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Hamptons.com
April 21, 2016

HUD Speaks Out On Denying Housing To Persons With Criminal Records

John A. Viterittiby John A. Viteritti
in Real Estate
Home Real Estate

New York State and the federal government have recently taken action with respect to discrimination in the sale and renting of housing. In this article we will address the role of the federal government as a result of a memorandum issued by the U.S. Department of Housing and Urban Development (HUD) issued on April 4, 2016.

A Supreme Court ruling on June 25, 2015 provides context for the action taken by HUD. That decision found that disparate impact on protected classes continues to be a violation of the 1968 Fair Housing Act. On March 23, 2016, a U.S. Court of Appeals upheld a lower court’s decision against the Incorporated Village of Garden City based on disparate impact. So what is disparate impact as defined in the new HUD regulation? Their memorandum states: “The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect because of race, national origin, or other protected characteristics.” It goes on to say, “Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African Americans and Hispanics.” The memorandum further states, “While the Fair Housing Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overboard criminal history -related bans are likely to lack a legally sufficient justification. Thus, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified.” It states, for example, “factors as the type of crime and the length of the time since conviction,” must be considered. “Bald assertions based on generalizations or stereotypes that any individual with an arrest or conviction record poses a greater risk than any individual without such a record are not sufficient to satisfy this burden,” it asserts.

HUD delineates the three steps used to analyze claims that a housing provider’s use of criminal history to deny housing opportunities results in a discriminatory effect in violation of the Fair Housing Act. They are as follows: Whether the criminal history policy or practice has a discriminatory effect. Whether the challenged policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Whether there is a less discriminatory alternative. The memorandum elaborates on each of these three categories. It also provides statutory exemption from liability. It states: “The Fair Housing Act provides that the Act does not prohibit, conduct against a person because such person has been convicted — of the illegal manufacture or distribution of a controlled substance as defined in the Controlled Substance Act.” It adds, as clarification, it only applies to the person’s “conviction” for these acts, “not arrests.”

As a final statement, HUD cautions, “Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics violates the Act.”

A thorough reading of the HUD ten-page memorandum should convince anyone involved in the rental of properties first consult an attorney before proceeding.

Since July 1, 2008, the New York Department of State requires at least three hours of training in Fair Housing Laws every two years for real estate license renewal. The subject is also included in the 75-hour initial salesperson licensing course. The laws are complex, different with respect to Federal, State and Local laws, and constantly being broadened and redefined, either by statute, case law, or regulatory agencies such as HUD, the New York State Division of Human rights, and the Suffolk County Human Rights Commission.

In a subsequent article, we will discuss two new additions to New York State Fair Housing Laws.

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