DOJ: Complying with Local Crime-Free Laws May Violate Fair Housing Laws

We explain what to do when federal and local laws conflict.

 

 

Picture this: You’re a law-abiding landlord in Hemet, Calif. Among the laws by which you abide is a local ordinance allowing for the eviction of tenants who engage in even one act of “criminal activity” and subjecting landlords to penalties if the police receive multiple calls for “nuisance” activity at the property during the year. The problem is that HUD thinks that the ordinance constitutes discrimination and sues the town. By the time the dust clears, the town has to repeal the law and pay $200,000 in damages [Voluntary Compliance Agreement between U.S. Dep’t of Hous. & Urb. Dev. and City of Hemet, HUD Case No. 09-20-0002-6 (Dec. 2020)]. And while it ends the case against the city for enacting and enforcing the ordinance, the settlement doesn’t protect you and the other landlords in the town against liability for having complied with it. 

The U.S. legal system allows for lawmaking by three different authorities: federal, state, and municipal governments. While they differ, federal, state, and municipal laws work in some degree of harmony with each other. This coordination ensures that citizens who obey one set of laws aren’t at risk of violating any of the others. At least that’s how it’s supposed to work. Regrettably, there are situations where laws work at cross purposes.

One of those situations is the subject of an Aug. 15, 2024, letter from the Civil Rights Division of the U.S. Department of Justice (DOJ) warning that municipal “crime-free” rental housing and “nuisance” property ordinances may run afoul of the Fair Housing Act (FHA) and other federal and state laws. Echoing previous HUD guidance, the DOJ letter explains how these ordinances, which are intended to reduce criminal and other nuisance activity at rental sites, often lead to unintended discrimination against people of color, the disabled, domestic violence victims, and other vulnerable groups protected by fair housing laws.

While addressed to state and local governments, the DOJ letter has obvious implications for landlords. Bottom Line on Top: Complying with discriminatory ordinances makes you a potential target for enforcement action and lawsuits by federal and state government agencies, fair housing organizations, and victims.

Accordingly, this month’s lesson picks up where the DOJ letter leaves off by explaining the compliance ramifications for landlords. First, we’ll explain the different kinds of troublesome ordinances the DOJ letter addresses and the four federal laws they may violate. Then, we’ll help you navigate a path to compliance by outlining the six kinds of problematic rental practices you must avoid, even when mandated by local ordinance, and lay out a general strategy of what to do if you actually face the dilemma of having to violate federal law to comply with local law. After the lesson, we’ll give you a quiz enabling you to apply the material to real-life situations. 

WHAT DOES THE LAW SAY?

To make sense of the DOJ letter, there are two sets of laws you need to understand:  municipal crime-free rental housing ordinances and nuisance property ordinances.

Until recently, “crime-free” rental housing and nuisance property laws (which, for simplicity’s sake, we’ll refer to collectively as “crime-free” ordinances except where the context requires otherwise) were in effect in nearly 2,000 cities in 48 states across the nation. These ordinances encourage or require landlords to leverage their authority over rental applicants and tenants to prevent them from engaging in criminal or nuisance activity, such as by:

• Inserting a crime-free lease addendum that provides for eviction or other adverse housing consequences against tenants and households based on their own or a guest’s alleged criminal activity;
• Imposing a blanket policy of rejecting any applicant that has a criminal history, regardless of the seriousness of the crime, how long ago it occurred, and whether the applicant was convicted or merely arrested;
• Evicting tenants and households for placing calls for emergency or law enforcement assistance; and/or
• Publicizing confidential medical information from such a call.

As we’ll discuss, each of these practices raises bright red flags under the FHA and state fair housing laws.

The 4 Federal Laws that Crime-Free Ordinances Potentially Violate

The DOJ warns local governments that the agency, HUD, and other partners have taken and are prepared to continue to take enforcement actions against crime-free ordinances that violate federal laws, citing four particular laws:

1. The FHA. The FHA bans conduct that has the purpose or effect of discriminating based on race, national origin, disability, sex (including gender identity and sexual orientation) or other protected characteristics. Reiterating previous HUD guidance, the DOJ letter suggests that crime-free ordinances encourage or require landlords to take actions that may run afoul of the FHA:

• Intentional discrimination, which may occur when a local government enacts a crime-free ordinance for discriminatory reasons, such as to perpetuate a history of segregation by allowing landlords to exclude applicants who’ve been arrested for a crime to the extent that people of color are arrested at disproportionately high rates;
• Discriminatory enforcement, such as by enforcing the ordinance only against groups that the FHA protects; and
• Ordinances that are intended to be neutral but have the effect of discriminating against people of particular races, nationalities. or other protected characteristics—for example, a law allowing for eviction of domestic violence victims, who statistics show are disproportionately female, which may constitute discrimination on the basis of sex.  

