Introduction

Tom Raleigh: Good morning, everybody. Thanks for joining. It looks like we got maybe fifty plus in the room already and growing. For those who don't know me, my name is Tom Raleigh. I am founder of Halsted Law Group. And this is the first of many webinars we plan to host over the next year.

I think there's no better topic than resident screening today because leasing season is about to get into full gear. And it's really good time to be learning and understanding what the new laws are. And we have really two great panelists that have joined us in Josefina and Michael Brown. They bring a ton of knowledge in this space. So when I called them up to ask if they join, I was really pleasantly surprised that they'd help us out today.

So with that, let's get started. And, as Marcela said, for those that are just joining now, we will provide a packet next week on this in a summary, but recommend you take notes. And as Marcela stated, please use the Q&A. At the end of this, we're gonna compile all the top questions and give you guys a summary off call at a later date. But, again, thanks again. With that, Josefina, you're up.

Fair Housing Overview

Josefina Nava: Great. Thank you, Tom. Alright. So, good morning. My name is Josefina Nava from Hope Fair Housing Center. Thank you for joining us this morning, and thanks again for the invitation.

So here's an overview of what I'm gonna be covering today. I'm gonna provide a quick introduction to Hope and our services. I'll do some quick level setting on what fair housing is. I'll cover two theories of discrimination, discriminatory intent and discriminatory effect. And then I'll discuss what an individualized assessment and interactive process is.

I'll share some case examples in the areas of arrest and conviction, source of income, and immigration status. Then I'll cover a few additional topics where there's additional screening guidance available in the areas of credit scores, eviction records, and related to survivors of violence. And then finally, I'll review some best practices and other considerations.

So just a few disclaimers. The information that I shared today is not intended to be considered legal advice. Every situation is different, and I encourage you to consult with a lawyer if you need assistance on a specific matter.

Alright. So, Hope has been around since nineteen sixty-eight, and we are focused on creating greater housing opportunities for all. We work vigorously to ensure that everyone has the chance to live in the place of their choice. And once they find home, to be able to enjoy it free from illegal discrimination.

We accomplish our work through outreach, education, and training to make sure that people know what their rights are, as well as what their responsibilities are under fair housing laws. And that they also know how to seek assistance, if they feel their rights are at risk of or are being violated. Our office accepts calls from the public, so we're able to investigate allegations of discrimination and counsel clients on their available options.

What is Fair Housing?

So let's jump into what fair housing means. Fair housing is the right for people to live where they choose, have access to housing, and enjoy full use of their home, and to be able to do that without unlawful discrimination, interference, coercion, threats, or intimidation.

There are seven protected classes under the Federal Fair Housing Act, meaning these groups cannot be discriminated against in housing because of these characteristics and include race, disability, sex, national origin, color, religion, and familial status.

The state of Illinois has additional protected groups under the Illinois Human Rights Act. Their sexual orientation, ancestry, marital status, gender identity, arrest record age, order of protection status, military status, source of income, and immigration status. In regard to source of income, that includes any legal and verifiable source of income, including, but it's not limited to Social Security benefits, a housing subsidy such as a housing choice voucher, or rental assistance.

For those of you who provide housing in Cook County, you're likely also familiar with the Cook County Human Rights Ordinance. It offers additional protections listed here. I'm just gonna name a few that stand out, housing status, bodily autonomy, cast, expression of a person's race, for example, traits like hair texture.

Another landmark protection associated with the Cook County Human Rights Ordinance is the just housing amendment, and that prohibits housing providers from denying applicants based on juvenile records, arrest records, or conviction records older than three years old. And for records less than three years old, it requires that housing providers consider those applicants on a case by case basis. Tom is gonna cover that in more detail a little bit later.

Tom: And, Josefina, can I just jump in really quick? When you've got federal, state, and Cook County guidelines, where are they leaning as an audience? They're mostly leaning into the most restrictive rides more local. Is that correct?

Josefina: That is correct. That, like, I actually would say all of the above. Yep. All of the above.

Tom: Very good. Thank you.

Josefina: No problem.

Prohibited Housing Acts

Alright. So now that we're familiar with the groups that are protected from discrimination, let's discuss what types of actions are prohibited by fair housing laws.

First up is making housing unavailable. Examples include refusing to negotiate or rent, eviction or refusal to renew, different terms and conditions, such as charging a higher rent or giving different treatment, making discriminatory statements. This could include notices, written or verbal statements, and advertisements, coercion, intimidation, threats, and interference, limiting a person's housing choices by misrepresenting that housing is not available when it actually is, or steering, which could mean directing someone to a specific neighborhood or less desirable housing, refusing to allow a reasonable accommodation or modification for a person with a disability, such as a policy change or structural change in housing, or retaliating against someone, because they've exercised their fair housing rights.

