HUD Rule Change Allows Landlords to Use Screening Services Despite Discrimination Concerns

The Department of Housing and Urban Development (HUD) changed rules regulating housing discrimination complaints to immunize landlords from discrimination charges, "if they use 'profit' as a reason for their decision-making, or if they use third-party systems to choose tenants," reports Lauren Kirchner. Among landlords, 90% use similar screening services to assess prospective tenants, according to The Markup and a New York Times investigative report.

The Trump administration's new HUD rule effectively dropping discrimination charges related to decision-making influenced by third-party screening services stirred dissent in fair housing proponents. "Even mortgage lenders and realtors eventually distanced themselves from HUD’s proposal—some of them invoking this summer’s seeds of a national reckoning over systematic racism in America," Kirchner says.

While HUD is loosening the rules for the use of algorithm-based screening systems, a groundbreaking Connecticut federal district court trial will decide whether CoreLogic, an algorithmic tenant screening services behind “CrimSAFE," is guilty of housing discrimination in violation of the federal Fair Housing Act. The case is likely the first lawsuit to target a screening company, rather than a landlord, for housing discrimination.

The algorithms behind CrimSAFE, "screens out Black and Latino applicants by relying on criminal records, and that it doesn’t give applicants the chance to explain their mitigating circumstances through more detailed, individualized assessments," explains Kirchner.