Back in 2001 our company set a screening criteria that we used with only minor adjustments since. (Copy Below) This was based on researching our failed tenants. At that time, we found that misdemeanor convictions and evictions appeared impactful if they occurred within the past three years and felonies for drugs and violence in the past seven years. I was surprised while reading HUD’s directive on the use of criminal records for screening that it references a report* that states the recidivism rate of criminals drops to the incidents of criminal activity in the general population at 6-7 years. I guess we got that one right from our own data, without the fancy formulas used by the researchers. 😉
Note that HUD permits and perhaps even encourage the lifetime rejection of persons with drug distribution and manufacture convictions. So it seems in HUD’s view, a kid with a misdemeanor possession with intent to distribute conviction can be excluded for is life, while the violent person only for a “reasonable” period of time and the habitual thief never. I question whether permitting the exclusion for drug crimes was done out of recidivism data or if it was a case of political will. I know people who have had drug issues and have overcome those problems to lead productive and successful lives. Many of those charged with possession with intent to deliver often are simply users or addicts selling small amounts to support their habits.
Back when researching our current criteria we recognized that some applicants with criminal histories did not cause future problems. How do you identify those who were not a risk, from those who are? We chose to accept those with a letter of recommendation from their PO despite having convictions. In the fifteen or so years since that policy has been in place, we found applicants with the PO recommendation have a failure rate below that of general applicants. It is unlikely that a PO would put their name to paper if they did not believe in the client.
Our company’s existing screening criteria seemed to be close to the requirements under the HUD April 4th directive. We had to modify it to exclude simple possession drug convictions and theft convictions as disqualifiers. While I believe that both are indicators of tenancies that may fail, neither are permitted today. We also reduced the lookback period on felonies from seven years to six. The report HUD based their finding on said 6-7 years. I do not want to be arguing over being at the top end. And finally, we added more options than PO letters, although PO letters will remain an automatic qualifier if our other criteria are met. Our revised criminal screening is attached below. Use it at your own risk if you wish and remember that I am just a landlord, not an attorney.
The part of the challenge is municipalities attempt to shift responsibility for criminal acts from the criminal to the owner of the house they live in through nuisance ordinances. These laws encouraged owners to have strict no criminal screening policies.
If you go to neighborhood meetings, you will find that most people who live in neighborhoods where your properties are located will be angry if you rent to anyone with a criminal history regardless of the charge or how long ago it was.
This attempt by HUD to solve a problem that was not created by the housing industry (discriminatory law enforcement) creates a solution that makes screening and complying with nuisance laws far more difficult and far more prone to litigation.
All this leads to a tough balancing act for the property owners – far more difficult and involved than simply trying to “beat the law.”
* Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology and Pub. Pol’y 483 (2006) (reporting that after six or seven years without reoffending, the risk of new offenses by persons with a prior criminal history begins to approximate the risk of new offenses among persons with no criminal record).
Affordable Rental Associates’ Revised Screening Criteria (To open the conversation, not for your use without your attorney’s review):
- Municipal Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: No convictions in 2 years.
- Misdemeanor Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: No convictions in 3 years.
- Felony Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: The latter of 6 years after conviction or 4 years after release from custody
- Unresolved Cases* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage or charges that may result in imprisonment for more than 15 days: Application will be considered after resolution of the case.
* Criminal record exception will be made for applicants with otherwise acceptable rental history and income upon positive written reference from their Parole Agent or other official on government letterhead. Other factors may be considered on a case by case basis. It is the responsibility of the applicant to supply any supporting information and documentation
Much of the conversation I hear about this new directive is about figuring out ways to beat the law. I’m sure we landlords will come up with something and our lawyers will try to protect us. But lets be realistic. Most rental policies look back 3-5 years. Each town is different, but most people returning from incarceration can only afford to live in low income neighborhoods. Much of this won’t apply to the higher end of the market.
Here is a little recognized fact. About 50% of the people leaving Wisconsin prisons are Caucasians! With the increase of drug felonies and prison time courtesy of the Heroin epidemic, more are released to places like Waukesha, Appleton, Wausau, Green Bay, Janesville, La Crosse, Stevens Point than ever before. Its true Milwaukee has a larger racial component that other parts of the state, but the fact remains, people returning from incarceration will likely live in rentals in the low income neighborhoods of your city. They make up a significant portion of the tenant pool. Figuring out a good way to bring these people back into the market is good business.
So why not define the best practices way of working with our tenants? HUD issued a letter [ Notice PIH 2015-19] in 2015 to the Public Housing Authorities doing just that for PHA’s http://portal.hud.gov/hudportal/documents/huddoc?id=PIH2015-19.pdf
Not all of this applies to us private landlords, but we can come up with our own list, run it by the attorneys, and Fair Housing. Please email me your thoughts at email@example.com.
In some neighborhoods the percentage of people without criminal history is much smaller than those that do.
Second interesting fact. Most people do not re offend. Recidivism is steadily going down in Wisconsin. Most of the people sent back to prison are for crimeless revocations, meaning that a P.O. sent them back because of a rule violation, not a new crime. While caution in rental practices is warranted, fear is not.
Lastly, Felons are among us!!! Its estimated that about 700,000 felons live in Wisconsin and they don’t all live in Milwaukee! But most will live in low income neighborhoods. People on supervision make better tenants than those who are not because the fear of going back is a greater influence on current behavior. They usually double up with family, friends, spouses, or partners. Anybody who owns property in these neighborhoods know the signs. So lets be the leaders we are and get in front of this!