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Presidential Contenders Reflect Factions of Their Parties

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June 2017

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While it was raining cats and dogs in May, I found it hard to think about the fact that it is actually Spring. Then along came the sharks off the Long Beach coast to take the place of the rain. Now, I must confess that I like sharks and have been on two shark feeding dives in Tahiti—which I enjoyed. In fact, one of my bucket list items is to dive with Great White Sharks along the Great Barrier Reef—in a cage. So, I don’t mind taking risks but there is a limit to just how far I will go.

That brings me to a different kind of shark. One that I will call the Legislative Shark. This shark has some of the same traits as those who swim in the ocean. They are slow and methodical in nature and can appear almost docile if you are not aware of their behavior, since they don’t reveal their intent until the time is right. Then, they can attack quickly, take a bite out of an innocent bystander and leave you again without any reservation only to look for another victim.

Of course my analogy is in reference to our recent success with AB 1506. Then the word of a Just Cause Eviction Ordinance that just passed in San Jose. Now AB 1506 will surface again and we need to be better prepared to fight this bill even harder. But the ordinance recently passed in San Jose is not good news for our industry and the renters rights advocates are firmly latching on to this news and hoping that more tenants will join in the fight for rent control. Are you ready to join in the fight against this yet? If not, there is no time to wait and we need to make sure that ALL of our owners/landlords are members of AACSC to help us in this effort. So if you know of owners who are not members, please make sure to let them know that AACSC is the Association to join and is the one organization that lobbies on their behalf.

AACSC is actively creating programs and making suggestions to improve and increase our visibility with the Long Beach City Council and within our surrounding territory. Be part of the change and stay aware and involved.

On another front, we are happy to report that the Redondo Beach group is going strong and adding members to their monthly networking group. If you are looking for a new group to add to your networking list, this is a great choice. They meet the first Tuesday of each month at the American Legion facility on Camino Real in Redondo Beach. I know I’ll be back and hope you will join us there.

Next, be sure to look at our Trade Show flyer and get your booth reservations in early. This is sure to be another sell out. We will once again be at the Long Beach Convention Center, but in a NEW location—the Arena, also known as the Pacific Ballroom! This is a great spot and we are excited to announce this.

We are also changing things up this year for our Annual Awards Breakfast. Along with a GREAT theme, we will be updating and professionalizing our judging criteria. Beginning this year, we will be sending out the applications for awards and the judging will NOT be in-house. EVERYONE is eligible to be nominated; yes, that means non-members, too! Be sure to fill out ALL of the information on the application as any incomplete submissions will not be accepted. I have been judging for other state award ceremonies around the country and it is a great way to show off what you are doing for the industry, so polish off your pens and get ready to show the best side of your accomplishments.

Finally, I hope that you had a safe Memorial Day weekend and we want to extend our appreciation to all of those who have sacrificed so much for our liberties. One final mention is to the family of former Long Beach Mayor Ernie Kell who passed away on April 29th. The outpouring of love for him and his family was wonderful and he will clearly be missed by so many.

Potential Section 8 Program Changes

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I am excited to share with you all the great news regarding the legislative successes that we’ve had so far this year. Let’s begin on the local front. We are tackling the local problem with the Section 8 Housing Voucher Program, and working closely with Long Beach Vice Mayor Rex Richardson to streamline the program to make important changes. The current recommendations include the following: streamlining the Housing Choice Voucher inspections, waiver of certain permits and inspection costs for apartment owners who accept the Housing Choice Vouchers, and creating a damage mitigation fund to provide financial assistance to landlords to mitigate damage caused by tenants during their occupancy under the Housing Choice Voucher Program. The last and maybe best improvement is to make vacancy payments to landlords to hold units while the landlord is going through the approval process.

These potential changes will make the Section 8 program one that all landlords should be looking at. Here’s why this is such an important achievement. The Housing Choice Voucher Program (Section 8) has been struggling for years and has desperately needed some attention. The staff and Board of AACSC helped to identify issues that have sidelined the program. AACSC worked with the City and together are working on resolutions that will help both landlords and tenants. More important than this is that it demonstrates once again that AACSC can be very effective in improving the business environment for landlords and will continue to do so for the foreseeable future.