Example: A California municipality adopted a crime-free ordinance requiring landlords to, among other things, evict tenants or guests for any alleged criminal activity, regardless of arrest or conviction. Enforcement of the ordinance led to hundreds of evictions, disproportionately affecting Black and Latino renters, many of whom had never been arrested, charged, or convicted of any crime. The DOJ sued, contending that the ordinance violated the FHA ban on racial and national origin discrimination. Rather than risk a trial, the city decided to settle the suit by repealing the ordinance and paying nearly $1 million to compensate its victims [United States v. City of Hesperia, No. 5:19-cv-02298-AB-SP (C.D. Cal. July 22, 2021), ECF No. 54].

2. Title VI. The DOJ notes that crime-free ordinances may also violate Title VI of the Civil Rights Act of 1964, which bans discrimination on the ground of race, color, or national origin in programs and activities receiving federal financial assistance. For example, a city housing authority receiving federal funding may violate Title VI by implementing a crime-free program and lease addendum only in predominantly Black communities.

3. The ADA. Public housing authorities and other public landlords that implement or follow crime-free programs that discriminate against individuals with disabilities risk liability under not only the FHA but also the Americans with Disabilities Act (ADA). The DOJ notes that the ADA also protects organizations, such as residential service providers for people with disabilities, from discriminatory enforcement of local ordinances based on their known association with or relationship to individuals with disabilities.

4. The VAWA. Discriminatory crime-free ordinances and practices that target women may violate a federal law called the Violence Against Women Act (VAWA), which applies to providers of federally assisted housing. Key provisions of VAWA include:

• A ban on denying admission based on an individual’s status as a victim of domestic violence, dating violence, sexual assault, or stalking;
• A ban on evicting a resident who’s a survivor of domestic violence, sexual assault, dating violence, or stalking based solely on criminal activity related to an act of violence against the survivor;
• A ban on treating incidents or threats of abuse as serious or repeated lease violations or any other “good cause” to evict;
• A ban on punishing applicants or tenants for seeking law enforcement or emergency assistance on their own or another person’s behalf, including requests based on criminal activity of which they’re a victim or otherwise not at fault;
• A requirement that landlords honor abuse protection orders and other court orders (such as divorce decrees) that address access to or control of the unit; and
• A provision allowing for lease “bifurcation” (a fancy word for splitting into two) if both the victim and perpetrator in a domestic violence situation are parties to the lease, so as to evict the perpetrator and allow the victim to remain.

6 DISCRIMINATORY CRIME-FREE HOUSING PRACTICES TO AVOID

While the DOJ letter isn’t addressed to landlords, the things that it warns local governments not to do in creating and enforcing crime-free ordinances apply equally to landlords in creating and enforcing policies and practices to keep their own communities crime-free. Specifically, there are six discriminatory crime-free practices to avoid even if they’re permitted or required by your town’s crime-free ordinance:   

1. Holding Entire Households Accountable for One Person’s Actions

Like many landlords, you may have or are considering adopting a so-called “zero-tolerance” policy, a.k.a. a “one-strike” rule, providing for automatic and immediate eviction of tenants (or rejection of applicants) who engage in or allow others under their control to engage in criminal activity in their apartments. While defensible as a statement of moral principle, zero tolerance isn’t a workable strategy for complying with fair housing laws, particularly when the lease defines “criminal activity” triggering eviction rights broadly as including any violation of federal, state, or local laws, however minor, even if the tenant was actually a victim of the activity. “Housing providers should never evict a person or family because they have been victims of criminal activity,” according to HUD. That includes domestic violence, which we’ll discuss in more detail below.

Takeaway: According to HUD and the courts, exclusion for criminal activity is permissible when the person who engages in it poses a substantial threat to safety or property. That’s a strict standard that applies only to the individuals who actually engage in or are a party to the criminal activity. What you may not do is hold an entire household accountable for the acts of just one member or guest, especially when the tenant is the victim of the crime. We’ll discuss this principle in more detail in our analysis of domestic violence below.

