US HUD Measures Regarding Citizens with Criminal History & Potential Impacts on the Multifamily Industry

The U.S. Department of Housing and Urban Development (HUD) announced on April 24th, 2023, an action plan to “Remove Unnecessary Barriers to Housing for People with Criminal Records,” a plan with significant measures aimed at ensuring that individuals with criminal history records are not unjustly denied access to housing. The announcement was made during National Fair Housing Month, which is so named to commemorate the enactment of the Fair Housing Act of 1968, a follow-up federal action taken to supplement 1964’s Civil Rights Act that prohibited discrimination concerning the sale, rental, or financing on housing based on race, religion, gender, or disability. The Biden Administration also declared April “Second Chance Month,” dedicated to formerly incarcerated individuals who are reentering society.  

One of the key steps HUD plans to take is the introduction of rulemaking to modify regulations governing public housing agencies (PHAs) and HUD-subsidized housing providers. This change aims to prevent the denial of housing assistance based on criminal history records unless mandated by federal law. The new rules will discourage the automatic disqualification of applicants based on criminal convictions, especially where these do not directly relate to the safety and well-being of the community, such as older convictions or those not involving violence or property damage. Instead, there will be an emphasis on individualized assessments to determine the real risk posed by applicants, taking into account various factors like employment status, participation in rehabilitation programs, and community involvement. 

Additionally, HUD will issue guidance and technical assistance to help PHAs and HUD-affiliated owners in applying these principles. This includes determining which convictions are relevant to health and safety and conducting individualized assessments when reviewing criminal history records. HUD’s actions will also extend to supporting reentry programs and partnerships between public housing authorities and services like counseling and legal aid, aimed at reducing homelessness and facilitating successful community reintegration for formerly incarcerated individuals. 

These measures are expected to have a significant impact on multifamily residential community property managers and developers. For instance, property managers may need to adjust their tenant screening processes to comply with the new guidelines. This could involve more nuanced assessments of potential tenants with criminal records, considering factors beyond just the presence of a conviction. The new rules may also require property managers to provide applicants with criminal records reasonable time and opportunity to present mitigating factors before making an admission decision. 

Developers involved in HUD-affiliated projects might also need to align their policies with these new regulations, ensuring that their properties are accessible to individuals with criminal histories who are otherwise qualified for tenancy. This could mean reassessing existing policies and potentially collaborating with organizations that support individuals with criminal records in their reentry process. 

Overall, these actions by HUD represent a significant shift towards a more inclusive approach to housing, especially for individuals with criminal records. By removing barriers and emphasizing rehabilitation and community reintegration, HUD aims to create stronger, safer communities while upholding the principles of fair housing. 

After a six-month review department-wide by Marcia Fudge, HUD suggested public housing authorities and HUD-affiliated developments not deny housing to eligible renters “simply based on the presence of a criminal conviction,” to consider the amount of time since a conviction or arrest and allow formerly incarcerated individuals to provide evidence that proves their improvement and stability.  

“This Fair Housing Month and Second Chance Month, HUD recognizes that current criminal justice and housing policies have denied those seeking rehabilitation the ability a chance to lead better lives,” said HUD Secretary Fudge. “A year ago, I called on HUD programs to conduct a policy review of ways that we can remove barriers to safe, affordable housing for people with criminal history records. As we execute our action plan, I invite state and local housing agencies, owners, and property managers to partner with HUD to remove barriers to housing to people with criminal records and support people’s successful reentry to the community. Research shows that providing safe and affordable housing and supportive services so that people succeed during reentry makes our communities stronger and safer.” 

These changes, while primarily focused on enhancing access to housing for individuals with criminal records, will require a concerted effort from various stakeholders, including public housing authorities, property managers, and developers, to successfully implement and adhere to these new guidelines and principles. 

April’s announcement was not the first time in recent history that the subject of implementing criminal history policies has been brought to the forefront of discussions regarding multifamily housing and the potential for Fair Housing Act violations. In 2016, the “Office of the General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate Transactions” was issued, and in it, HUD urged housing providers to exercise caution when implementing criminal history policies or practices for use in making housing decisions. 

This guidance was released in response to the Supreme Court decision which held that disparate impact claims are cognizable under the Fair Housing Act. Technically, those with criminal records are not a protected class under the act, however, HUD stressed that criminal history-based barriers to housing have a statistically disproportionate impact on minorities, which are a protected class under the Act. 

According to the SCOTUS Blog, written by Paul Hancock and Andrew C. Glass, “On June 25, 2015, the Supreme Court, by a five-to-four margin, upheld the application of disparate impact under the Fair Housing Act (“FHA”) in Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc. While upholding the theory, the Court imposed significant limitations on its application in practice. 

In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations. The Court, however, imposed important limitations on the application of the theory “to protect potential defendants against abusive disparate-impact claims.” In particular, the Court held that a racial imbalance, without more, cannot sustain a claim, and directed lower courts to “examine with care” the claims at the pleadings stage. The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.” Finally, “remedial orders” must “concentrate on the elimination of the offending practice” through “race-neutral means.” 

