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Landlords have a lot of power. They can, for example, deny renters’ applications for housing for a slew of reasons, including having a criminal history. Now, the Trump administration wants to take away one of the only tools available to people with criminal records in their fight for fair housing — and give landlords even greater ability to discriminate.

Under federal law, people can sue landlords if they're denied housing based on their criminal histories — particularly if the crime is old or unrelated to housing. But the Department of Housing and Urban Development (HUD) proposed a new rule last month that would give landlords a free pass if they hired a third-party company to vet their applicants, which as many as 90% of landlords do, according to experts. The companies use software to analyze prospective tenants’ credit and criminal histories and give landlords a recommendation about whether to offer them a lease.

The new rule, which could go into effect as early as October, would allow landlords to avoid legal liability for acting on the recommendations provided to them — even in cases where they deny housing to someone with a decade-old shoplifting charge. And those decisions could disproportionately affect people of color and turn deny housing to those who need it the most.

“If you take away all these restrictions, and give landlords carte blanche to just turn people down willy nilly for whatever they want ... it’s going to fall on people who have those records more often,” said Eric Dunn, the National Housing Law Project’s Director of Litigation. “So it’s going to be African Americans, it’s going to be Latinos.”

While people with criminal histories aren’t a protected class under the Fair Housing Act, the seminal 1968 law that still guides housing law today, previous presidential administrations have tried to make discriminating against tenants more difficult.

"It is a form of proxy discrimination to prohibit someone solely based on their possession of a criminal record."

In 2016, for example, then-HUD chief Julian Castro issued guidelines about blanket policies refusing to rent to someone based on their criminal history. They could, in some cases, violate federal law, because race is a protected class and people of color have disproportionately high incarceration rates. (African Americans, for example, are incarcerated five times more frequently than white people.)

But when current HUD Secretary Ben Carson announced the proposed change, he argued the new rules would clarify the law.

“At the end of the day, this rule not only increases Americans’ access to fair and affordable housing, but also permits businesses and local governments to make valid policy choices,” he said.

But the algorithms tenant screening companies use to make rental decisions on behalf of landlords are inherently discriminatory, according to experts. That’s because the “risk factors” they use to judge an applicant’s rental worthiness include factors like credit history and eviction records, both of which incarceration can affect.

For example, nearly half of all people convicted of a crime are unable to pay the court fines and fees and become saddled with debt, research by a coalition of prison reform groups shows. And when people are incarcerated, they can’t build credit or make existing payments, which lowers their credit scores.

“The common thread logically is that, because our system of mass incarceration disproportionately targets African Americans, it is a form of proxy discrimination to prohibit someone solely based on their possession of a criminal record,” Wanda Bertram, a staffer at the Prison Policy Initiative, said.

A spokesperson for HUD declined to comment.

Green flag, red flag

Pre-internet, landlords who received written applications from prospective tenants had to do their own recon. But the use of rental screening companies has exploded over the last two decades.

As more personal information became available online, the tenant screening industry boomed: Background check companies started to offer screening reports with 50-state searches of criminal histories and eviction records.

As more of these companies began to pop up, they also needed to distinguish themselves from others on the market. So some of them started to tell landlords that, not only would they provide them with background information about the prospective tenant, they would also provide landlords with a decision about whether they should rent to a certain applicant.

“The landlord will basically just get basically a green flag: rent to the person, or red flag: turn them down. And the landlord may not have access to information that’s based on,” Dunn said.

In some cases, that means tenants are turned away from housing for having once committed a crime that isn’t housing related, or one so old that they give no indication about the kind of person you’d be renting to, Dunn said.

But in March, a federal judge in Connecticut ruled that, because tenant screening companies make rental recommendations on behalf of landlords, they have to comply with fair housing laws.

The decision came after a housing advocacy organization sued tenant screening company CoreLogic, which suggested that a disabled Latino man should not be allowed to move in with his elderly mother because he had a “disqualifying criminal record.” But the extent of that criminal record was a shoplifting charge that was later dropped.

HUD’s new proposal would undermine the precedent set by that case, though a coalition of national housing nonprofits have already launched a campaign to fight the administration’s proposal.

“Obviously, it has very significant implications for the future of rental screening,” Dunn said. “Because really, fair housing laws are the only real regulations that impose any kind of limits on who housing providers can accept and turn down.”