Alright. So now let's put that all together. Housing discrimination involves a combination of subjecting someone to a prohibited act because they are a member of a protected class. So it's easy equation, but now I'm gonna complicate things a little bit. We're moving on to discriminatory intent and effect.

Discriminatory Intent and Effect

So the equation I showed earlier demonstrates discriminatory intent pretty well. Someone is treated differently based on their membership in a protected class. There's also another way that discrimination manifests though, and it's called discriminatory effect. That concept describes the negative impact that a seemingly neutral policy has on one protected class more than others.

So let's start with an example of discriminatory intent first. So in this image, the housing provider is denying the applicant because they have a housing choice voucher. The prohibited act, the protected class, and intent are pretty clear here and would be illegal housing discrimination.

Alright. So discriminatory effect isn't as clearly identifiable. It requires there to be a policy. Again, that's neutral on its face, meaning that it doesn't explicitly discriminate against the specific protected group. But when you put it into practice, it has a greater negative impact on one protected class group.

So how do we know if a neutral policy has a discriminatory effect? There's a few tests that we can put the policy through to find out. So first of all, is the policy neutral on its face? Second, is there a statistical disparity associated with the policy? And then what is the outcome or effect of the policy?

So this time, the housing provider decides that he needs to screen for income to determine whether applicants qualify. The policy is that all applicants need to have a monthly income that is equal to at least three times the monthly rent amount. The policy passes the neutral test. It doesn't call out any specific protected groups as being excluded.

Alright. So now we're analyzing whether the neutral policy has a statistical disparity. So we're gonna do some math. Say the monthly rent is two thousand dollars per month. According to the minimum income requirement of three times the rent, the applicant would need to have a monthly income of six thousand dollars.

I did a quick search of some income brackets in DuPage County, and then based on that, I determined that about thirty-four percent of the general population of DuPage County has sufficient monthly income to qualify for the unit. Then I use twenty twenty-four income data for housing choice voucher holders in DuPage and determined that only about point three percent of housing choice voucher holders have sufficient income to qualify for the unit. So that's about one in every three hundred and thirty-three versus one in three for the general population.

I will disclaimer, I'm not a statistician. I didn't run this through a formal disparity ratio, but it indicates that there's likely a statistical disparity that's not in favor of housing choice voucher holders.

So finally, let's evaluate the outcome or effect of the policy. The housing provider didn't say no vouchers this time. He said, sorry. Your application was denied due to low income. And so this resulted in a denial of the voucher holder. And so the outcome of this policy is the same as the no vouchers policy for this applicant and likely the vast majority of housing choice voucher holders in DuPage County. So this is a neutral policy that unfortunately does have a discriminatory effect.

Individualized Assessment and Interactive Process

Alright. So now let's transition to screening approaches that can help infuse equity into the application process.

So I know that determining how to move forward with resident screening in light of concerns of discriminatory effect can feel overwhelming, but it is a necessity. Housing providers need to rent to tenants who can afford the rent and successfully follow through on their lease agreements, but they also don't wanna discriminate in the process.

So incorporating an individualized assessment and interactive process in tenant screening really is a good solution. There's a few essential elements to this process. First of all, the housing provider abandons blanket policies that lead to blanket denials of applicants. Instead, each applicant and their application is reviewed on a case by case basis. And so understanding the applicant's circumstances then allows the housing provider to see the current potential of an applicant rather than relying on old, inaccurate, or potentially irrelevant information.

And so we're gonna cover in just a minute some of the steps involved in an individualized assessment, but, essentially, it's an opportunity for applicants to challenge negative information. The process is interactive, and it invites sharing of additional information or documentation that is not as easily learned from a screening report. But in order for this process to work, there really needs to be transparency, first of all, in what the housing provider's tenant screening criteria is, and secondly, transparency in the reason for the housing provider's decision.

So when I referenced allowing applicants an opportunity to challenge negative information, here's what that might include. An applicant may challenge the accuracy of the information retrieved in the screening report. Errors in screening reports can actually be pretty common. For example, a report might pull negative information about a different person who shares the same name. The record might omit a court decision in the applicant's favor, or it might just have the status of a debt as being incorrect.

If the information in the screening report is accurate, the process then provides an opportunity to mitigate concerns of the housing provider by the tenant demonstrating that they can be a successful tenant. So mitigating concerns can include the applicant providing information challenging the relevancy of the negative information to their prospective tenancy.

For example, an applicant may discuss how the reason for negative information is unlikely to recur because maybe now they have a rental subsidy or they have stable employment or perhaps they attended a rehabilitation program. They may also present other information demonstrating their ability to make payments such as past rent, utility bills, or nontraditional payments like payday loans. Housing providers really should consider how much time has passed since the negative factor on the report occurred. For example, an old eviction or conviction from many years prior likely isn't the best determinant of current tenant behavior.