What exactly is “disparate impact?” Disparate impact is a critical concept in anti-discrimination law, particularly in the areas of employment and housing. It addresses situations where policies or practices that appear neutral and non-discriminatory on their face have the unintended consequence of disproportionately negatively affecting a specific group of people. The concept of disparate impact is integral to understanding and addressing subtle forms of discrimination that can pervade various aspects of society, despite not being overtly intended to discriminate. 

Unlike disparate treatment, which is deliberate, disparate impact occurs without the intent to discriminate. It’s often the result of seemingly neutral policies that inadvertently lead to unequal outcomes for certain groups. 

Multifamily Residential Property Owners, Developers, and Potential Impacts 

To address the topic of how multifamily residential property owners qualify for rulemaking to modify regulations governing Public Housing Agencies (PHAs) and HUD-subsidized housing providers, it’s important to understand the regulatory framework, the stakeholders involved, and the potential impacts of such changes. 

Regulatory Framework 

The U.S. Department of Housing and Urban Development (HUD) oversees and regulates public housing and HUD-subsidized housing. This includes setting policies and regulations that govern PHAs and multifamily residential property owners who receive HUD subsidies or support. These regulations cover a wide range of areas, including tenant eligibility, rent policies, building maintenance standards, and more. 

Stakeholder Qualifications for Rulemaking 

Multifamily residential property owners can play a role in rulemaking, primarily through providing feedback during the public comment periods that HUD and other regulatory bodies hold when proposing new rules or modifications. However, their direct authority to initiate changes to existing regulations is limited. They can influence rulemaking by: 

• Participating in Public Comment Periods: HUD often solicits comments from the public, including property owners, before finalizing regulations. 
• Engaging with Industry Associations: Many property owners join industry groups that lobby for regulatory changes beneficial to their interests. 
• Collaborating with Local Governments and PHAs: By working with local authorities and PHAs, property owners can push for changes that align with local needs and priorities. 

Perceived Impact of Rule Modifications 

The impact of modifying regulations governing PHAs and HUD-subsidized housing providers can be significant, affecting various stakeholders: 

• Tenants: Changes could impact tenant protections, rent affordability, and quality of housing. 
• Property Owners: Modifications might affect compliance costs, profitability, and the ability to manage properties effectively. 
• PHAs: Changes in regulations could alter how these agencies administer housing programs and interact with both tenants and property owners. 
• Local Communities: Modifications can influence the overall availability and quality of affordable housing in a community. 

Potential Areas of Impact 

1. Fair Housing and Non-Discrimination Policies: Changes could affect how property owners ensure equal access to housing.
2. Rent Policies and Subsidies: Adjustments might impact how rents are calculated and the level of subsidies provided.
3. Building and Maintenance Standards: Modifications could change the standards that properties must meet, affecting safety and living conditions.

Ultimately, multifamily residential property owners play a critical but indirect role in the rulemaking process governing PHAs and HUD-subsidized housing. Their influence is exercised through public commenting, lobbying, and collaboration with local entities. The potential impact of regulatory modifications is wide-ranging, affecting tenants, property owners, housing authorities, and the broader community. Staying informed through reliable sources is crucial for all stakeholders involved in this complex and ever-evolving field. Additionally, as with any governmental body, changes may be made depending on who is in the seats of power, and policies may be changed or reversed.  

Numerous housing providers and Public Housing Agencies (PHAs) have already embraced key principles that significantly enhance or maintain public safety in their communities.  

HUD is not only focused on removing obstacles to accessing HUD housing assistance but is also committed to introducing innovative tools and resources. These are designed to bolster HUD programs’ support for individuals transitioning back into the community from prisons and jails. A prime example of this initiative is HUD’s spotlight on communities utilizing Community Development Block Grants to offer essential reentry services and programs. These include counseling and legal aid, as well as collaborations between PHAs and other entities to facilitate housing assistance for those rejoining the community. 

Additionally, HUD is set to showcase how Emergency Solutions Grants and Continuum of Care Program grants can be leveraged to develop housing models aimed at mitigating homelessness among formerly incarcerated individuals. Collectively, these strategies not only reinforce communities, but can also make them more secure and resilient. 

The upcoming proposals from HUD are intended to be a stride towards embedding protections against housing discrimination into law. Through these efforts, HUD has made clear that it is dedicated to ensuring safe and community-focused paths for rehabilitation and reintegration, marking a significant step forward in fostering inclusive and supportive environments for all citizens, including those returning from incarceration. 

Assessment of Multifamily Residential Criminal Screening Practices and Potential FHA Violations 

Multifamily residential community owners and managers need to be vigilant in ensuring their criminal screening practices do not violate the Fair Housing Act (FHA). The FHA prohibits discrimination in housing based on race, religion, sex, disability, familial status, or national origin. In recent years, there has been an increased focus on how criminal background screening might inadvertently lead to discrimination, particularly against minority groups. 

