Posts filed under ‘Regulatory Issues’

The Impact of Disparate Impact – Your Screening Procedures May Need Revising NOW

The following is an email sent this morning (4/4/16) by AANC Executive Director Will Brownlee:

HUD Secretary Announces Guidance Regarding Excluding Persons with Criminal Records and Landlord Use of Blanket Bans/Denials

Dear NC rental industry leaders:

 It appears HUD is kicking off Fair Housing Month with a bang.  From the New York Times this morning (thank you Tom and Mary Gwyn for forwarding):   http://www.nytimes.com/2016/04/04/nyregion/federal-housing-officials-warn-against-blanket-bans-of-ex-offenders.html?emc=eta1

Ever since last summer’s U.S. Supreme Court decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project and the Court’s formal endorsement of a disparate impact fair housing standard, industry watchers have tried to anticipate what may be the next Fair Housing shoe to drop for the housing industry.  This appears to be it.   Based on the information contained in the article and in HUD’s Guidance (see link below), it would appear that criminal screening standards may, by necessity, need to become more nuanced to be viewed as fair housing compliant.

A full copy of the HUD Guidance, released this morning, can be found here:  http://portal.hud.gov/hudportal/documents/huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf .

Key takeaways after reading the Guidance, which appears at first blush to be something of a frontal assault on the industry’s use of criminal screening for applicant denials:

Although the specific interest(s) that underlie a criminal history policy or practice will no doubt vary from case to case, some landlords and property managers have asserted the protection of other residents and their property as the reason for such policies or practices. Ensuring resident safety and protecting property are often considered to be among the fundamental responsibilities of a housing provider, and courts may consider such interests to be both substantial and legitimate, assuming they are the actual reasons for the policy or practice. A housing provider must, however, be able to prove through reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property. 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 . . . .

 In most instances, a record of conviction (as opposed to an arrest) will serve as sufficient evidence to prove that an individual engaged in criminal conduct. But housing providers that apply a policy or practice that excludes persons with prior convictions must still be able to prove that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. A housing provider that imposes a blanket prohibition on any person with any conviction record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet this burden . . . .

 A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not. A policy or practice that fails to take into account the nature and severity of an individual’s conviction is unlikely to satisfy this standard. Similarly, a policy or practice that does not consider the amount of time that has passed since the criminal conduct occurred is unlikely to satisfy this standard, especially in light of criminological research showing that, over time, the likelihood that a person with a prior criminal record will engage in additional criminal conduct decreases until it approximates the likelihood that a person with no criminal history will commit an offense . . . .

Section 807(b)(4) of 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 section 102 of the Controlled Substances Act (21 U.S.C. 802).”37 Accordingly, a housing provider will not be liable under the Act for excluding individuals because they have been convicted of one or more of the specified drug crimes, regardless of any discriminatory effect that may result from such a policy . . .

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. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad 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, and therefore such a practice would violate the Fair Housing Act.

At first blush, it would appear that this Guidance practically mandates that the housing providers consider adopting much more nuanced criminal screening policies, ones that take many different factors into account, as this HUD Guidance effectively renders blanket denials for criminal history a thing of the past – with the specific exception of a conviction involving the manufacture or distribution of illegal drugs.  At a minimum, this Guidance should be considered required reading by both industry professionals and their respective legal counsel for Fair Housing Compliance and risk assessments moving forward.

Will Brownlee
Executive Director & General Counsel
AANCLogo

Advertisements

April 4, 2016 at 3:17 pm 1 comment

Emotional Service Animal Toolkit

Right now the PTAA office is getting more questions about emotional service animals than any other operational topic, and it seems that’s a national trend. The National Apartment Association has put together an Emotional Service Animal Toolkit to help address those questions and you can find a link to it and related info at their website.

It’s a great resource for all apartment industry professionals.

Here’s the link to a PDF version of the toolkit itself: http://www.naahq.org/sites/default/files/naa-documents/government-affairs/NAA-ESA-Toolkit-FINAL.pdf

March 31, 2016 at 4:48 pm 1 comment

Underlying Factors In the Housing Affordability Policy Debate

Ken Szymanski, the Executive Director of the Greater Charlotte Apartment Association, has written an outstanding piece on the underlying factors contributing to the housing debate in Charlotte, and many of them apply to us here in the Triad. Some key points are excerpted below, but you really should read the full piece here.

