No Filter for You
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No Filter for You



Presented at National Consumer Law Center\'s Consumer Right Litigation Conference on Oct. 27, 2012

Presented at National Consumer Law Center\'s Consumer Right Litigation Conference on Oct. 27, 2012



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  • Adding favorable details, consumer dispute statements not helpful in this environment
  • Evictions most common in neighborhoods with highest concentrations of African-American renters

No Filter for You No Filter for You Presentation Transcript

  • No Filter for You:Advocating for RentalHousing Access in theModern Rental Market Eric Dunn, Staff Attorney Northwest Justice Project 401 Second Ave. S., Ste. 407 Seattle, Washington 98104 Tel. (206) 464-1519
  •  Old RCW 59.18.257  LL could charge actual costs for screening  LL had to disclose name & address of screening service and “what screening entails”  $100 statutory penalty + costs & attorney fees New RCW 59.18.257  Pre-disclosure of criteria, screening information  Written adverse action notice that must give reason RCW 59.18.257
  • What makes a good tenant? Can meet • Amount and stability of income, assets financial • Other obligations are manageable • Credit history does not suggest likelihood of defaultobligationsBehavioral • Applicant not likely to damage the premises • Applicant likely to follow basic rulesSuitability • Applicant likely to coexist well with neighbors • Denial for reason(s) not related to any of the above considerations: red flag • Fair Housing, CPA/UDAP (some states)
  • Evaluating Rental Applicants
  • Tenant-Screening Reports Consumer report designed to assist a residential housing provider in deciding whether to accept a rental applicant Usually prepared by specialty CRA  Approximately 650 in USA (NY Times, 11/26/2006) Typical Contents:  Financial credit report (usually from “Big 3”)  Criminal background check  Civil litigation/eviction records  Interviews with past landlords, references  Recommendation/score/analysis
  • What does a tenant-screening report look like?
  • Miscellaneous DisclaimersCredit Information ID Verification Employment VerificationTerrorist Database Search Public Records Disclaimer
  • Reference Check Criminal HistorySex Offender Check
  • Eviction HistoryCollection Accounts& Civil JudgmentsRecommendations
  •  Duplicative fees  Inaccurate/Improper consumer reports  Overly-restrictive admission policiesBarriers to Obtaining Housing
  •  Tenant-screening reports typically cost about $30-$75 per adult applicant Landlords pass 100% screening charge on to applicants  Moral hazard: landlord chooses product but applicant pays Applicants who are rejected must usually pay screening fees over again to apply elsewhere (to purchase new report)  New report will contain substantially identical information Tenant-Screening: Costs
  •  Limit screening fees  Nominal cap  Require refund if applicant denied  “Portable” screening reportsControlling Screening Costs
  •  Applicant purchases one screening report  Has all the basic components, is prepared according to recommended methods  Applicant can shop that report around to unlimited number of housing providers for a specified time period (30 days)  Landlords can access the report for free  Landlords can order a different report at their own expense“Portable” Screening Reports
  • 1. Tenant orders report, pays fee to Moco, Inc. 2. Moco prepares report, uploads to secure website 3. Tenant receives password to access report  Tenant can review accuracy, completeness 4. Tenant can share the report unlimited number of times simply by providing
  • Applicants with negative background info. often must pay $hundreds before finding housing • Substantial drain on low-income households and on social service agencies, philanthropic orgs.Fair housing impact is unknown• Screening fees deter applicants with imperfect credentials from applying to housing perceived as more selective• What is racial/ethnic impact?Policy implications
  • Characteristics of a TightRental Market Ubiquitous, comprehensive screening of applicants Applicants compared with each other (most qualified applicant) rather than to an objective policy (first qualified applicant) Categorical exclusions (evictions, criminal records)
  • Rental Vacancy Rates 2005-Present1210 8 6 4 2 0 Wash. USAWashington’s rental vacancy rate has consistentlyremained significantly below average U.S. levels
