The Fair Housing Act, a cornerstone of American civil rights legislation, was not born in a vacuum. It was forged in the crucible of a long and arduous struggle for equality. For much of American history, housing discrimination was not only commonplace but was often legally sanctioned and systematically enforced. Restrictive covenants, which were clauses in property deeds that prohibited the sale of a property to members of certain racial or ethnic groups, were widespread. This practice, along with discriminatory lending policies known as redlining, effectively segregated communities and denied countless families the opportunity to build wealth and pursue the American dream.
The Civil Rights Movement of the 1950s and 1960s brought these injustices to the forefront of the national consciousness. Activists marched, protested, and campaigned tirelessly for federal legislation that would guarantee equal access to housing for all citizens, regardless of their background. The passage of the Fair Housing Act in 1968, just one week after the assassination of Dr. Martin Luther King Jr., was a landmark victory and a testament to the movement’s perseverance. It marked a pivotal moment, establishing a national policy of fair housing and creating a legal framework to combat discrimination.
Understanding the Fair Housing Act of 1968
The Fair Housing Act is the common name for Title VIII of the Civil Rights Act of 1968. At its core, this federal law prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on a person’s inclusion in a protected class. Its primary goal is to create a unified housing market where an individual’s background does not limit their choices. The law applies to a wide range of housing types, including single-family homes, apartments, condominiums, and mobile homes, making its reach extensive and its protections vital for millions of Americans.
It is crucial for property managers, leasing teams, landlords, and real estate agents to understand that the Act covers nearly all housing-related activities. This includes everything from advertising a vacant unit and screening potential tenants to setting lease terms and handling maintenance requests. The law is designed to ensure that every stage of the housing process is free from bias. Ignorance of the law is not a defense against a discrimination claim, making education and ongoing training essential for anyone working in the residential property industry. This foundational knowledge is the first step toward ensuring full compliance.
The Original Protected Classes: Race and Color
When the Fair Housing Act was first enacted, it established several key protected classes. The most central of these were race and color. This provision was a direct response to the pervasive and systemic racial discrimination that had defined the American housing landscape for centuries. Under the Act, it is illegal to take any adverse action against an individual in a housing transaction because of their race or the color of their skin. This protection is absolute and applies to all people, ensuring that no one can be denied housing opportunities based on racial prejudice.
For leasing teams and property managers, this means that race can play no part in any decision. Examples of illegal discrimination include refusing to rent to someone because of their race, providing false information about the availability of a unit, or setting different rental terms or conditions for tenants of different races. It also prohibits the practice of “steering,” which involves guiding prospective tenants toward or away from certain neighborhoods or properties based on race. All leasing and management practices must be applied consistently and equally to every applicant and resident, without any consideration of their racial background.
Religious Discrimination in Housing
Another of the original protected classes under the Fair Housing Act is religion. This provision makes it illegal to discriminate against any person in a housing transaction because of their religious beliefs, practices, or affiliation. It ensures that an individual’s faith, or lack thereof, cannot be used as a basis for denying them a place to live. This protection covers all religions and extends to those who do not subscribe to any religion at all. The goal is to ensure that housing decisions are based on objective business criteria, not on personal religious biases.
Property managers must be careful to avoid any action that could be perceived as religious discrimination. This includes making statements that express a preference for tenants of a certain faith, such as advertising a unit as being ideal for members of a particular church. It is also illegal to refuse to rent to someone because their religious practices, such as their mode of dress or dietary customs, seem unfamiliar. All interactions with prospective and current tenants must be religiously neutral, focusing solely on the qualifications and responsibilities of the tenant as they relate to the lease agreement.
Prohibitions on National Origin Discrimination
The Fair Housing Act also prohibits discrimination based on national origin. This means it is illegal to discriminate against an individual because of the country where they or their ancestors were born. This protection is crucial in a diverse nation built by immigrants, ensuring that a person’s place of origin does not become a barrier to finding a home. It protects individuals from being treated differently because of their ethnicity, accent, or cultural background. This provision reinforces the principle that housing opportunities in the United States should be open to all, regardless of where they come from.
In practice, this means that a property manager cannot refuse to rent to someone because they have a foreign accent or because they are not a native-born citizen. While it is permissible to ask for documentation that proves an applicant is in the country legally, it is illegal to impose different requirements or to single out individuals of a certain national origin for additional scrutiny. All applicants must be subject to the same screening process, and leasing decisions must be made without any consideration of a person’s ethnic background or country of origin.
Advertising Guidelines Under the Fair Housing Act
One of the most common areas where housing providers run into trouble with the Fair Housing Act is in their advertising. The law makes it illegal to make, print, or publish any notice, statement, or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on a protected class. This applies to all forms of advertising, from online listings and social media posts to print ads and “for rent” signs. The language and imagery used in advertising must be inclusive and should not discourage any group of people from applying.
For example, an advertisement that states “No Children” is a clear violation based on familial status. Similarly, phrases like “Ideal for a Quiet Couple” or “Suits a Single Professional” can be interpreted as discriminatory against families. Advertisements should focus on describing the property itself—its features, amenities, and location—rather than describing the type of person who might live there. Using a diverse range of human models in advertising imagery is also a best practice for showing that a property is welcoming to people of all backgrounds.