  • Moderate-, middle-, and upper-income households are served perfectly well by the dynamics of the marketplace. But low-income households cannot be served by the marketplace because their buying power is too low. That fact always has and always will generate social and political reactions, because those households are cost-burdened and have to deal with problems of housing quality and overcrowding…
  • At all levels of government—federal, state, and local—for many decades the political will has generally been lacking to materially increase this subsidy coverage of 25 percent. To quote Joseph Califano, a Cabinet secretary under President Jimmy Carter, “You can only go ‘so far’ at redistributing wealth.” We have not seen the political will to spend the money that would increase this materially. Regardless of who the HUD secretary was or whether the person in the White House was an “R” or a “D,” the appetite of elected or appointed officials—or the general public—is not there to go much over 25 percent…
  • State government has a role.  The N.C. Housing Finance Agency has been the state administrator of the federal Low Income Housing Tax Credit program.  The federal tax credit program was created in 1986 and generally aims to house those whose income is at or below 60 percent of the area median income level. 
  • The federal government has a role. Formerly, the role of the federal government was to fund public housing and provide below-market interest rate mortgages for multifamily rental housing. The role has been substantially diminished in recent years…
  • Inclusionary policy for new development/mixed-income housing has not attracted developers. Nearly three years ago, the Charlotte City Council approved a voluntary affordable housing “density bonus” for developers. If a developer wanted to build in affluent areas, the city would allow it to build extra units if it included some apartments or homes for low-income residents. But no developer has participated in the program, and the city may be starting over. A number of misconceptions underlie the city’s current inclusionary housing policy, including: a misunderstanding of the importance of return on cost in development feasibility; an overestimation of economies of scale in construction; a stereotype that private developers want to discriminate against poor people.

  • “Source of Income” civil rights issue. Somewhat akin to the inclusionary policy for new development are calls to mandate the acceptance of Section 8 (housing choice) vouchers in existing communities. Some advocates are attempting to make the market-rate rental sector shoulder a disproportionate burden of the city’s affordable housing crisis by making it “discriminatory” for a housing provider to elect not to participate in the voluntary Section 8 program. Making Section 8 voucher administration more market-like, not passing a state “source of income” statute, is the proper way to improve the workability of the federal government’s major housing assistance program.

February 19, 2016 at 3:07 pm 1 comment

Emotional Service Animals a Problem Not Exclusive to Apartment Industry

NBC’s Today Show aired a segment about how airline passengers are abusing the emotional service animal designation in order to avoid paying airfare for their pets. From the story:

There are legitimate cases of people who need an emotional support animal in the air. But experts say that far too often, people are abusing the system to save a buck and get their pets onto flights for free.

“You get on an aircraft and the cabin looks like a barnyard,” said Hollis Gillespie, a former flight attendant. She said she’s seen snakes, birds and pigs. “Often it’s about the money, because one way to travel with a pet on some airlines can be up to $600, depending on the size of the animal.”

But if a pet is designated an emotional support animal, “it gets to come with you for free,” Gillespie pointed out. All you need is an emotional support vest on the animal and an official letter from a mental health professional.

And plenty of websites offer emotional support animal certifications; all you have to do is fill out a questionnaire.

Here’s a link to a full video of the story.

February 3, 2016 at 3:04 pm 1 comment

Miami Using EB-5 Visa Program to Finance Affordable Housing Development

The city of Miam, FL is taking a creative approach to addressing its shortage of affordable housing. They are tapping the EB-5 visa program to attract foreign development dollars:

The city will arrange for selected developments to be partially funded by a federal visa program known as EB-5, which grants green cards to foreigners who invest at least $500,000 in businesses or construction projects that create American jobs. The overwhelming majority of EB-5 investors are individuals from China eager to obtain U.S. residency…

Businesses seeking EB-5 funds typically contact middlemen—often lawyers—who run what are known as regional centers, which work with brokers in China and other countries to recruit investors, pool their investing dollars and funnel the money, often in the form of low-cost financing, to the businesses. The regional centers are paid a fee based on the amount of money they raise.