2. Blanket Exclusion of Individuals with Criminal Records

Automatically excluding persons solely because they have a criminal history is another common but highly problematic practice. Explanation: While generally intended to keep the community safe and secure, HUD has repeatedly warned that such blanket restrictions tend to have a disparate and discriminatory impact on Blacks and other protected minorities. This assertion is well documented by statistics showing that across the nation, African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites with respect to their share of the general population. Accordingly, overly broad criminal background checking and blanket exclusion may result in fair housing liability.

Example: A Minnesota city got sued for implementing an ordinance requiring landlords to screen potential tenants for criminal history and use “crime-free” lease addenda permitting eviction for alleged criminal activity. The lawsuit claimed the ordinance was adopted with the intent to discriminate against, and had a discriminatory impact on, Blacks and members of other protected classes. The city ultimately rescinded the policy and paid $700,000 to settle the case [Jones v. City of Faribault, No. 0:18-cv-01643-JRT-HB (D. Minn. June 29, 2018)].

3. Exclusion on the Basis of Arrest Rather than Conviction

Rejection or eviction on the basis of criminal record is justified only when the individual has actually been convicted of a crime; merely being arrested isn’t enough. Explanation: As HUD guidance explains, an arrest, on its own, is merely an accusation and doesn’t prove that the person actually did anything wrong. Under our justice system, defendants are presumed innocent. To establish guilt, the criminal prosecutor has the burden of proving the charge beyond a reasonable doubt. Many people who get arrested are acquitted; others get their charges dropped and don’t even go to trial.

The problem with arrest records is that they often don’t show how the case was decided and whether the individual was prosecuted, convicted, or acquitted of the charges. As a result, HUD says that an arrest is not a reliable basis for determining whether a particular individual poses a substantial risk to safety or property.

4. Automatic Exclusion for Any Criminal Conviction

While a conviction is necessary to reject a rental applicant or evict a tenant, not just any conviction will do. HUD makes it clear that landlords must distinguish between criminal conduct that does and doesn’t indicate a substantial risk to residents’ safety or property. The consensus is that the conviction must be for a felony rather than a misdemeanor. But the landlord must also consider the nature of the felony. Based on case law, felonies justifying exclusion may include convictions for: 

• Illegal manufacture or distribution (but not mere possession) of drugs and other controlled substances;
• Sexual assault;
• Other violent crimes like homicide, assault and battery, domestic violence, robbery, and false imprisonment; and
• Arson, vandalism, and other crimes causing significant damage to property.

In determining whether to deny housing to a person who’s been convicted of a serious felony, landlords must also make an individualized assessment that considers potential mitigating factors, including:

• How long ago the felony was committed—the unofficial window is seven years, except for sexual assault convictions, which don’t have a shelf life and may be grounds for rejection regardless of how long ago they occurred;
• The circumstances surrounding the criminal conduct;
• How old the person was when they engaged in the conduct;
• Evidence that the individual has maintained a good tenant history before or after the conviction or conduct; and
• Evidence of rehabilitation efforts.

Takeaway: While criminal background screening is mandatory for some federally assisted housing, HUD recommends that private landlords consider not doing it. “Criminal history is not a good predictor of housing success,” HUD says, while noting that landlords “can rely instead on other screening criteria that more closely relate to whether an applicant or resident would be a good tenant, such as ability to pay rent, prior rental history, or personal references.”

5. Punishing Tenants for 911 Calls

As noted above, some cities have adopted ordinances permitting or requiring landlords to evict or take other adverse housing action against those who make so-called “nuisance calls” to 911, the police, or other emergency responders to request help. Obeying these rules exposes landlords to risk of liability under not only the FHA but other federal statutes protecting women, the disabled, and victims of domestic violence.

Example: In an attempt to crack down on unmerited and distracting 911 calls, a Minnesota city adopted an ordinance providing for punishment of landlords for “nuisance calls” to their properties, including what the ordinance described as repeated “unfounded” calls to the police. As part of the program, the city sent weekly reports to landlords enabling them to target tenants to evict for unfounded calls. The records detailed all calls for emergency service from their rental properties, often including names, addresses, diagnoses, medications, and other sensitive information about the caller’s disabilities. The DOJ fined the city $175,000, ruling that the ordinance and enforcement activities put tenants with mental health disabilities at risk of eviction for making emergency calls, thereby depriving them of their FHA and ADA rights of equal opportunity to receive emergency assistance [U.S. Dep’t of Just., City of Anoka, Minnesota, Consent Decree, Civil Action No. 0:24-cv-1861, U.S. Dist. Ct. Minn.].    