The Role of the Department of Housing and Urban Development (HUD)
The primary federal agency responsible for enforcing the Fair Housing Act is the U.S. Department of Housing and Urban Development, commonly known as HUD. HUD has the authority to investigate complaints of housing discrimination, conduct compliance reviews, and take enforcement action against individuals or companies that have violated the law. The agency plays a critical role in upholding the principles of fair housing and providing a mechanism for individuals to seek redress if they believe their rights have been violated. HUD also provides extensive guidance and educational resources to help housing providers understand their legal obligations.
When an individual files a complaint with HUD, the agency will launch an investigation to determine whether there is reasonable cause to believe that discrimination occurred. This process may involve interviewing the parties involved, reviewing documents, and conducting on-site tests. If HUD finds that discrimination has occurred, it will attempt to resolve the issue through a process of conciliation. If conciliation fails, the case may be referred to the Department of Justice for litigation, or the parties may elect to have the case heard by an administrative law judge, which can result in significant penalties for the violator.
Intentional vs. Unintentional Discrimination
It is important to understand that housing discrimination can take two primary forms: intentional discrimination and unintentional discrimination. Intentional discrimination, legally known as “disparate treatment,” occurs when a housing provider knowingly and deliberately treats someone differently because they are a member of a protected class. An example would be a landlord telling an African American applicant that a unit is no longer available, while telling a white applicant moments later that it is still for rent. This type of discrimination is a direct and conscious violation of the law.
The second type, unintentional discrimination, is known as “disparate impact.” This occurs when a housing provider implements a policy or practice that seems neutral on its face but has a disproportionately negative effect on members of a protected class. For example, a policy that prohibits renting to anyone with a criminal record, without any consideration of the nature of the crime or how long ago it occurred, may have a disparate impact on certain racial minorities. Even if the policy was not created with discriminatory intent, it can still be found to be illegal under the Fair Housing Act.
The Evolution of Fair Housing Protections
The original Fair Housing Act of 1968 was a monumental piece of legislation, but the fight for equal housing opportunity did not end there. Over the years, Congress recognized that the initial law did not address all forms of housing discrimination and that additional protections were needed to ensure a truly equitable market. This led to significant amendments to the Act, which expanded the list of protected classes to include sex, familial status, and disability. These amendments were critical steps in the ongoing evolution of fair housing law, broadening its scope and strengthening its protections for millions of Americans.
This expansion reflects a growing societal understanding that discrimination can take many forms and that a just society must protect the housing rights of all its members. For property managers and leasing teams, understanding these expanded protections is just as important as knowing the original law. The principles of non-discrimination apply equally to all protected classes, and a failure to respect the rights of tenants based on their gender, family structure, or disability can lead to severe legal and financial consequences. This part of our series will provide a detailed exploration of these vital additions to the Fair Housing Act.
Prohibition of Discrimination Based on Sex
In 1974, the Housing and Community Development Act amended the Fair Housing Act to include sex as a protected class. This made it illegal to discriminate against an individual in any housing-related transaction on the basis of their gender. This protection applies to both men and women and is a critical safeguard against outdated and harmful stereotypes. A property manager cannot, for example, refuse to rent a second-floor apartment to a woman based on a paternalistic belief that it would be unsafe for her, nor can they refuse to rent to a single man based on a stereotype that he would be a disruptive tenant.
In recent years, the interpretation of this protection has evolved significantly. The Department of Housing and Urban Development (HUD) has issued guidance clarifying that the Fair Housing Act’s prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation. This means that it is illegal to discriminate against an individual because they are lesbian, gay, bisexual, or transgender. Landlords and property managers must treat all applicants and tenants with equal respect and consideration, regardless of their sex, gender identity, or sexual orientation, to ensure full compliance with the law.
Understanding and Preventing Sexual Harassment in Housing
A particularly egregious form of sex discrimination is sexual harassment. The Fair Housing Act prohibits sexual harassment in housing, which can take two primary forms. The first is “quid pro quo” harassment, which occurs when a housing provider requests sexual favors in exchange for a housing opportunity or benefit. For example, a landlord offering to reduce the rent in exchange for a sexual relationship is a clear and severe violation of the law. The second form is “hostile environment” harassment, which occurs when a housing provider engages in unwelcome, sex-based conduct that is sufficiently severe or pervasive to interfere with a tenant’s ability to use and enjoy their home.
This can include making offensive sexual comments, sending unwanted sexual text messages, or entering a tenant’s home without permission for non-business purposes. Property management companies have a legal responsibility to prevent and address sexual harassment committed by their employees or agents. This includes having a clear anti-harassment policy, providing regular training to all staff, and taking immediate and appropriate action to investigate and remedy any complaints of harassment. A failure to do so can result in significant liability for the company.
Protection for Families: The Familial Status Amendment
In 1988, the Fair Housing Amendments Act added “familial status” as a protected class. This was a crucial addition designed to protect families with children from housing discrimination. Under this provision, it is illegal to refuse to rent to, or to impose different terms or conditions on, a tenant because they have one or more children under the age of 18 living with them. This protection also extends to pregnant women and to individuals who are in the process of securing legal custody of a child, such as through adoption.