In the past year, Miami and a few other governments decided to create their own EB-5 regional centers, which allows them to select projects to help finance what would benefit the local community, charge a lower fee to the businesses and, in some cases, use the fees to supplement services such as police and firefighters…

Miami officials said they decided to start a regional center mainly to tackle its lack of affordable housing. According to an analysis prepared for The Wall Street Journal by the University of Florida’s Shimberg Center for Housing Studies, Miami-Dade County lost nearly 21,000 affordable apartments—or those that low- or medium-income people can rent without spending more than 40% of their income each month—from 2000 to 2012. In most cases, the buildings were torn down or converted to attract residents with higher incomes.

The city’s first development is actually an 83-story luxury tower, but they stated that it helped finance the creation of the regional center and that they expect many future projects to target affordable housing. In fact after getting wind of the program a veterans group and some members of the business community came out with a plan to build mixed use facility for veterans near the University of Miami hospital.

August 7, 2015 at 2:42 pm Leave a comment

Partners Ending Homelessness

On July 14, 2015 PTAA hosted a “Lunch and Learn” with Partners Ending Homelessness. The purpose of the meeting was to help educate landlords about how they can help end homelessness in Greensboro by getting involved with PEH’s Rapid Rehousing Program. In a nutshell they are looking to recruit apartment owners and managers who are willing to work with them to provide housing for the homeless population, but they stressed that they aren’t looking for charity. What they are looking for are apartment owners/managers who might be flexible on things like credit historPartnersEndingHomelessnessy or rental history in exchange for having guaranteed rent from a resident who is also receiving intensive counseling/assistance from case workers (see info at the bottom of this post).

If you have a property in Greensboro that might fit the bill for the Rapid Rehousing Program then you can get more information by contacting the folks at PEH. You can also talk to some PTAA members who are already involved with the program and hear first hand about their experiences. Just contact Jon Lowder at PTAA and he can help coordinate a meeting to make that happen.

You can also list any units you might have available, for free, at nchousingsearch.org run by the North Carolina Supportive Housing Program.

Here are the core components of the Rapid Rehousing program:

  1. Housing Identification
    • Recruit landlords to provide housing opportunities for individuals and families experiencing homelessness.
    • Address potential barriers to landlord participation such as concern about the short-term nature of rental assistance and tenant qualifications.
    • Assist households to find and secure appropriate rental housing.
  2. Rent and Move-in Assistance
    • provide assistance to cover move-in costs, deposits, and the rental and/or utility assistance necessary to allow individuals and families to move immediately out of homelessness and to stabilize in permanent housing.
  3. RRH Case Management and Services
    • Help individuals and families experiencing homelessness identify and select among various permanent housing options based on their unique needs, preferences, and financial resources.
    • Help individuals and families experiencing homelessness address issues that may impede access to housing (such as credit history, arrears, and legal issues)
    • Help individuals and families negotiate manageable and appropriate lease agreements with landlords.
    • make appropriate and time-limited services and supports available to families and individuals to allow them to stabilize quickly in permanent housing.
    • Monitor housing stability and be available to resolve crises.
    • Provide and assist the household with connections to resources that help them improve their safety, well-being, and housing stability.

 

July 14, 2015 at 6:40 pm Leave a comment

New HUD Rule Targets Segregation

On July 8, 2015 HUD finalized a new rule that targets segregation in communities that receive federal funds. From the Wall Street Journal:

The Department of Housing and Urban Development on Wednesday laid out a rule designed to ensure communities that receive federal funds strive to buck historical patterns of housing segregation.

Under the new rule, HUD will provide communities with historical data they must use to analyze segregation patterns, areas where race and poverty are concentrated, and access to good schools and jobs. Communities now will be required to submit these analyses to HUD, set goals for reducing segregation and track the results…

Local governments, states and public-housing authorities that receive federal grants are required to ensure that zoning and affordable-housing initiatives and other funding priorities advance the goals of the Fair Housing Act of 1968. The act aims to give everyone equal access to housing regardless of race, color, religion, sex, familial status or national origin.

But communities and housing authorities have received little direction from the federal government about how to create policies or measure their success.

“This is a very thoughtful attempt by HUD to come up with a rule that gives some teeth to a small provision of the Fair Housing Act,” said Amy Glassman, of counsel at Ballard Spahr LLP, which advises public housing authorities and other multifamily housing providers on fair-housing compliance and defends them in enforcement actions.

July 13, 2015 at 2:37 pm Leave a comment

Older Posts


Calendar

October 2017
S M T W T F S
« Jul    
1234567
891011121314
15161718192021
22232425262728
293031  

Posts by Month

Posts by Category