  • As of August 2012, average rent for an apartmentwithin 10 miles of Seattle is $1,517  1-BR average: $1,303/mo.  2-BR average: $1,763/mo.  Washington: 64.8% home ownership rate  On any given night, it is estimated that almost 23,000 people are homeless ; over 100,000 people become experience homelessness at some point each year
  • That’s not my name!Problems in Screening Reports
  • Common Problems: • Report contains negative information that isn’t true • Report contains true but misleading informationInaccurate • Incomplete report (omits favorable information that mitigates other (i.e., negative) information reports: • Negative information appears on report despite some law or policy prohibiting its inclusion, such asImproper 15 USC 1681c(a) or state law restriction reports:
  •  “79 percent of all credit reports contain some type of error— and 25 percent contain such serious errors that those individuals could be denied credit.”  Dakss, Brian, “4 in 5 Credit Reports Have Errors,” CBS News, Feb. 11, 2009 A newspaper investigation concluded that about 30% of credit reports on Ohio consumers contained significant errors  Marrison, Benjamin J., “Our digging finds mess that cries for redress,” Columbus Dispatch, May 5, 2012Serious errors common in reports
  • Eviction Credit CriminalTenant Screening Report
  • 15 USC 1681g:“(a) Every consumer reporting agencyshall, upon request, and subject to section 1681h(a)(1) of this title, clearly and accurately discloseto the consumer: (1) All information in theconsumer’s file at the time of the request<” Very few screening companies will prepare a report for a consumer (no information on file)  Unfair practice under CPA/UDAP statutes?FCRA disclosure requirements
  • Hundreds of tenant-screening companies areactive in the USA…
  • Application Application Rejected Received Report Ordered Screening Report Obtained Report Received Dispute Submitted Applicant Rejected ReinvestigationNext Applicant Considered Results Reported
  • “The Unhouseables”“<the increasingly popular use of tenantscreening reports has resulted in a new classof people who are unable to access rentalhousing because of past creditproblems, evictions, poor rental histories orcriminal backgrounds...” HousingLink, “Tenant screening agencies in the Twin Cities: An overview of tenant screening practices and their impact on renters,” Summer 2004
  •  Landlord specifies rental criteria  Often suggested by CRA CRA obtains, reports information relevant to criteria  Details, nuance omitted CRA makes rental recommendation  Accept, accept with conditions, deny Landlord follows recommendation Formulaic decision-making
  • Rental applicants are commonly denied forcriminal or unlawful detainer records …
  • “It is thus well established that liability under the FairHousing Act can arise where a housing practice isintentionally discriminatory or where it has a discriminatoryeffect. A discriminatory effect may be found where a housingpractice has a disparate impact on a group of personsprotected by the Act, or where a housing practice has theeffect of creating, perpetuating, or increasing segregatedhousing patterns on a protected basis.” --U.S. Dept. of Housing & Urban Development, Proposed Rule on Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 76 Fed. Reg. 70921 (Nov. 16, 2011) Fair Housing Doctrine
  • Disparate Impact/Discriminatory Effects Outwardly neutral practice that causes either:  A significantly adverse or disproportionate impact” on members of a protected class; or  That “perpetuates segregation and thereby prevents interracial association” Usually requires proof by statistical evidence A practice that has a discriminatory effect is unlawful unless justified by “business necessity”  Contributes substantial value to landlord’s business  No less-discriminatory alternative available
  • Disparate Impact: Criminal Records African-Americans are 13.6% of U.S. population  2010 US Census African-Americans are arrested and incarcerated at rates disproportionate to their numbers  About 28% of persons arrested each year  FBI Uniform Crime Reports, 2010  Make up 40.1% of U.S. prison population  6.1 times more likely to be incarcerated than whites  Bureau of Justice Statistics, June 2010 Blacks are 3.6% of Washington population, but 18.8% of Washington’s incarcerated population  Wash. Dept. of Corrections, March 31, 2012
  • Blanket exclusions of rental applicantswho have criminal records cannot bejustified by business necessity.
  • Old criminal records do not reasonably predict future criminal behaviorAfter 5 Years, Offenders No More Likely Than Non-Offenders to Be Re-Arrested(Kurlychek, et al. “Scarlet Letters & Recidivism: Does An Old Criminal Record Predict FutureCriminal Behavior?,” 2006) 36
