1 Who’s In, Who’s Out: Tenant Screening Practices October 11, 2016

2 Our Mission: Housing is the foundation for success, so we collaborate with individuals, communities and partners to create, preserve and finance affordable housing.

3 Agenda Background Basic Components of a Tenant Selection Plan (TSP) HUD Guidance – April 4, 2016 Special Considerations for Supportive Housing Questions

4 Background: Why TSP Guidance?

5 Background Minnesota Housing has investments in properties throughout the state Minnesota Housing has adopted a strategic priority to prevent and end homelessness Households who have experienced homelessness are likely to have barriers to accessing housing: – Criminal backgrounds – Evictions – Poor credit and housing history

6 Guidance from Minnesota Housing Broad so it can apply to all multifamily properties funded by Minnesota Housing – Some funding sources have specific TSP requirements; this guidance does not change those requirements Consult an attorney to ensure TSP and application process complies with fair housing laws

7 Basic Components of a TSP Written Tenant Selection Plan – Housing providers should have a written TSP – TSP should be made available to applicants before they apply or pay an application fee Wait List – TSP should spell out any wait list process Eligibility Criteria – TSP should provide clear information on eligibility criteria, including income and program-specific requirements – TSP should state the processes and criteria that will be used to evaluate applications

8 Basic Components of a TSP Tenant Background/Credit Reports – Companies run background reports typically for a fee – Consumers have rights around the information Must receive notice with name of the company and a way to access that information

9 Basic Components of a TSP Notice of Denial – Give applicants a prompt written notice of denial that states criteria the applicant failed to meet Appeal Process – Any process should be clearly stated – Some programs require an appeal or meeting process; guidance encourages appeals as a way to obtain mitigating information

10 Basic Components of a TSP Domestic Violence/VAWA Applicants with Disabilities – Housing providers should provide a reasonable accommodation process – TSPs should not raise barriers to individuals with disabilities Tenant-Based Rental Assistance – As a condition of funding, housing providers cannot refuse to lease a unit to, or discriminate against, a prospective tenant because that tenant receives tenant-based rental assistance

11 HUD Guidance Issued in early April 2016 Fair Housing Act and Criminal Record Screening Provided guidance to housing providers on how to structure TSP policies regarding criminal background

12 HUD Guidance: The Issue Fair Housing Act prohibits discrimination on the basis of race, color religion, sex, disability, familial status, or national origin 100 million U.S. adults, nearly 1/3 of the population, have a criminal record – “Across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the population.” – Criminal records-based barriers to housing likely to have disproportionate impact on households of color

13 HUD Guidance: The Issue “[W]here a policy or practice that restricts access to housing on the basis of criminal history has a disparate impact on individuals of a particular race, national, origin, or other protected class, such policy or practice is unlawful under the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect.”

14 HUD Guidance: Arrests Arrests alone “do not constitute proof of past unlawful conduct” HUD indicates applicants should not be denied because of arrests (without conviction)

15 HUD Guidance: Convictions HUD does consider a conviction to be evidence of criminal conduct Encourages housing providers to distinguish between convictions that indicate a demonstrable risk to resident safety and/or property and those that do not – Applicants may be rejected for convictions of the illegal manufacture or distribution of certain controlled substances

16 HUD Guidance: Convictions HUD suggests that tenant screening policies take into account: – Nature and severity of a conviction – Amount of time that has passed Policy that considers mitigating information (as opposed to one with strict time limits) is less likely to be discriminatory: – Facts or circumstances re: conduct – Age of the individual at the time – Evidence of good tenant history before or after – Evidence of rehabilitation

17 Special Considerations: Supportive Housing Programs are intended to house people who often have poor credit, poor rental histories, or criminal backgrounds Guidance encourages housing providers adopt lenient and flexible criteria regarding common barriers – Consider mitigating factors such as potential benefit of housing and services – Considering mitigating factors in criminal history screening may also help limit barriers

18 Special Considerations: Supportive Housing Partnerships are key to developing and maintaining supportive housing Service providers can provide input on tenant screening policies, especially when starting the partnership

19 For More Information Contact: Shelley Bork Carrie Marsh