This amendment made it illegal for landlords to advertise properties as “adults only” or to have policies that unreasonably restrict the activities of children, such as prohibiting them from playing outside. While a landlord can enforce reasonable rules of conduct that apply to all tenants, these rules cannot single out children or be used as a pretext for discouraging families from living in a property. For example, a rule that establishes quiet hours for the entire building is generally permissible, but a rule that prohibits children from making any noise is not.
Navigating Occupancy Standards
While the Fair Housing Act prohibits discrimination against families with children, it does not prevent housing providers from establishing reasonable occupancy standards for their properties. Landlords have a legitimate business interest in preventing their units from being overcrowded. However, these occupancy standards must be reasonable and cannot be used as a means of excluding families. An overly restrictive occupancy policy could be found to have a discriminatory effect on families with children and could therefore violate the law.
While the Fair Housing Act does not specify a national occupancy standard, HUD has issued guidance, known as the Keating Memorandum, which states that an occupancy policy of two persons per bedroom is generally considered reasonable. This is often used as a starting point, but other factors must also be considered, such as the size of the bedrooms, the overall size and configuration of the unit, and any applicable state or local occupancy laws. A landlord should be prepared to justify their occupancy policy based on legitimate, non-discriminatory business reasons.
Disability: A Key Protected Class
The 1988 amendments also added disability as a protected class, marking a significant step forward in the housing rights of millions of Americans. Under the Fair Housing Act, a person with a disability is defined as an individual who has a physical or mental impairment that substantially limits one or more major life activities. This is a broad definition that includes a wide range of conditions, such as mobility impairments, hearing and vision impairments, chronic illnesses, and mental health conditions. It also protects individuals who have a record of such an impairment or are regarded as having such an impairment.
The law makes it illegal to refuse to rent to a person because of their disability. It also requires housing providers to make two types of adjustments to ensure that people with disabilities have an equal opportunity to use and enjoy a dwelling: reasonable accommodations and reasonable modifications. These requirements are a unique and critical aspect of the Fair Housing Act, and a failure to understand and comply with them is one of the most common sources of fair housing complaints.
The Duty to Provide Reasonable Accommodations
A reasonable accommodation is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling. The housing provider is responsible for the cost of the accommodation. A common example is a request from a tenant with a mobility impairment for a designated parking space closer to their unit, even if the property has a first-come, first-served parking policy. This would be a reasonable accommodation as it is necessary for the tenant to access their home.
Another frequent example involves assistance animals. If a person with a disability has an animal that provides assistance or performs tasks related to their disability, a housing provider must make an exception to a “no pets” policy to allow the animal to live in the unit. The landlord cannot charge a pet fee for an assistance animal, as it is not a pet. A housing provider can ask for verification that a person has a disability and a disability-related need for the accommodation, but they cannot ask for specific details about the nature of the disability. A request for an accommodation can only be denied if it would impose an undue financial and administrative burden or would fundamentally alter the nature of the housing provider’s operations.
Understanding Reasonable Modifications
In addition to reasonable accommodations, housing providers must also permit tenants with disabilities to make reasonable modifications to their unit or to common use areas, at the tenant’s expense. A reasonable modification is a structural change that is necessary to afford a person with a disability the full enjoyment of the premises. Examples include installing grab bars in a bathroom, widening a doorway to accommodate a wheelchair, or installing a ramp at the entrance to a building. The key difference from an accommodation is that the tenant is responsible for the cost of the modification.
A landlord must permit these modifications but can require that they be done in a workmanlike manner and that the tenant obtain any necessary building permits. For interior modifications in a rental unit, the landlord can also require the tenant to restore the unit to its original condition at the end of the tenancy, if it is reasonable to do so. The requirement to allow reasonable modifications ensures that a person’s physical disability does not become an insurmountable barrier to making a home their own and living with dignity and independence.
Setting a Tone of Inclusivity from the Start
Fair housing compliance is not simply a list of rules to follow; it is a mindset that should permeate every aspect of property management. The process begins long before an applicant ever walks through the door. It starts with establishing a clear and unwavering commitment to equal opportunity. This commitment should be reflected in the company’s mission statement, its training materials, and its public-facing communications. Displaying the official Fair Housing poster, which features the equal housing opportunity logo, in the leasing office is a simple but powerful way to signal to the public that the property operates in full compliance with the law.
This tone of inclusivity must be championed by leadership and adopted by every member of the leasing and management team. All staff should be trained to understand that their role is to provide professional and equitable service to everyone, without exception. By creating a welcoming environment where all prospective tenants feel respected and valued, a property management company can reduce its legal risk and build a positive reputation in the community. This proactive approach sets the stage for a leasing process that is fair, consistent, and legally sound from start to finish.
Fair Housing in Marketing and Advertising
As discussed previously, the Fair Housing Act’s prohibitions on discriminatory advertising are strict and comprehensive. Every piece of marketing material, from a simple social media post to a full-scale print campaign, must be carefully crafted to be inclusive. The guiding principle should be to describe the property, not the people. Advertisements should focus on the tangible features of the unit and the community, such as the number of bedrooms, the square footage, the amenities, and the location. They should avoid using language that could be interpreted as steering or expressing a preference for a certain type of tenant.
