The recent decision from Judge Vanessa Bryant in Connecticut Fair Housing Center v. CoreLogic Rental Property Solutions, LLC, 2020 WL 4570110 (D.Conn. August 7, 2020) was followed only weeks later by HUD’s final regulation on disparate impact claims, 85 FR at 60288, September 24, 2020.¹ The CoreLogic decision’s most important holding was that a third party tenant screening service could be liable for providing information that had a disparate impact on a protected class, but Judge Bryant’s denial of a slew of defense motions for summary judgment was a reminder of the potential power of disparate impact claims. HUD’s new regulation, titled “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard” creates a set of landlord friendly rules for disparate impact claims that may make CoreLogic irrelevent.
NOTE: on October 22, 2020 the National Fair Housing Alliance and others filed National Fair Housing Alliance v. Ben Carson, Secretary of the Department of Housing and Urban Development, Case No.3:20-cv-07388 in the United States District Court for the Northern District of California. The lawsuit attacks the legality of the new HUD regulations on numerous grounds. (the Complaint is 66 pages long). It was presumably filed in a plaintiff friendly court, and the Ninth Circuit is a civil rights friendly circuit, but the legality of the rule will ultimately go to a Supreme Court that is far less friendly to civil rights legislation. If there is a change of administration in November this regulation is likely to be short lived, so housing providers should probably not make too much of it until we know where the political winds will decide to blow.
What does this have to do with disabilities?(7) The Supreme Court case that triggered the renewed scrutiny of disparate impact claims, Texas Dept. of Hous. and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519, 135 S.Ct. 2507 (2015) concerned discrimination based on race and ethnicity, as did CoreLogic. However, though race and ethnicity have received the most attention in disparate impact cases, otherwise neutral policies can also result in disability discrimination. The Department of Justice’s special report, “Disabilities Among Prison and Jail Inmates, 2011–12″² shows that prison inmates are three times and jail inmates four times more likely to be disabled than the general population. The report doesn’t cover arrest records, but there can be little doubt that those arrested are also far more likely to be disabled than the general population. In short, any policy of screening tenants based on arrest or conviction will almost certainly have a disparate impact on the disabled.
By now, of course, most landlords have adjusted to the problems associated with the indiscriminate use of arrest and conviction records as a tenant screening method. Use of arrest records is almost always a mistake since an arrest is not evidence of guilt and therefore not evidence that a prospective tenant poses a risk of any kind.³ Conviction records are more complex. Use of convictions for crimes not associated with a risk to persons or property may not be justifiable, and because the risk that a convicted criminal will commit another crime goes down with time use of older convictions can also be a problem. (4) At the same time, certain crimes an always be used to exclude a prospective tenant, including convictions for drug manufacture and distribution(5) and, presumably sex offenses (6).
Although landlords have adjusted, a policy that takes into account all the considerations related to the nature of a crime and the recidivism rate are bound to be complicated. Recommended policies for dealing with criminal convictions try to take these considerations into account, including only crimes with a clear relationship to the safety and security of an apartment complex and different look-back periods for felonies and misdemeanors.(8) It isn’t clear, however, that these policies sufficiently take into account the relationship between disabilities and crime if such a relationship exists.(9) For example, if criminal behavior was a consequence of a treatable mental illness then perhaps treatment should be considered as a factor when rejecting prospective tenants with prior convictions. On the other hand, knowing that mental illness may be exacerbated by incarceration, perhaps former convicts with mental illnesses present a higher risk than others. Rental criteria based on convictions may unnecessarily and therefore improperly discriminate against those with disabilities who have also engaged in criminal behavior. The could be especially problematic because while the prohibition against discrimination and ethnicity is well understood if not absent, irrational fears of mental illness persist and are often not recognized as prejudices.(10)
Beyond criminal background checks there are other policies that might have a disparate impact on the disabled. Unemployment or underemployment is more common for those with disabilities who in turn may depend on government assistance that does not meet source of income requirements.(11) They are also more likely to have caregivers and therefore have an unrelated resident who is not a tenant. These issues are usually handled under the accommodation obligation in 3604(f)(3)(B), but it isn’t hard to imagine a claim that the policy itself violates the Fair Housing Act.
That, however, is the tempest in a teapot referred to in the title. HUD’s former regulation on disparate impact outlawed practices with a discriminatory effect but recognized legally sufficient justifications as a defense. The new regulation(12) essentially reverses the burden of proof for discriminatory impact claims and makes it harder to establish the existence of a discriminatory effect in the first place. A plaintiff must allege and prove that the policy is “arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law” as well as establish to a much greater degree of certainty than before that there is a discriminatory effect. A full discussion of the new regulation will have to wait for another day, but for the present landlords probably do not need to worry too much about whether using criminal convictions as screening criteria might constitute a form of disability discrimination, or that other policies with an impact on the disabled will somehow violation the Fair Housing Act.
¹ My thanks to Virgina Tye, email@example.com, for calling the decision and the new HUD regulation to my attention.
² The report can be found at DOJ report on disabilities and incarceration.
³ HUD’s 2016 Guidance is explicit in this regard: “the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property posed by a particular individual.” April 4, 2016 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.
4. “Recidivism Among Federal Offenders: A Comprehensive Overview” from the United States Sentencing Commission, which can be found at Recidivism Report from US Sentencing Commission. Judge Bryant recognized the lack of certainty in this area when she denied summary judgment for the plaintiffs based on the notion that CoreLogic could simply take time into account. She wrote:
As to the second alternative, a “reasonable, evidence-based” cap on the lookbook period for conviction is not sufficient to win Plaintiffs’ summary judgment as too many disputed facts remain. First, Plaintiffs do not specify what an “evidenced-based” number of years, and Plaintiffs’ expert could not specify what she thought was an “evidence-based” lookback period for any particular CrimSAFE category of crime. [Dkt. 132 at 228-29]. The Court cannot find that RPS could undertake an alternative the outline of which even Plaintiffs do not know. Second, the number of years is in dispute in light of the BJS study discussed above.
5. 42 U.S.C. §3607(b)(4).
6. See, 24 C.F.R. §5.856 and 42 U.S.C. §13661 permitting a lifetime ban for sex offenders in federally subsidized housing projects.
7. CoreLogic does include a discussion of disability discrimination, but this is the one claim on which CoreLogic was granted summary judgment. The claim was based on the disparate impact of CoreLogic’s policy of requiring proof of conservatorship before releasing records to parties other than the prospective tenant, not its policies concerning arrests and convictions.
8. The National Apartment Association model policy looks back 7 years for felonies and 3 years for some misdemeanors with no disapproval for other misdemeanors.
9. I wasn’t able to find anything written for laypersons that reached strong conclusions on this subject.
10. “Mental illness and violence,” Harvard Mental Health Letter, January, 2011, found at Mental illness and violence article.
11. See my blog, “Is economic discrimination disability discrimination?” for a discussion of source of income discrimination, which some states and municipalities make illegal.
12. Codified at 24 CFR §100.500 for the most part.