Who’s In, Who’s Out : Tenant Screening Practices

1. Who’s In, Who’s Out: Tenant Screening Practices October 11, 2016

2. Our Mission: Housing is the foundation for success, so we collaborate with individuals, communities and partners to create, preserve and finance affordable housing.

3. Agenda • Background • Basic Components of a Tenant Selection Plan (TSP) • HUD Guidance – April 4, 2016 • Special Considerations for Supportive Housing • Questions

4. Background: Why TSP Guidance?

5. Background • Minnesota Housing has investments in properties throughout the state • Minnesota Housing has adopted a strategic priority to prevent and end homelessness • Households who have experienced homelessness are likely to have barriers to accessing housing: • Criminal backgrounds • Evictions • Poor credit and housing history

6. Guidance from Minnesota Housing • Broad so it can apply to all multifamily properties funded by Minnesota Housing • Some funding sources have specific TSP requirements; this guidance does not change those requirements • Consult an attorney to ensure TSP and application process complies with fair housing laws

7. Basic Components of a TSP • Written Tenant Selection Plan • Housing providers should have a written TSP • TSP should be made available to applicants before they apply or pay an application fee • Wait List • TSP should spell out any wait list process • Eligibility Criteria • TSP should provide clear information on eligibility criteria, including income and program-specific requirements • TSP should state the processes and criteria that will be used to evaluate applications

8. Basic Components of a TSP • Tenant Background/Credit Reports • Companies run background reports typically for a fee • Consumers have rights around the information • Must receive notice with name of the company and a way to access that information

9. Basic Components of a TSP • Notice of Denial • Give applicants a prompt written notice of denial that states criteria the applicant failed to meet • Appeal Process • Any process should be clearly stated • Some programs require an appeal or meeting process; guidance encourages appeals as a way to obtain mitigating information

10. Basic Components of a TSP • Domestic Violence/VAWA • Applicants with Disabilities • Housing providers should provide a reasonable accommodation process • TSPs should not raise barriers to individuals with disabilities • Tenant-Based Rental Assistance • As a condition of funding, housing providers cannot refuse to lease a unit to, or discriminate against, a prospective tenant because that tenant receives tenant-based rental assistance

11. HUD Guidance • Issued in early April 2016 • Fair Housing Act and Criminal Record Screening • Provided guidance to housing providers on how to structure TSP policies regarding criminal background

12. HUD Guidance: The Issue • Fair Housing Act prohibits discrimination on the basis of race, color religion, sex, disability, familial status, or national origin • 100 million U.S. adults, nearly 1/3 of the population, have a criminal record • “Across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the population.” • Criminal records-based barriers to housing likely to have disproportionate impact on households of color

13. HUD Guidance: The Issue “[W]here a policy or practice that restricts access to housing on the basis of criminal history has a disparate impact on individuals of a particular race, national, origin, or other protected class, such policy or practice is unlawful under the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect.”

14. HUD Guidance: Arrests • Arrests alone “do not constitute proof of past unlawful conduct” • HUD indicates applicants should not be denied because of arrests (without conviction)

15. HUD Guidance: Convictions • HUD does consider a conviction to be evidence of criminal conduct • Encourages housing providers to distinguish between convictions that indicate a demonstrable risk to resident safety and/or property and those that do not • Applicants may be rejected for convictions of the illegal manufacture or distribution of certain controlled substances

16. HUD Guidance: Convictions • HUD suggests that tenant screening policies take into account: • Nature and severity of a conviction • Amount of time that has passed • Policy that considers mitigating information (as opposed to one with strict time limits) is less likely to be discriminatory: • Facts or circumstances re: conduct • Age of the individual at the time • Evidence of good tenant history before or after • Evidence of rehabilitation

17. Special Considerations: Supportive Housing • Programs are intended to house people who often have poor credit, poor rental histories, or criminal backgrounds • Guidance encourages housing providers adopt lenient and flexible criteria regarding common barriers • Consider mitigating factors such as potential benefit of housing and services • Considering mitigating factors in criminal history screening may also help limit barriers

18. Special Considerations: Supportive Housing • Partnerships are key to developing and maintaining supportive housing • Service providers can provide input on tenant screening policies, especially when starting the partnership

19. For More Information Contact: Shelley Bork Shelley.Bork@state.mn.us Carrie Marsh Carrie.Marsh@state.mn.us www.mnhousing.gov