The use of imagery is also critically important. Marketing photos and videos should depict a diverse range of people, reflecting the rich tapestry of the broader community. This sends a clear visual message that all are welcome. It is also a best practice to include the equal housing opportunity logo or a statement of compliance, such as “We are an equal opportunity housing provider,” in all advertisements. This not only fulfills a legal best practice but also reinforces the property’s commitment to fairness and equality in the minds of potential applicants.
Consistent and Objective Screening Procedures
One of the most critical stages for fair housing compliance is the tenant screening and application process. To avoid any claims of discrimination, it is absolutely essential that the property has a written set of standardized screening criteria and that these criteria are applied consistently to every single applicant. These criteria should be objective, non-discriminatory, and directly related to the applicant’s ability to be a good tenant. Common and permissible criteria include income verification, credit history, rental history, and a criminal background check that is applied in a non-discriminatory manner.
Having these criteria in writing creates a clear and defensible standard. The leasing team should provide a copy of the screening criteria to every prospective applicant before they pay an application fee. This transparency ensures that everyone is aware of the qualifications from the outset. When processing applications, staff must follow the same procedure for everyone. For example, if you run a credit check on one applicant, you must run a credit check on all of them. This consistency is the key to preventing disparate treatment and ensuring that all leasing decisions are based on legitimate business factors, not personal biases.
Handling Tenant Inquiries and Property Tours
All interactions with prospective tenants, from the initial phone call to the property tour, must be handled with professionalism and consistency. When an individual inquires about the availability of units, they must be given accurate and truthful information. It is a serious violation of the Fair Housing Act to tell someone from a protected class that no units are available when, in fact, there are. This practice is known as discriminatory misrepresentation and is a common tactic used to illegally deny housing.
During property tours, the leasing agent must show all interested parties all available units that meet their stated criteria. An agent cannot “steer” an applicant toward or away from a particular unit or section of the building based on their protected class status. For example, it would be illegal to show a family with children only the first-floor units based on an assumption that they would be too noisy for the upstairs neighbors. The applicant should be allowed to choose from any of the available units for which they qualify.
Making Lawful Leasing Decisions
After an applicant has been through the screening process, a decision must be made to either accept or deny their application. This decision must be based solely on whether the applicant met the established, written screening criteria. If an applicant meets all the objective criteria, they should be approved. If they fail to meet one or more of the criteria, their application can be denied. It is a best practice to communicate the reason for the denial to the applicant in writing, referencing the specific criteria that were not met. This is known as providing an “adverse action” notice.
This level of documentation is crucial for defending against a potential discrimination complaint. If a rejected applicant claims they were discriminated against, the property manager can produce the written screening criteria and show exactly how the applicant failed to meet them. This creates a clear, business-related justification for the decision, which can effectively rebut a claim of illegal bias. All application files, for both accepted and rejected applicants, should be retained for a set period of time in accordance with company policy and state law.
Fair Housing in Day-to-Day Property Management
The responsibilities of fair housing do not end once a lease is signed. The principles of equal treatment must be applied to all aspects of day-to-day property management for the entire duration of a tenant’s residency. This includes how the management team responds to maintenance requests, enforces community rules, and handles resident complaints. All services and amenities must be made available to all residents on an equal basis. For example, a maintenance team cannot prioritize repair requests from tenants of a certain race over those of another.
The enforcement of community rules must also be consistent and non-discriminatory. If there is a rule against leaving personal items in common hallways, that rule must be enforced equally against all residents who violate it. A manager cannot choose to fine a resident from a protected class for a violation while letting another resident get away with the same behavior. This consistent application of the rules is essential for maintaining a fair living environment and for avoiding claims of disparate treatment from residents.
Handling Requests for Accommodations and Modifications
As discussed in the previous section, one of the most important ongoing responsibilities for property managers is handling requests for reasonable accommodations and modifications for residents with disabilities. This is an area that requires careful attention and a clear, interactive process. When a resident makes a request, the management team should take it seriously and respond promptly. The law requires an interactive process, meaning the manager should communicate with the resident to gather any necessary information and to discuss how the requested accommodation or modification can be implemented.
Management should have a clear and consistent procedure for receiving and processing these requests. It is essential to train all staff, including maintenance personnel, to recognize a request for an accommodation or modification and to know how to forward it to the appropriate decision-maker. Unreasonable delays in responding to a request can be considered a denial and can lead to a fair housing complaint. A timely, respectful, and interactive process is the key to fulfilling this critical legal duty.
Lease Renewals and Terminations
The principles of fair housing must also be applied at the end of the landlord-tenant relationship, in the areas of lease renewals and terminations. The decision to offer a lease renewal to a tenant cannot be based on their protected class status. If a tenant has been compliant with the terms of their lease, they should generally be offered a renewal in accordance with the property’s standard policy. A non-renewal decision should only be made for legitimate, non-discriminatory business reasons, such as a documented history of lease violations.