Finally, an interactive process needs to include an opportunity for the applicant to make a disability related request to either meaningfully engage in the process. So they may request to have a meeting in person to discuss the relevancy of the information, or they may request an accommodation in explaining how their disability may be resulted in the negative screening factor that came up in the report. So, for example, they may have had a gap in their disability benefits and therefore, defaulted on rent during that time period.

The box in blue just has some of the examples I shared of information that applicants may be able to provide to alleviate concerns about negative factors.

So sometimes housing providers worry about making exceptions to their policies for just some applicants, but they probably have experience doing this at some point. So let's take this situation for example. The housing provider has a screening criteria and policy for their property such as no dogs allowed. This is a neutral policy. Dogs are not a protected class, but an applicant is very interested in renting an apartment at that property, and they share with the housing provider that they have a visual disability and use a service dog to assist with their daily tasks.

So if the housing provider blanketly applied the no dogs allowed policy or policy here, they'd essentially be denying housing to every applicant with a disability related need for an assistance animal. The housing provider, however, instead responds that they will make an exception to the no dogs allowed policy if there is a disability related need.

So if the applicant's disability or related need is not apparent, then the housing provider can request information or documentation that the applicant has a disability and that the assistance animal is necessary. And so depending on the information the housing provider receives, they then make a determination about whether they will make an exception to their policy.

Case Examples

Alright. So now let's see some screening scenarios and how they play out in real life. I'm gonna share some case examples.

So our first case example is related to arrest and conviction record screening. Mister Johnson lived at an apartment complex called Villages on Maple in Lisle, Illinois on two different occasions between twenty fourteen and twenty twenty-one. He was charged in twenty fifteen for possession of a licensed gun. The charge was dismissed in twenty sixteen, and he was not convicted.

In February twenty twenty-one, about five years later, he asked management if he could downsize to a smaller unit. And they said, sure. No problem. But you're gonna have to reapply, and we're gonna run a new criminal background check.

So the screening report that the management received had an error and listed the outcome of his charge as guilty. Mister Johnson attempted to dispute the accuracy of the report with management, but they said it didn't matter whether he was guilty or not. He had to go. And so instead of getting the smaller unit he wanted, he ended up receiving a thirty day notice of lease termination.

So in February of twenty twenty-two, Hope and mister Johnson filed a federal lawsuit alleging that the housing provider violated the Fair Housing Act by enforcing a blanket ban policy that denied renters with the perceived or actual record of arrest or conviction, a policy that had a discriminatory effect on black households.

And so in May twenty twenty-two, the lawsuit was settled by a consent decree, and the housing provider agreed to pay two hundred and thirty-five thousand dollars to the complainants and to remove blanket bans on arrest and conviction records at all of their properties.

So this matter, I feel, really highlights the necessity of an individualized assessment rather than the housing provider blanketly denying mister Johnson. They could have provided him an opportunity to present information disputing the inaccurate finding on the report.

Mister Johnson was charged, but he was not convicted. But let's just say that mister Johnson actually was convicted for possession of a licensed gun five years earlier, should he have still been forced out of his home. This is when evaluation of relevancy and recency are really important.

If you recall, mister Johnson was an existing tenant of Villages on Maple and a good one. So they knew him. They knew his behavior enough to have ruled out concerns about safety at the property. Additionally, the record related to possession of a licensed gun was not relevant in the housing context.

Case Examples: Source of Income

Alright. So the second set of cases are related to challenging minimum income requirements as having a discriminatory effect based on protected sources of income.

So in Fair Housing Justice Center versus Pelican Management, the complainant alleged that Pelican's minimum annual income requirement of forty-three times the total monthly rent discriminated on the basis of both disability and source of income. This case was resolved via judgment with the housing provider being required to adopt nondiscriminatory policies and to pay nine hundred and ninety thousand dollars in monetary damages.

In Moran versus Tower Management, the complainant challenged Tower Management's minimum income requirement, which required an annual income of thirty-three thousand dollars per year for a one bedroom apartment. The complainant was a disabled man, and he had a housing subsidy. And he was deterred from applying because the management at the property attempted to apply their minimum income requirement based on the entire monthly rent rather than the smaller fraction that he would actually be responsible for.

So the matter was settled following a finding of probable cause by the New Jersey division of civil rights. And so relief included tower management adopting, again, a nondiscriminatory policy and paying monetary damages to the complainant in the amount of thirty thousand dollars.

Now these cases were filed in New York and New Jersey, states that similarly to Illinois have a source of income protection. The Illinois Department of Human Rights does have an FAQ on their website that I think will be very helpful to housing providers

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