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Disparate Impact: What does this mean for screening?

Disparate Impact: What does this mean for screening?
If you Google Fair Housing Act, Anti-Discrimination, or Disparate Impact, you will see a barrage of articles outlining the controversial Texas case facing the Supreme Court, challenging a ruling concerning the Fair Housing Act and the theology around “disparate impact.” The case, Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.1,  is causing quite a ripple in the multifamily industry. The location of housing developments, the granting of loans and tax credits, the screening of potential residents could all change depending on the final ruling. In my opinion, the case is going to spark some major changes in the industry around legal screening practices. Therefore, I think it’s a good time to revisit leasing practices and audit processes to ensure your community is FHA compliant, whether you are a single-housing landlord, or multifamily community manager. Here are some areas to check in the meantime: Marketing Practices: Are any of your marketing messages discriminatory? Are you diverse in your advertising? Do you promote all facets of your community as non-discriminatory? Screening Practices: Are your screening solutions compliant with FHA procedures? Does your screening interface allow you to apply applicant criteria uniformly? Messaging Practices: Is your leasing team FHA compliant in their treatment of all residents? Are your properties communicating fairly to all individuals, regardless of race, religion, sex, national origin, familial status, or disability? Now is the time to do an audit of your properties’ FHA compliance. The TDHCA v. ICP case is controversial on many grounds and people are worried on all ends of the ......
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The Clock is Ticking...

…on “disparate impact” as a legal standard in fair housing cases.  Those of you are keeping up on the boring-sounding, non-sexy “disparate impact” issue in housing know that the impact of having disparate impact as part of the fair housing laws would be significant.  Kind of like being whapped upside the head for the multifamily housing industry.  (For those of you who are not familiar with this concept, there are many articles and opinions out there on this, including some previous blog postings from yours truly right here at MFI.)

 

The “need to know” at the moment is that the United States Supreme (yep, the Supreme Court) has agreed to hear the case of Township of Mount Holly vs. Mt. Holly Gardens Citizens in Action in the fall.  Arguably (word play!) we will find out once and for all whether disparate impact should be actionable as a fair housing violation (think criminal background checks being unlawful, for example). 

 

We can only hope that when the ticking is through that the alarm does not go off for our industry and that we have a rude awakening.

 

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Could You be in Violation of Fair Housing Laws Without Even Realizing It?

b2ap3_thumbnail_RCauley.jpgAs we all well know, the Fair Housing Act prohibits any type of discrimination from Real Estate Professionals when choosing who to rent their property or unit to in regards to race, gender, sexual orientation, disability, family status or national origin, and in some counties: section 8 voucher status (tenantsunion.org). But what about disparate impact?   Disparate impact is the legal theory that people of certain races and ethnicities are disproportionately represented in the criminal justice system. This theory was previously used in regards to employment, but in recent years has moved into the real estate industry as well. The theory states that the use of criminal records for tenant screening purposes has a disparate impact on certain minorities who have been disproportionately represented in the legal system, and who therefore have criminal records that could be used to determine that they should not be rented to. Fair Housing Advocates argue that in effect, while you may be following all Fair Housing Laws, and screening every applicant, you could be inadvertently discriminating against certain minorities (Wikipedia). The Landlord Times gives a great example: “…a property management company has a policy of charging a set rental amount for the first three residents in a household, plus $100 per month for each additional resident. This policy, although applied equally to all applicants and residents, will have a disproportionately negative effect on families with children, and thus likely violates fair housing laws. Similarly, a policy of denying rental to everyone who has any criminal recor......
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