Similarly, the decision to terminate a lease and pursue an eviction must be based on a material violation of the lease agreement, such as non-payment of rent or serious damage to the property. The eviction process must be carried out in accordance with state and local laws, and it cannot be used as a tool to remove tenants because of their protected class status. Consistent and thorough documentation of all lease violations is the best defense against a claim that an eviction was discriminatory.
Federal Law as the Foundation, Not the Ceiling
A common misconception among housing providers is that complying with the federal Fair Housing Act is the full extent of their legal obligations. However, this is a dangerous assumption. The federal law should be viewed as the foundation, or the minimum standard, for fair housing protections in the United States. It sets the floor, not the ceiling. Many states, counties, and municipalities have passed their own fair housing laws that provide even broader protections than those offered at the federal level. These state and local laws can add new protected classes and establish stricter enforcement mechanisms.
It is absolutely essential for property managers and leasing teams to be knowledgeable about the specific fair housing laws not only at the federal level but also in the state and city where their properties are located. In any situation where federal, state, and local laws differ, the housing provider is generally required to comply with the law that provides the greatest level of protection to the individual. A failure to stay informed about these local nuances can easily lead to a compliance violation, even if the provider believes they are following federal guidelines.
A Closer Look at California’s Fair Employment and Housing Act (FEHA)
The state of California provides an excellent example of a jurisdiction with fair housing laws that are significantly more expansive than the federal act. California’s primary fair housing law is the Fair Employment and Housing Act, commonly known as FEHA. This act incorporates all of the federal protected classes but also adds a number of its own, providing a much broader umbrella of protection for the state’s residents. Understanding these additional protections is mandatory for any housing provider operating within California.
FEHA prohibits housing discrimination based on several categories not explicitly covered by the federal act. These include ancestry, marital status, sexual orientation, gender identity, gender expression, genetic information, source of income, and military or veteran status. This means that in California, a landlord cannot refuse to rent to a couple because they are unmarried, nor can they discriminate against a tenant because their income comes from a public assistance program like a Section 8 voucher. This “source of income” protection is a particularly important and common feature of many state and local fair housing laws.
Other Common State and Local Protected Classes
While California is known for its extensive protections, many other states and cities across the country have also expanded their fair housing laws. In addition to the source of income protection, another common addition is protection based on age. This prevents a landlord from refusing to rent to an individual simply because they are, for example, a college student or a senior citizen, as long as they are of legal age to enter into a contract. Marital status is another frequently included protection, ensuring that unmarried couples have the same housing opportunities as married ones.
Some progressive jurisdictions have also added protections based on a person’s political affiliation, citizenship status, or status as a victim of domestic violence. A growing number of cities are also passing laws that limit a landlord’s ability to use an applicant’s criminal history as the basis for a denial, in an effort to reduce the disparate impact that such policies can have on minority groups. This constantly evolving landscape of local laws requires that property managers make a continuous effort to stay informed through regular training and legal updates.
Understanding the Limited Exemptions to the Fair Housing Act
While the Fair Housing Act is very broad in its coverage, there are a few specific and very limited exemptions. It is important to note that these exemptions are narrowly construed and rarely apply to the average landlord or property management company. Furthermore, even if a property is exempt from the federal Fair Housing Act, it may still be covered by state or local fair housing laws. For this reason, it is always advisable to consult with a legal professional before assuming that an exemption applies.
One of the most well-known exemptions applies to owner-occupied buildings with no more than four units. This is often referred to as the “Mrs. Murphy” exemption. Another exemption applies to single-family homes sold or rented by the owner without the use of a real estate agent. However, this exemption is lost if the owner uses any form of discriminatory advertising. Finally, housing operated by religious organizations and private clubs may be exempt, provided that they do not operate for a commercial purpose and limit occupancy to their members.
The Exemption for Housing for Older Persons
A significant exemption to the Fair Housing Act’s prohibition on familial status discrimination is the provision for “Housing for Older Persons.” This exemption allows certain communities to legally exclude families with children and market themselves as senior housing. However, to qualify for this exemption, a property must meet very strict legal criteria. There are two primary types of qualifying senior housing. The first is housing that is provided under a state or federal program specifically designed and operated to assist elderly persons.
The second, and more common, type is housing that is intended for and solely occupied by persons who are 62 years of age or older. The third type is housing that is intended and operated for occupancy by at least one person who is 55 years of age or older per unit. To qualify for the “55 or older” exemption, the property must demonstrate that at least 80 percent of its occupied units are occupied by at least one person aged 55 or over, and it must publish and adhere to policies that demonstrate its intent to be housing for this age group.
The Complex Issue of Criminal History Screening
One of the most complex and evolving areas of fair housing law is the use of criminal history in tenant screening. While a person’s criminal record is not a protected class under the Fair Housing Act, HUD has issued guidance stating that policies that prohibit renting to any person with a criminal record can be discriminatory. This is because such blanket bans can have a “disparate impact” or a disproportionately negative effect on certain racial and ethnic minorities, who are arrested and incarcerated at higher rates.