  • Less-Discriminatory Alternatives  Housing provider can use a case-by-case review  Criminal record should result in denial only where the criminal record suggests the applicant poses an ongoing threat of rule violations, property damage, or criminal activity  Factors to consider:  What was the offense? Does it relate to housing? How?  What were the circumstances surrounding the offense?  When did the offense occur? How old was the applicant?  Is there evidence of changed circumstances?  Drug/alcohol rehabilitation? Psychiatric treatment?  Employment/other indicia of stability?
  • “’It is the policy of 99 percent of ourcustomers in New York to flat out rejectanybody with a landlord-tenant record, nomatter what the reason is and no matterwhat the outcome is, because if theirdispute has escalated to going to court, anowner will view them as a pain,’ said JakeHarrington, a founder of…” --New York Times, Nov. 26, 2006
  • Eviction Records Eviction filings detected through court databases  Data entered by court clerk upon case filing  Circumstances, case outcomes not reported because they are not relevant to decision matrix
  • Public Records Systems Public records are often created for some purpose other than serving as de facto consumer reports.  May be inaccurate, incomplete or out-of-date Best remedy: seal/delete/correct the public record  Failure to have procedures for correcting or removing harmful information from public records may violate due process clause  Humphries v. LA County, 554 F.3d 1170 (9th Cir. 2009), rev’d on other grounds, 130 S.Ct. 447 (2010)  “Stigma-Plus Test;” Paul v. Davis, 424 U.S. 693 (1976)  Deprivation occurs if state creates a “stigma;” and  State imposes tangible burden on person’s ability to obtain a right or status recognized by state law
  • Unlawful Detainer Records Milwaukee, Wisc. 2009: low-income African- American women, especially single mothers, faced eviction at disproportionately higher rates.  Desmond, Matthew, “Eviction and the Reproduction of Urban Poverty,” Paper presented at the American Sociological Association Annual Meeting, Hilton San Francisco, San Francisco, CA, Aug 08, 2009 Oakland, Cal. 2002: 78% of “30-day no cause” evictions were issued to “minority households”
  • Empirical Studies (2) Chicago, Ill. 1996:  72% of defendants appearing in eviction court were African American, 62% were women Philadelphia, Penn. 2001:  83% of tenants facing eviction were “nonwhite,” 70% were “nonwhite women” Other studies in Baltimore, NYC, and LA “have shown that those who are evicted are typically poor, women, and minorities.”  Hartman, Chester & David Robinson, “Evictions: The Hidden Housing Problem,” 14 Housing Policy Debate 461 (2003)
  • Eviction Demographics: King County, WA
  • King County Eviction Data A 2010 Study by students in the UW-Bothell Policy Studies Program* found that:  A moderate negative relationship exists between the percentage of white tenants in a zip code area and that zip code area’s UD rate  A moderate positive relationship exists between the percentage of non-white tenants in a zip code area and that zip code area’s UD rate  Strongest Correlations: Black, Multi-Racial tenants *Gehri, Leah M., John Lee, Logan Micheel and Damian Rainey,“Tenant Screening Practices: Evidence of Disparate Impact in King County, Washington,” March 16, 2010
  • Suspect admissions policies Citizenship/Immigration status requirements  Disparate impact on basis of national origin “No Section 8”/source of income discrimination  Disparate impacts on women, people of color, families with children, and people with disabilities Restrictions on military deployment/absence from unit  Tends to cause disparate effect on military personnel Charging for background checks on young children  Disparate impact on families with children Blanket exclusion of people with eviction suits  Disparate impact on racial, gender, fwc grounds
  • Addressing categorical exclusions Fair Tenant Screening Act (Wash. SSB 6315 of 2012)  Requires disclosure of criteria, reason for adverse action  Facilitates fair housing challenges  Original bill would have prohibited CRAs from reporting certain dismissed UDs (also DV-related records) Companion Bill (SB 6321 of 2012)  Would have facilitated unlawful detainer defendants in obtaining orders to seal dismissed eviction suits  California does automatically on filing, Cal Civ. Pro. Code 1161.2;  Minnesota has an “expungement” procedure, Minn. Stat. 484.014  Amendment would have prohibited LL from denying applicant based on dismissed eviction suit (SSB 6321)