May 02

A reader suggests  (copy below) that much of the conversation regarding the new HUD directive on the use of criminal records in tenant screening is an attempt to  “beat the law.”  It is not.  Rather it is seeking to answer the question of how do rental owners reduce the disruption and danger of crime at their properties while also addressing the concerns of local governments and neighbors by avoiding renting to those prone to criminal activity.

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).

http://www.albany.edu/bushway_research/publications/Kurlychek_et_al_2006.pdf

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
Bill Writes

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 billtoday43@aol.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!

Apr 19
Over on  the ApartmentAssoc at YahooGroups list Bill Lauer wrote:
Since we use conviction records as a screening criteria, it is important to consider this in the larger societal context. The disparate impact issue starts way before someone applying for an apartment. This is a simplified version of a much longer story. The sex offender issue is different so lets make that a different discussion.
 
For example, Landlords use felony drug records to screen.  We now know that drug laws were written to unfairly punish one group over another.  For example, the sentencing differences between powder cocaine and crack cocaine.  First offenders with powder cocaine, used largely by white people, often times got off with probation.  Offenders with the same weight of crack, used largely by Black offenders, went to jail or prison. This is where the disparate impact begins.
 
Another example is the criminal  differences between alcohol use, used largely by whites,  and marijuana, used largely by young liberals and Blacks.  http://www.cnn.com/2016/03/23/politics/john-ehrlichman-richard-nixon-drug-war-blacks-hippie/
 
We know that cops overcharge so that “deals” can be made later in the process.  Deals usually come with reduced charges with higher fines in exchange for little or no jail time.  If you don’t have the money, you sit in jail. We know that if you had  the money for a lawyer  you could beat the charges and stay out of jail.  If you didn’t have the money, well, you went to jail, because there was nobody that could make the deal.  And of course, what groups don’t have the money for good lawyers?
 
So now enter the  Heroin epidemic. The current form has been going on for about 10 years, about 6 in Wisconsin.  It is largely affecting white middle class kids.  They go to treatment a few times, they go to prison for possession, maybe theft, prostitution, and burglary.  They come out as felons who can’t go home to their parents, they can’t get a decent job, nor decent housing. This is the push behind a lot of these changes, now, at this time. You can’t give the white kids a special deal for their medical condition of addiction without applying that equally across all protected classes.
 
 Also, the industry’s response to being made more responsible for tenants behavior, [starting 20 years ago] coupled with easy access to  records through the Internet have had a long term, unintended consequence that we as an industry, really need to look at.  As Tim says below, this is nothing that was not predictable.  But we weren’t proactive, so now we get to be reactive.
 
The wave of change in the criminal justice system that this HUD letter represents has got a lot of momentum. Its 25 years in the making.  Coupled with the pressure of governments to reduce the cost of prisons, we’ll see a lot more change in the upcoming 5 years as America empties its prisons.  And they all need a place to live.
 
Bill Lauer
 
I mean….If you follow Ron Johnson’s career, who in a million years would have guessed that he would be calling for more drug treatment, more action, spending more money on junkie, on national TV in WAUKESHA???????  Sitting  next to Tammy Baldwin!

Bill is right.  But this is wrong.

Yes, the HUD screening directive is in response to a criminal justice system that appears skewed against racial and social minorities.

The method chosen to correct the underlying problem completely ignores the cause.  Rather, the Federal Government and the Administration made screening more complex and litigious instead of addressing unequal enforcement of criminal and municipal laws. Sure in the most egregious situations like Ferguson you see the government step in.

In general, this is another issue forced upon owners who were not the cause. This is a lot like the lead paint situation where the government permitted the use of a known dangerous product for decades, even requiring its use for some federally funded housing, before leaving most of the cost and legal challenges in the lap of the property owners.

So now owners will have to walk even more of a tightrope – rejecting far less applicants for criminal records may keep HUD happy, but then you have to deal with nuisance property concerns and worries that someone you put in may harm other tenants, employees or neighbors.

Apr 05

On April 4th, 2016 HUD guidelines on the use of criminal records in tenant screening were released. This is a game changer that negates much of what was achieved with the crime-free portion of Wisconsin 2015 ACT 176. It also impacts all screening.