This does not mean that landlords can never consider an applicant’s criminal history. However, it does mean that their policy must be more nuanced. A legally defensible policy should not consider arrests that did not lead to a conviction. For convictions, the policy should consider the nature and severity of the crime and how long ago it occurred. A landlord must be able to show that their policy is necessary to protect the safety of their residents and that there is not a less discriminatory alternative for achieving that goal. This is a legally complex area that requires careful consideration and legal advice.
Understanding and Preventing Steering
“Steering” is the illegal practice of guiding prospective homebuyers or renters toward or away from certain neighborhoods or properties based on their protected class status. Steering can be overt, but it is often subtle. It can occur when a leasing agent provides different information or a different level of service to different clients. For example, an agent might only show apartments in a particular building to white applicants, while telling applicants of color that nothing is available in that building, instead showing them units in a different, more racially diverse area.
Another form of steering is making comments about the racial or ethnic makeup of a neighborhood, such as saying, “You wouldn’t be comfortable in this neighborhood, it’s not very diverse.” The agent’s intent does not matter; the effect of their actions is to limit a person’s housing choices based on their race or another protected characteristic. Leasing agents must be trained to provide the same information and the same range of choices to all clients, allowing the client to make their own decisions about where they want to live based on their own preferences and objective criteria.
Redlining and Its Modern Manifestations
Redlining was a historically discriminatory practice in which financial institutions would refuse to provide mortgages or other financial services to residents of certain neighborhoods, which were often predominantly minority communities. This practice was outlawed by the Fair Housing Act. However, the legacy of redlining continues to affect the housing market, and modern forms of discrimination in lending still exist. The Fair Housing Act makes it illegal for any bank, mortgage company, or other lender to discriminate in their lending practices based on any protected class.
This means that a lender cannot refuse to make a loan, or impose different terms or conditions on a loan, such as a higher interest rate or larger down payment, because of a person’s race, religion, sex, or other protected characteristic. While a property manager is not directly involved in the lending process, understanding this aspect of the Fair Housing Act is important for having a complete picture of the legal landscape and for being able to recognize and report potential discriminatory practices in the broader housing industry.
A Proactive Stance Against Discrimination
To truly comply with the spirit and letter of the Fair Housing Act, it is not enough to simply avoid overt acts of discrimination. Property management companies and their staff must adopt a proactive stance, constantly working to identify and eliminate any policies or practices that could have a discriminatory effect. This requires a deep and practical understanding of the different ways that discrimination can manifest, both intentionally and unintentionally. It involves cultivating an environment of awareness where fairness and equality are the guiding principles of every business decision.
This commitment to proactive compliance is the best form of risk management. By regularly reviewing policies, providing ongoing training, and fostering an inclusive culture, a housing provider can significantly reduce the likelihood of a fair housing complaint. It also builds a positive reputation as a fair and ethical operator, which can be a significant advantage in the marketplace. This part of our series will delve into the nuances of different discriminatory practices, providing the knowledge needed to recognize and root them out of your operations.
Disparate Treatment: The Face of Intentional Discrimination
Disparate treatment is the most straightforward and easily understood form of discrimination. It is intentional. It occurs when a housing provider treats a person differently, and less favorably, because of their membership in a protected class. The motivation for the action is discriminatory, even if the perpetrator does not explicitly state their biased reason. The key element is that the housing provider’s action is based on a person’s protected characteristic rather than on their individual qualifications or conduct. A classic example is a landlord who refuses to rent to a family with children because he prefers quiet tenants.
To prove a case of disparate treatment, a person does not need to have direct evidence of the landlord’s discriminatory intent, such as a recorded statement. Discrimination can be inferred from the circumstances. For instance, if a qualified applicant from a protected class is told a unit is unavailable, and that unit is then rented to a less qualified applicant who is not from a protected class, a court may infer that discrimination occurred. The best way for a housing provider to defend against such a claim is to have clear, objective screening criteria and to apply them consistently to all applicants.
Real-World Examples of Disparate Treatment
Disparate treatment can occur at any stage of the housing process. In advertising, it could be a listing that explicitly states “No Section 8,” which in many jurisdictions would be illegal discrimination based on source of income. During the inquiry phase, it could be a leasing agent who fails to return calls from people with foreign-sounding names. During the application process, it could be a landlord who requires a higher security deposit from tenants of a certain race or national origin.
Once a person is a resident, disparate treatment can manifest as a property manager who responds to maintenance requests from white tenants more quickly than those from Hispanic tenants. It can also be a landlord who enforces community rules, such as those about noise or common area use, more strictly against families with children than against adult-only households. In all of these examples, the common thread is that a person is being treated differently and worse because of their protected class status.
Disparate Impact: The Unintentional Form of Discrimination
Disparate impact is a more complex and often more subtle form of discrimination. A disparate impact claim arises from a policy or practice that is neutral on its face, meaning it applies equally to everyone, but has a disproportionately negative effect on members of a protected class. In these cases, the housing provider’s intent does not matter. Even if the policy was created for a legitimate, non-discriminatory business reason, it can still be found to be illegal if it creates an unfair barrier for a protected group.
