Michigan Reentry Law Wiki

Letter on Potential Disparate Impact of Terminating Housing Based on Felony Record

From Reentry

May 17, 2010

James White
Assistant Property Manager
Apartment Complex
1111 Apartment Drive, SE
Grand Rapids, MI 49548

Dear Mr. White:

On May 7, 2010 you sent a letter to Jane Doe indicating that the month-to-month tenancy was being terminated, and that all occupants must vacate Apt. XX by June 13, 2010. When John Doe inquired why the lease was being terminated, he was told that Apartment Complex had conducted a background check, and was terminating the lease based on the fact that Mr. Doe has a felony record. It is Mr. Doe’s understanding that Apartment Complex has adopted a new policy that it will not rent to individuals with felony convictions, and is terminating the tenancies of everyone with such records. If Apartment Complex is indeed engaging in such action, that would violate the Fair Housing Act. Moreover, it appears that Apartment Complex violated that Fair Credit Reporting Act in its dealings with Mr. Doe.

Mr. Doe, who is African-American, has lived at Apartment Complex Apartments for almost ten years, since September 2000. His criminal record, which pre-dates his tenancy, involves several drug offenses and a conviction for carrying a concealed weapon. The last of these offenses occurred fifteen years ago, in 1995. It is my understanding that Mr. Doe had been a good tenant during the decade that he has lived at Apartment Complex.

The Fair Housing Act (FHA), 42 USC §§3601 et. seq., prohibits discrimination in rental housing based on race. The FHA is violated not just by individual acts of racially motivated discrimination, but also by policies that appear neutral but have a discriminatory effect, or “disparate impact,” on people of color. See e.g. Metropolitan Housing Development Corp. v. Village of Arlington Heights, 558 F.2d 1283, 1288 (7th Cir. 1977). Because disproportionate numbers of African-American persons have criminal convictions, they are disproportionately affected by policies that bar persons with conviction records from housing. In other words, such policies have an impermissible “disparate impact” on African-Americans.

As you may know, most courts use a burden-shifting analysis when evaluating Title VIII (FHA) claims. This approach was developed by drawing on the methods used to review employment discrimination claims brought under Title VII. With regard to the first step of the analysis – demonstrating that “an outwardly neutral practice … has a significantly adverse or disproportionate impact on minorities,” Fair Housing in Huntington Committee, 316 F.3d 366 (2d Cir. 2003) – it is clear that no-felon policies disproportionately affect people of color. Note that proof of disproportionate impact is sufficient; there is no requirement under a disparate impact claim to show an intent to discriminate.

With regard to the second step of the analysis, a landlord may overcome the prima facie by demonstrating that its actions “furthered … a legitimate bona fide governmental interest,” and by showing “that no alternative would serve that interest with less discriminatory effect.” Id.

While I recognize that criminal records can sometimes be relevant to a tenancy, there is no justification under the FHA for a policy that excludes anyone with a felony record. In the context of employment claims under Title VII, courts have required that employers consider criminal records on a case-by-case basis, rather than adopting blanket felony bans. See e.g. Green v. Missouri Pacific Railroad Co., 523 F.2d 190, 1292 (8th Cir. 1975); Gregory v. Litton Systems, Inc., 316 F. Supp. 401 (C.D. Ca. 1970); aff’d 472 F.2d 631 (9th Cir. 1972). Similarly, in the context of claims under Title VIII, what is required is a case-by-case assessment of an individual’s criminal record, and its implications for that person’s tenancy. Such individualized review would adequately address a landlord’s safety concern with less discriminatory effect than a blanket ban. Moreover, such individualized review is clearly feasible, particularly with respect to established tenants.

Applying this standard to Mr. Doe, it is clear that Apartment Complex’s actions cannot stand. Mr. Doe’s offenses occurred over fifteen years ago. He has been a good tenant for ten years. There is no reason to believe his criminal record would suddenly make him an unsuitable tenant going forward.

In addition to violating the Fair Housing Act, it appears that Apartment Complex has violated the Fair Credit Reporting Act (FCRA) by obtaining a report on Mr. Doe. That report was apparently obtained from Lexis Nexis. Apartment Complex did not obtain permission from Mr. Doe to obtain this report. Criminal background checks are considered credit reports under FCRA, and therefore can only be obtained by obtaining the individual’s permission or by meeting one of the purposes outlined in 15 USC §1681b. Since this report did not relate to a rental application, but rather to an ongoing tenancy, it is questionable whether any of the purposes in 15 USC §1681b apply.

In any event, because Apartment Complex took an “adverse action” based on the report, it was required under 15 USC §1681m to provide an “adverse action notice” outlining the action taken, the contact information of the agency that prepared the report, and other information, as outlined in FCRA. Apartment Complex failed to provide the required notice.

Finally, Mr. Doe asked for a copy of his entire tenant file, but it was not provided. Please provide me with his file. In addition, please provide me with a copy of your policy regarding the admission and/or tenancy termination of individuals with criminal records.

I hope that we can resolve this matter. I look forward to hearing from you.


Miriam Aukerman
Reentry Law Project

cc: Doe

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