Landlords – Be Aware Of Felons & Fair Housing Laws

Recently I sat down with Robert J. Wise who has been practicing housing law in Kansas City, to talk about Landlords and Discrimination.

When Landlords think of discrimination we usually think in terms of intentional acts which exclude members of certain groups from employment, housing, or other opportunities. The civil rights laws, however, protect against not only intentional acts of discrimination but acts which, though apparently neutral on their face, actually have a discriminatory impact on protected groups.

Not All Discrimination is Illegal.

We discriminate against various people regularly and legally. Landlords choose people with good credit over those with bad credit. We reject applicants who have a previous history of evictions or nonpayment of rent. Such discrimination is legal and based on a legitimate business purpose.

Housing  Discrimination and Members of the Protected Class

Illegal discrimination occurs if we make a choice based on a person’s membership in a protected class. These protected classes include, under the federal Fair Housing Act –  race, color, national origin, religion, sex, disability, and families with children.

Examples of How Landlord Policies Discriminate Unintentionally:

Under what circumstances might you be liable for violating the law unintentionally? What if you implement a policy which is neutral on its face and has no discriminatory intent but has a discriminatory effect when actually put into practice?

In the case of Betsey v. Turtle Creek Associates in 1984. The owners of the property decided to make it an all adult property and began to evict all the families with children. Although families with children were not a protected class at the time, the facts were that of the families to be evicted, 74.9% of the nonwhite families were given eviction notices and only 26.4% of the white families received such notices. The court held that am act of discrimination had been proven.

Although statistics are important in determining whether there are violations on a protected class, there is no precise formula for such a determination. The courts have clearly held that only a “significant” discriminatory effect violates the act.

In 2005, the Eighth Circuit decided a case which arose in St. Louis, Missouri. Darst Webbe Tenant Association v. St. Louis Housing Authority involved a plan to demolish a property of low income, public housing rental units to be replaced by a mix of housing which included low income, public housing, low income tax credit units, and market-rate rental units.

The property to be demolished included 758 low income public housing rental units and 242 units designated for the elderly. By the time of the revitalization plan, only 220 of the public housing units remained occupied. The residents were mostly African-Americans and/or female-headed households with children.

How Do Felons Fit Into Your Rental Polices?

We will now turn to the proposal of making felons a protected class and the possible progress of a Fair Housing case based on disparate impact.

When looking at the present categories which are protected by the Fair Housing Act, it is apparent that felons are not similar to those which are presently protected. All seven present protected classes consist of categories in which people have no choice in participation – race, color, national origin, sex, persons with disabilities – or groups in which the choice should not be relevant to a landlord, such as religion or families with children.

The same cannot be said regarding felons. No one is born with a felony conviction. A felony conviction results from choices made by that individual. To give felons the protection of the Fair Housing Act protects them from the consequences of their own conduct. No such protection is presently afforded to anyone by the Fair Housing Act.

There is another obvious distinction between the present protected classes and felons. The fact that a person is African-American, Jewish, Catholic, male, female, etc., does not tell you anything relevant about his/her character or what kind of tenant that person might be. On the other hand, the fact that a person has committed a felony does say something relevant about his/her character.

It has been proven that the person, on a least one occasion has shown disregard for the life, safety, or property of another person or has otherwise disregarded the rules of society. Is a landlord being totally unreasonable to think that a felony conviction says something relevant about what kind of tenant that person might be? Preferring a non-felon to a felon is not as unreasonable as preferring a member of one race over another, for example.

Let’s look at the scenario of a property owner who refuses to rent to anyone with a felony conviction and a suit brought by the City based on disparate discriminatory impact on a protected class. Let’s refer to that protected group as Group X. How might such a Fair Housing suit actually progress?

The City would be required to prove that a refusal to rent to anyone with a felony record would have a “significant adverse impact” on members of Group X. That is, not necessarily that felons can’t find housing, but that members of the protected Group X can’t find housing. If the property in question had any significant number of Group X residents, as compared with the local population, the City might not prove its case.

For the sake of argument, let us assume that the City has shown such an impact. The property owner would then offer its justification that, regardless of its effect on any group, it is reasonable to exclude felons for the sake of safety and crime prevention. If the court accepts such a justification, the City then has the burden of showing how the same goals can be achieved with less discriminatory results. The City’s position thus far has been that the property owner should put some time limit on the use of felony convictions rather than a blanket prohibition – but would that solve the disparate impact problem?

Let us assume that in the last 50 years, 50% of felonies were committed by members of Group X, 30% by members of Group Y, and 20% by Group Z. Certainly, members of Group X would be hardest hit by a blanket prohibition against felons. Suppose the City argues that a property owner should only look at crimes committed in the last ten years. What if the statistics are the same and 50% of the crimes committed in the last 10 years were committed by Group X members? What if the statistics were the same for crimes committed in just the last year?

If the statistics were basically the same for any given period of time, then the same impact on Group X would exist regardless of the policy in place. If that is true, then the City would not be able to offer “a viable alternative that satisfies the defendant’s policy objectives while reducing the discriminatory impact.” In short, if the City brings a lawsuit based on disparate impact, it has the burden of offering a plan showing that the same objectives of crime reduction can be accomplished in a manner which has a lesser impact on the protected group.

At the present time, HUD has not taken the position that a blanket prohibition against felons violates the Fair Housing Act. In a letter dated June 17, 2011, Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing, discourages such a prohibition but does not state that it constitutes a violation of law.

Henriquez states that the Obama administration “believes in the importance of second chances – that people who have paid their debt to society deserve the opportunity to become productive citizens . . .” Her letter to Public Housing directors points out that the only “explicit bans on occupancy based on criminal activity” (in Public Housing) is for persons involved in methamphetamine production on federally assisted housing property and registered sex offenders.

“Beyond these restrictions, PHAs have broad discretion to set admission and termination policies” and they may consider evidence of rehabilitation and likelihood of “favorable future conduct.”(Emphasis added.) It is noteworthy that even when addressing Public Housing directors (over whom HUD has more control than conventional landlords) the Assistant Secretary does not say “Thou shalt not discriminate against felons,” nor does she say that such a policy violates the Fair Housing Act.