The legal framework for analyzing a disparate impact claim involves a three-step, burden-shifting analysis. First, the plaintiff must prove that a specific policy has a discriminatory effect on a protected class. Second, the housing provider then has the burden of proving that their policy is necessary to achieve a substantial, legitimate, non-discriminatory interest. Third, if the provider can do so, the plaintiff can still prevail by showing that there is a less discriminatory alternative policy that could also serve that interest. This framework ensures that policies do not create unnecessary obstacles to equal housing opportunity.
Examples of Policies with a Potential Disparate Impact
Several common housing policies have been challenged under a disparate impact theory. One of the most prominent is an overly broad criminal background screening policy. A rule that denies housing to any applicant with a criminal record of any kind, regardless of the nature of the offense or when it occurred, is likely to have a disparate impact on African American and Hispanic applicants, who are arrested and convicted at statistically higher rates. A more legally sound policy would involve a more individualized assessment of an applicant’s criminal history.
Another example is a restrictive occupancy standard. A policy that limits occupancy to one person per bedroom in a community with large, family-sized units could have a disparate impact on families with children. While the landlord has a right to prevent overcrowding, such a strict policy may not be justifiable. Similarly, a minimum income requirement that is set unnecessarily high, such as requiring an income of four or five times the monthly rent, could have a disparate impact on single mothers or on racial groups that have statistically lower average incomes.
The Dangers of Steering and Segregation
As previously introduced, steering is the illegal practice of influencing a person’s housing choice based on their protected class. This practice not only limits the options of the individual being steered but also contributes to the perpetuation of segregated housing patterns, which is directly contrary to the goals of the Fair Housing Act. Steering can be practiced by real estate agents in the sales market or by leasing agents in the rental market. It is a violation of the law, regardless of whether the agent’s motives were malicious or supposedly well-intentioned.
For example, an agent who tells a Black family that they would “feel more comfortable” in a certain neighborhood, or who only shows a white couple homes in predominantly white areas, is engaging in illegal steering. Leasing agents must be trained to let the client lead the housing search. The agent’s role is to provide objective information about the properties and to show any and all available units that meet the client’s stated needs and budget, without making any assumptions or comments based on the client’s protected characteristics or the demographics of a neighborhood.
Combating Unconscious Bias in Leasing Decisions
Much of the discrimination that occurs in the housing market is not the result of overt prejudice but rather of unconscious bias. Unconscious biases are the stereotypes and automatic associations we all hold, often without being aware of them, that can influence our judgments and decisions. A leasing agent might, without even realizing it, be friendlier and more engaging with an applicant who looks like them, or they might subconsciously scrutinize an application more carefully if it comes from a person of a different race or national origin.
Combating unconscious bias requires self-awareness and the implementation of systems that minimize the role of subjective judgment. This is why having standardized, written screening criteria is so important. It forces the decision-making process to be based on objective data rather than on a “gut feeling,” which can often be influenced by bias. Regular training that includes a component on unconscious bias can also be very effective. This training can help employees to recognize their own potential biases and to develop strategies for making more conscious and objective decisions.
The Importance of Fair Housing Testing
To monitor and enforce compliance with the Fair Housing Act, government agencies and private fair housing organizations often conduct “testing.” Fair housing testing is a method of investigation that is similar to “secret shopper” programs. In a test, individuals of different protected classes, known as testers, pose as prospective tenants and inquire about available housing. The testers are matched so that they have identical qualifications, such as income and credit history. The only significant difference between them is their protected class status (e.g., their race or the fact that one uses a wheelchair).
The testers then interact with the leasing staff and meticulously document their experiences. The results of the tests are then compared to see if there were any differences in the information or service they received. If the tester from the protected class was treated less favorably than the other tester, this can be powerful evidence of discrimination. Testing is a legal and highly effective tool for uncovering discriminatory practices that might otherwise go undetected, and it serves as a powerful incentive for housing providers to ensure their staff is complying with the law.
The Indispensable Role of Ongoing Training
Ensuring compliance with the complex web of federal, state, and local fair housing laws is not a passive activity. It requires a firm and ongoing commitment to education and training for every single member of a property management or leasing team. Fair housing law is not static; it evolves through new legislation, court decisions, and regulatory guidance. A single training session during employee onboarding is not sufficient to maintain the level of knowledge required to navigate this dynamic legal landscape. Regular, recurring training is the only way to ensure that all staff members are up-to-date and fully aware of their responsibilities.
This training should be comprehensive, covering all protected classes and the various ways that discrimination can occur. It should be practical, using real-world scenarios to help employees understand how to apply fair housing principles in their daily interactions with prospects and residents. Effective training not only protects a company from legal liability but also empowers employees to act with confidence and professionalism, fostering a positive and inclusive environment that is attractive to a diverse range of qualified tenants. It is an investment that pays dividends in both risk reduction and reputation enhancement.
Key Topics for a Comprehensive Training Program
A robust fair housing training program should cover a wide range of essential topics. It should begin with a foundational overview of the Fair Housing Act and any applicable state and local laws, with a detailed discussion of all protected classes. A significant portion of the training should be dedicated to the practical aspects of compliance, including non-discriminatory advertising, the importance of consistent screening procedures, and the proper handling of property inquiries and tours. The training should provide clear do’s and don’ts for every stage of the leasing process.