To assess whether their criminal screening practices are in compliance with the FHA, property managers and owners should consider the following: 

1. Avoid Intentional Discrimination: This includes not applying criminal background policies inconsistently based on an applicant’s race or national origin. For example, advising only certain racial groups about a criminal record screening policy or rejecting applicants of one race based on their criminal record while accepting applicants of another race with a similar record.
2. Beware of Unjustified Discriminatory Effects: Policies should not have a disparate impact on protected classes. This means that a policy should not disproportionately impact individuals based on their race, color, national origin, religion, sex, familial status, or disability. For instance, a blanket policy that excludes anyone with a criminal record could disproportionately impact certain racial or ethnic groups.
3. Reasonable Accommodations for Persons with Disabilities: When the disability of an applicant or tenant contributed to their past criminal conduct, they may request an exception to the criminal background screening policy as a reasonable accommodation. Housing providers should consider any mitigating circumstances that may reduce or eliminate the threat, such as engaging in treatment or therapy.

4. Individualized Assessment: Instead of blanket exclusions based on criminal history, housing providers are encouraged to conduct individualized assessments. These assessments should consider factors such as the nature and severity of the criminal activity, the time elapsed since the conviction, and evidence of rehabilitation.
5. Research and Best Practices: Research indicates that criminal history is not always a reliable predictor of tenancy issues. Therefore, limiting criminal records screening to the minimum statutory requirements is recommended to avoid potential violations of the FHA.

For multifamily residential community owners and managers, it’s essential to stay informed about legal standards and best practices. They should seek legal advice and consider participating in fair housing training programs to ensure their policies are compliant and do not unintentionally discriminate against any group. The guidance and information provided by HUD and the National Multifamily Housing Council (NMHC) can serve as valuable resources in this endeavor. 

Implementation of Safe, Effective, and Proactive Security Can Help Mitigate Risks and Ease Concerns 

As with any change in industry standards, there may be resistance from stakeholders. Residents may be concerned about the integration of formerly incarcerated individuals into their community. Property owners and managers may also be concerned about how to safely maintain their properties, common spaces, and other community assets without violating legal standards or facing legal ramifications for unintended discriminatory practices. 

Throughout the multifamily industry, trespassing, property damage and liability risks, repetitive crimes such as carhopping and vehicle theft, and vandalism can prove to be a constant headache. As a result, multifamily communities deploy a variety of security solutions to mitigate or deter these behaviors and liabilities- expensive guard services, courtesy patrols, gates, access codes, surveillance cameras- and while they can be effective, there are still many criminal and unwanted behaviors that easily slip through the cracks. 

Implementing live video monitoring solutions like those offered by Stealth in multifamily residential communities offers several benefits that can significantly enhance security and mitigate risks. The primary advantage of such a system is the creation of a multi-layered security approach, with video surveillance and remote monitoring acting as key components. 

Deterrence of Crime: The mere presence of security cameras may serve as a deterrent to potential criminal activities. Individuals who are aware they are being monitored are less likely to engage in unlawful behavior, which often results in reducing the likelihood of crimes occurring within the community. 

Proactive Security Solution: Remote video surveillance is a proactive approach to security. Unlike passive systems that only record events for later review, Stealth’s live video monitoring solution can help detect and respond to incidents in real-time. This immediacy is crucial in preventing or minimizing damage and ensuring quick response to any security breaches. 

Integration of Technology and Human Oversight: The combination of video analytics and human monitoring operators creates a more efficient and effective security system. Video analytics automates the surveillance process by scanning for specific scenarios, such as unauthorized presence on the property at unusual hours. When such a scenario is detected, human operators are alerted to assess the situation and can take appropriate action. 

Immediate Response and Law Enforcement Interaction: In the event of a security breach, monitoring operators can intervene immediately. This can include issuing audible warnings via onsite speakers and, if necessary, contacting law enforcement for rapid response, ensuring that any suspicious activity is promptly addressed. 

Beyond Crime Prevention: The benefits of live video monitoring extend beyond preventing crime. The footage can be invaluable for training purposes, helping organizations enhance their operational efficiency and safety protocols. It can also identify potential hazards, thus aiding in risk management and reducing the likelihood of liability lawsuits due to accidents or negligence. Live video monitoring can also help to produce recordings that will aid in scenarios such as identifying problem residents, determining which residents or guests may be in need of fines for inappropriate usage or damage to property or amenities, resolving parking issues, and more.  

Live video monitoring in multifamily residential communities is not just about preventing crime; it’s a comprehensive tool that enhances overall security, improves operational efficiency, and helps in risk management, making it a valuable investment for community managers and owners. Interested in learning more about how Stealth’s live video monitoring solution can elevate your security strategy at a cost of up to 60% less than traditional guards? Contact us today and speak with a multifamily residential security specialist for a free quote.  

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