6. Punishing Tenants for Reporting/Experiencing Domestic Violence

One of the biggest problems with nuisance property ordinances targeting domestic violence is that they force landlords to take adverse action against not only the perpetrators but also the victims, such as rejecting an applicant who’s been assaulted by an intimate partner, in an effort to keep the assailant from seeking to enter your own property. HUD, DOJ, and the courts have made it clear that excluding domestic violence victims has a discriminatory impact on women and other minorities the FHA protects based on statistics showing that:

• 85 percent of all domestic violence victims are women;
• The rate of domestic violence against Black women is 35 percent higher than against white women; and
• Women of certain national origins and immigrant women also experience domestic violence at disproportionate rates.

Another variation on the punishing-the-victim theme is to take action against tenants for calling the police or seeking protection during a domestic abuse emergency, which may constitute a violation of both the FHA and VAWA. According to domestic violence victim advocacy groups, women faced with serious and even life-threatening violence are often reluctant to call the police because they don’t want to risk losing their lease.

Example: The father of a Michigan tenant’s child busted into her apartment and attacked her on repeated occasions. Each time, the tenant called the police. According to the American Civil Liberties Union (ACLU), the landlord, the Inkster Housing Commission, warned that she’d be evicted if she called the cops again. Fearing for her life, the tenant did call the police again when the abuser returned. The landlord then made good on its threat by seeking to evict tenant for allowing a “guest” to engage in violent activity in the unit. The ACLU sued under the VAWA, FHA, and Michigan fair housing law to stop the eviction and force the landlord to change its policy.

DEEP DIVE

Be Aware of Domestic Violence Victims’ Rights Under State Laws

In addition to refraining from discriminating against them, it’s critically important to determine whether your state and city have adopted any laws affording any special housing protections to domestic violence victims, which typically include:

Protection from Eviction: Some state laws protect victims of domestic violence, sexual assault, stalking, and other forms of abuse against evictions or non-renewal of leases due to the criminal acts or lease violations committed by their abusers. To use this protection, tenants generally must provide documentation such as a protective order or police report verifying that they’re the victim of abuse.

Bifurcated Eviction: Although you can’t evict the victim, you may have to evict the abuser, assuming that person is currently living in the same unit. When both are parties to the lease, state and local domestic violence may allow you to bifurcate the lease so that you can evict the perpetrator while allowing the victim to stay. Bifurcation may also be an option when the perpetrator is a household member whose name isn’t on the lease.

Changing the Locks: Changing a tenant’s locks without permission is normally a form of illegal self-help. But state laws may actually not only allow but require you to do so (or allow tenants to change the locks themselves) to protect tenants who provide notification and documentation of a realistic threat of domestic violence against them.

Letting Victim Out of Lease: Some state and local laws require landlords to allow tenants to end their lease early without penalty to escape a violently abusive relationship. Tenants must notify and provide the landlord documentation that they’ve suffered domestic violence within a specific period of time after an incident occurs.

WHAT TO DO WHEN YOUR CITY

HAS A DISCRIMINATORY CRIME-FREE ORDINANCE

The takeaway from this lesson is that you shouldn’t implement crime-free policies that violate federal laws, even if they’re permitted or required under the laws of your city. The DOJ letter signals that the federal government is working hard to get local governments not to enact discriminatory ordinances and take the ones that exist off the books. In fact, as the letter notes, several states (including California, Illinois, Iowa, Maryland, Minnesota, and Pennsylvania) have recently passed legislation banning many features of such laws, and a number of municipalities, including Atlanta, have voluntarily repealed their own ordinances.

Even so, potentially discriminatory rent-free laws remain in effect in many cities across the nation. There’s also the risk that your city will adopt such an ordinance in the future. To safeguard against this risk, you need to train your leasing and management staff in the principles set out in this lesson. Attorneys also suggest that you consider implementing a basic conflict-of-laws policy for identifying and responding to rent-free ordinances that require you to take actions that may run afoul of the FHA and other state and federal laws.

It’s also imperative that you talk to an experienced attorney who can advise you what to do in a situation where complying with a local law would expose you to liability for violating fair housing laws. The attorney may be able to help you craft a strategy to comply with both laws; if that’s not possible, the attorney should be able to help you ensure that obeying your paramount duty to follow federal law doesn’t get you into hot water with local authorities.