Special emphasis should be placed on more complex areas, such as the legal requirements for handling requests for reasonable accommodations and modifications for individuals with disabilities. This is one of the most frequent sources of fair housing complaints, and staff must have a clear understanding of the interactive process. The training should also cover sensitive topics like sexual harassment and the proper, non-discriminatory use of criminal history in tenant screening. Finally, a component on unconscious bias can help staff to recognize and mitigate the subtle prejudices that can influence decision-making.
The Complaint and Enforcement Process
When an individual believes they have been a victim of housing discrimination, they have the right to file a formal complaint. This complaint can typically be filed with the U.S. Department of Housing and Urban Development (HUD) or with a state or local fair housing agency. The complaint must generally be filed within one year of the alleged discriminatory act. Once a complaint is filed, the agency will notify the housing provider (the respondent) and will begin an investigation. This investigation is a neutral fact-finding process designed to determine if there is reasonable cause to believe discrimination occurred.
If the investigation finds evidence of discrimination, the agency will first attempt to reach a voluntary settlement between the parties through a process called conciliation. A conciliation agreement is a legally binding document that can include monetary damages for the complainant, policy changes by the housing provider, and mandatory fair housing training. If conciliation is unsuccessful, the case can be elevated for legal action. The consequences of a final ruling of discrimination can be severe, demonstrating the importance of taking every complaint seriously.
Penalties for Violating the Fair Housing Act
The financial and legal penalties for violating the Fair Housing Act can be substantial and can have a devastating impact on a property management company or individual landlord. If a case is heard by an administrative law judge and discrimination is found, the judge can award out-of-pocket damages to the victim, as well as damages for emotional distress. The judge can also impose civil penalties, which are paid to the government. For a first offense, these civil penalties can be as high as $21,039, with significantly higher penalties for repeat offenders.
In addition to the monetary costs, a finding of discrimination can also require the housing provider to take injunctive relief, which means they may be ordered to change their policies, attend training, or make a specific unit available to the complainant. If a case is filed in federal court, the potential for damages is even greater, as there is no limit on the amount of punitive damages that a jury can award. Furthermore, the reputational damage from a public finding of discrimination can harm a business for years to come.
The Value of Fair Housing Certifications
For property management professionals who are committed to excellence and ethical practice, obtaining a fair housing certification can be a valuable career move. Several industry organizations and training providers offer certification programs that provide in-depth education on fair housing laws and best practices. Earning such a credential demonstrates a high level of expertise and a personal commitment to upholding the principles of equal housing opportunity. This can set a professional apart from their peers and can be a significant asset when seeking new employment or career advancement.
For a property management company, having a certified staff can be a major selling point for property owners and can serve as evidence of the company’s commitment to compliance. While certification does not provide immunity from a fair housing complaint, it does show that the company is proactive about education and has invested in ensuring its staff has the knowledge needed to comply with the law. This can be a mitigating factor in the event of an investigation and is a key component of a comprehensive risk management strategy.
Beyond Compliance: Building Inclusive Communities
The ultimate goal of the Fair Housing Act and its related laws is not just to prevent illegal acts of discrimination but to foster the creation of open, inclusive, and diverse communities. For property managers and leasing teams, this means looking beyond the bare minimum requirements of legal compliance and actively working to create a welcoming environment for people of all backgrounds. This is not only a legal and ethical imperative but also a sound business practice. Diverse communities are more vibrant, stable, and economically resilient.
This involves training staff to be culturally competent and sensitive to the needs of a diverse resident population. It means ensuring that all common areas and amenities are accessible and welcoming to everyone. It can also involve partnering with community organizations to market the property to a wide range of prospective tenants. By embracing the spirit of the Fair Housing Act, a property management company can do more than just manage buildings; it can play an active role in building a stronger, fairer, and more integrated community for everyone.
Fair Housing as a Foundation for Stronger Relationships
At its heart, the practice of fair housing is about treating every individual with dignity and respect. When leasing and management teams operate from this fundamental principle, they build a foundation of trust with their residents. A rental relationship that is based on fairness and mutual respect is far more likely to be positive and successful for both the tenant and the landlord. Tenants who feel they are being treated fairly are more likely to take pride in their homes, comply with community rules, and remain long-term residents.
This positive relationship reduces turnover, minimizes conflict, and creates a more pleasant living and working environment for everyone. By consistently applying fair housing principles, property managers are not just following the law; they are engaging in a best practice that leads to stronger communities and a more stable, profitable business. It is a clear demonstration that ethical conduct and business success are not mutually exclusive but are, in fact, deeply intertwined.
A Final Commitment to Fairness
The journey through the complexities of the Fair Housing Act reveals a clear and simple truth: fairness is not an option, it is an obligation. For anyone involved in the business of housing, a thorough understanding of this critical civil rights law is essential. By being diligent in training, consistent in the application of policies, and proactive in creating a welcoming environment, housing providers can protect themselves from legal risk and contribute to the noble goal of equal housing opportunity. Let the principles discussed in this series be a guide to building not just successful properties, but stronger, more inclusive communities that stand as a testament to the enduring value of fairness for all.