includes theft, arson, larceny, and vandalism, among others) who were released from prison were the most likely to be rearrested at 82 percent. A three-year cap on criminal history would not properly show a pattern and history of convictions and could potentially allow a tenant to rent who may damage property or seriously injure another tenant.
The City of Seattle recently passed a full ban on the use of any criminal records when screening applicants for rental housing; the only exception is for the six percent of sex offenses where the individual was convicted as an adult and then ordered to be a lifetime registrant on a local, state, or federal sex offender list. Even then, the landlord must make a business justification for denying the applicant. Because of the risky business climate, small, independent landlords are selling their properties, which are becoming owner-occupied or being replaced by expensive luxury housing, according to Sean Martin, Director of External Affairs at the Rental Housing Association of Washington, who opposed the ordinance on behalf of his organization. “The best way to preserve existing affordable rental housing is by ensuring that small, independent landlords don’t leave the market due to risk pushed on to them by laws such as this one. This trend has already begun in Seattle and is only accelerating as elected officials fail to address the true causes of our housing shortage.” Chicago cannot afford to lose affordable housing and must preserve existing stock.
C.A.R. asserts that a property owner should retain the right to screen prospective tenants; this includes conducting a criminal background check that complies with HUD’s guidance. The seven-year look back is sufficient to demonstrating a criminal conviction history. C.A.R. opposes any policy change that not only infringes upon private property rights, but also potentially puts other tenants and property at risk.
This is not just a local issue; it’s a national issue that requires a wholesome look at the judicial system. It should not be a landlord’s responsibility to solve a social problem that could potentially put other tenants and private property at risk. C.A.R. looks forward to continuing to educate members on HUD guidance and how they can comply, while still protecting the public and private property.
Author: Beth Wanless, Director of Government Affairs