The enforcement of the Fair Housing Act continues to evolve over time as certain issues come more into focus for federal authorities. A recent case, United States v. Suburban Heights LLC, Crestline Property LLC, Try Line Properties LLC, and Jingle Properties LLC, underscores the importance of fair and compliant policies when screening potential tenants, especially ones with a felony conviction. This case brings attention to how seemingly neutral practices, such as criminal history screening, can lead to claims of racial discrimination under fair housing laws.
Overview of the Case
This lawsuit, filed in October 2024, involves allegations of racial discrimination stemming from the criminal history screening policies of several Missouri-based property management companies. The U.S. Department of Justice accused the defendants of enforcing a blanket policy that disproportionately impacted Black applicants. According to the complaint, the policy explicitly barred individuals with any felony conviction from renting at their properties, without specifying the types of offenses or providing a lookback timeframe. This practice allegedly remained in place for approximately nine years.
Discriminatory Impact of Blanket Felony Conviction Policies
Statistical data reveals that Black individuals are incarcerated at significantly higher rates than their White counterparts, both nationally and in St. Louis, where the properties in question are located. For instance, Black residents in St. Louis City and County are over five times more likely to be incarcerated than White residents. Consequently, policies like the one implemented by the defendants disproportionately excluded Black applicants, particularly in a city where such housing represented a substantial portion of the local rental market.
The DOJ’s investigation included phone and email testing, in which individuals posing as prospective tenants disclosed felony convictions from 10 and 11 years ago. In both cases, the property staff reportedly informed the testers that their applications would be denied based on the property’s criminal history criteria, effectively reinforcing the blanket ban.
The Fair Housing Act and Criminal History Screening
While the Fair Housing Act does not prohibit the practice of criminal background screening, it does mandate that such policies do not result in discriminatory effects on protected classes, including race and national origin. Blanket bans that fail to account for the age or nature of the offense or the applicant’s individual circumstances have undergone intense scrutiny by HUD and the DOJ in the last several years.
The defendants may argue that their policy was designed to protect the safety and well-being of residents. However, fair housing laws require that screening policies must be narrowly tailored and demonstrate that no less discriminatory alternatives exist to achieve the same objective. In this case, the blanket nature of the policy—devoid of any individualized assessment—makes it challenging for the defendants to justify its necessity.
Evolving Practices and Alternatives For Felony Convictions
One viable alternative is the adoption of individualized assessments, a best practice encouraged by HUD. Such assessments would require property managers to consider factors such as the severity and nature of the offense, the time elapsed since the conviction, evidence of rehabilitation, and any other mitigating circumstances. Limiting the look-back period for certain offenses and documenting decisions thoroughly are also essential components of a compliant screening policy. These practices help balance legitimate safety concerns with the need to avoid discriminatory outcomes.
Lessons for Property Managers
This case is another example of how criminal history screening policies are being targeted by fair housing enforcement agencies. For property managers, the key takeaways include:
- Avoiding blanket policies that categorically exclude applicants based on criminal history.
- Implementing individualized assessments that account for the context and timing of convictions, as well as evidence of rehabilitation.
- Staying informed about changes in fair housing laws at both the federal and state levels to ensure compliance.