In deciding who to accept as new tenants, landlords typically use four kinds of screening criteria: previous rental history (including evictions), previous criminal history, credit scores, and whether the applicant meets a minimum income test. In the course of negotiating a settlement with a large property owner which in part involved reducing these screening barriers, HJC was struck with the arbitrariness of the screening criteria being used. As we investigated further the range of screening standards used by many different landlords, several things became clear : as to the standards within those criteria (which criminal violations disqualify, what credit score is sufficient, what income level is adequate, etc) there is no recognized set of best practices, and those standards vary widely among landlords. In short, the guidelines for deciding who to accept do not necessarily treat tenants fairly, nor do they necessarily do the job landlords want: predicting who will be a good tenant.
And further, standards unsupported by evidence can be discriminatory. HUD recently issued guidance on tenant screening with respect to criminal histories and the Fair Housing Act. Policies banning applicants for criminal histories that are overly broad and not sufficiently tailored can violate the Fair Housing Act, HUD declared. HUD’s guidance applied only to criminal records screening, however, the same reasoning applies to overly broad screening criteria when it comes to rental history, credit history or minimum income requirements.
HJC is now working with partner organizations to develop a set of evidence-based best practices with respect to screening criteria. The hope is that this project will produce a set of recommendations that treat tenants more fairly and will allow landlords to make choices that will do the job they want and be more defensible.