No longer can arrests be considered in screening. Convictions may be considered, but only those convictions that directly relate to the safety of the property or its residents.

“A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not”

Amazingly the directive does not appear to allow consideration of neighbors safety, only residents. So does this mean an axe murdering rapist drug dealing member of the local street gang must be allowed to rent any single family as long as they meet your income guides?

The real losers in this will be the law-abiding tenants and their neighbors

Apr 24

 

Over on the ApartmentAssoc Yahoo Group an owner asks:

The person who would occupy the second floor apartment is older, and I have no real accommodation for mobility issues… is there a polite / legal way to ask before hand since I wouldnt be able to put them in once the person is there (( is there a list / guide to requirements in this regard ? )). 

You should make sure the applicant understands what they are renting ‘This is a second floor apartment’ , but not is a tone to discourage them from renting.    Obviously you cannot say ‘I think you are too old to climb our steps.’  

As far as accessibility modifications, in general you are required to permit the reasonable modifications but are not required to pay for the modifications in pre 1991 housing.  You can require the tenant at the time of move out to restore it to how it was prior to adding the accessibility modifications.  However in most cases doing so would be foolish as you the mod could be a high demand attribute that would make your unit more desirable to other tenants with similar needs. 

Apartments built or substantially modified after 3/1/1991 are required to meet the ADA standards. If that standard was not met during construction, the owner must update it to the ADA requirements. Of course you may be able to sue the builder to pay for it. 😉 

Here is a real good guide to the reasonable modifications requirements

You are required though to make reasonable accommodations, which is different than reasonable modifications.  An example is assigning a parking spot closer to the door for a person with mobility issues if they request this.  

One reasonable accommodation request  that many owners get wrong – if a person is on SSI due to a disability and therefore receives their check on a day other than on the first, you must modify their rent due date and not charge late fees. [Case]

When you decide it is up to you to determine what may or may not work out for a prospective tenant is when you get in trouble. 

There is a Fair Housing case from La Crosse where a landlord refused to rent to a single mom because the property had a long drive that was the tenant’s responsibility to shovel, which the landlord felt would be difficult for her to do.  The landlady’s attempt to take it upon herself to determine what would or would not work for the tenant cost the landlady $15,000 plus I’m sure some costs.  The right thing for the landlady to do would have been to point out to every prospective tenant that shoveling the driveway was their responsibility and failing to do so was a lease violation.

There are countless cases of owners who got in trouble for restricting families with children from living on the second floor, or living next to the pool.  The former being for the convenience of the other tenants and the latter being out of fear of children drowning.  Neither are legitimate reasons within the confines of Fair Housing.

Apr 21

The Diagnostic and Statistical Manual of Mental Disorders describes hoarding as a mental disability and therefore most likely covered by the Americans with Disabilities Act and the Federal Fair Housing Act.  As such property owners are required to make reasonable accommodations. I would concur with this.

However there is also the health and safety exception to the reasonable accommodation requirement. This is where it gets difficult for the property owner, those doing social intervention and of course the person with the hoarding behavior. Hoarding can contribute to issues like insect and rodent infestations. Hoarding also can create fire hazards. Often hoarding is a violation of the local housing codes.

In response to a reasonable accommodation request an owner would have to balance the actual risk to health and safety to determine if the request was reasonable or not. Note actual risk and not potential risk that are not directly related to this tenant or applicant.

The ability for an owner to address the situation in a manner that does not involve eviction is often hampered by DNS’ response of placarding or threatening to placard buildings due to clutter and housekeeping. A few years ago I had a long term (~15 years) tenant who always kept her house immaculate until her son was murdered. After that she would not get rid of anything. We had to evict her due to the threat of placarding.

In my view, especially after that case, is hoarding is a disability. Having some sort of intervention available other than homelessness is the right thing.

There is the newly formed Milwaukee County Hoarding Task Force. I think this is a great potential resource not only for those with the disability but to help people in our industry make proper decisions in response to finding hoarding and or clutter at the properties.

I invited the Task Force to submit an article for the Apartment Association newsletter as well as speak at a future meeting if they wish and/or distribute informational materials at our meetings.


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