On the State front, members of AACSC’s legislative committee and our Executive Director, Johanna Cunningham, traveled to Sacramento and with our lobbyist, Ron Kingston, spent several days meeting with and educating members of the State Senate and Assembly on the merits of various proposed bills they will be considering this year that will directly affect the rental housing industry. The most egregious bill that we lobbied against was AB 1506, a bill to repeal the Costa-Hawkins Act, which is our main legislative protection against runaway statewide rent control laws. Our efforts helped force the bill’s author (Bloom) to remove the bill from consideration for this year. (He plans to reintroduce it again and we will need to continue to be ready to respond.)

I also think it’s important for you to know that the AACSC members who made the trip to Sacramento did so at their own expense. These passionate individuals feel so strongly about our industry that they are willing to sacrifice their time and money for your benefit. We all owe them a sincere Thank You! One of the main reasons that we were successful was that our lobbyist, Ron Kingston, had us so well prepared. Ron provided us with concise summaries of every bill that we discussed in our meetings. He arranged all the appointments with the legislators and gave us detailed background information on every legislator we met with. We knew our stuff in those meetings and it paid off. Ron did a terrific job for us, and we’re lucky to have him. That’s all for now. Thanks for your continued support.

Q & A: HUD’s New Criminal History Screening Guidelines for Housing Providers

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In April 2016, U.S. Department of Housing and Urban Development

(HUD), the enforcement agency of the federal Fair Housing Act, issued new guidelines concerning criminal history screening procedures. Under the guidelines, housing providers may be found liable for dis crimination if their criminal history screening policies and decisions have a disproportionate “discriminatory effect” on a protected class (also called “disparate impact”). This type of discrimination is based on the net negative impact that a housing provider’s criminal history screen ing policy has on a protected class as a whole. Under this theory of discrimination, an owner can be liable for discrimination even if he or she had no intention of discriminating.

The new guidelines are based largely on social, political and legal trends, including a recent Supreme Court decision upholding a hous ing discrimination lawsuit based on the “disparate impact” theory of discrimination (explained in more detail below).

The purpose of this Q & A is to help housing providers to better understand the new guidelines, and provide information germane to updating rental applicant screening processes.

EXECUTIVE SUMMARY

Overview of HUD’s New Criminal History

Screening Discrimination Guidelines


Summary: Housing providers can be liable for discrimination, regardless of intent, if their criminal background screening policies have a “disparate impact” or “discriminatory effect” on a protected class of persons.

Disparate Impact Theory of Discrimination: Tenant screening policies that restrict access to housing based on criminal history can have a disproportionate negative impact (or discriminatory effect) on minority populations because statistically certain minority populations are arrested, convicted and incarcerated at rates disproportionate to their share of the general population.

Legitimacy of Criminal History Screening:

1. Because criminal history screening polices can have a discriminatory effect on minorities, a criminal history-based policy that restricts access to housing is lawful only if it is “necessary to serve a substantial, legitimate, nondiscriminatory interest.”
2. A criminal history screening policy based on resident, employee, and property safety may be legitimate, so long as the policy actually assists in protecting resident safety and/or property.
3. Bold assertions based on generalizations or stereotypes that any individual with an arrest or conviction record poses a greater risk than any individual without such a record are not sufficient.

Criminal History Screening Factors to Consider:

Policies that exclude tenants based on criminal history must consider the following factors:

a. The nature and severity of the conviction (i.e. conviction must relate and be of substantial and legitimate concern to resident and/or property safety).
b. Recency of the conviction (i.e., the more time that has passed since the conviction, the less relevant it is to resident and property safety).
c. Mitigation (i.e., countervailing circumstances that reduce concern for resident and property safety).

Excludable Offenses: Policies and practices that exclude applicants for violent felonies, sex offenses, and destruction of property are justifiable and appropriate in the housing context, so long as the Criminal History Screening Factors are considered.

Policies and Practices that are Discriminatory:

Policies and practices for excluding applicants based on any of the following criteria will likely be deemed discriminatory under the Fair Housing Act:

a. Arrests;
b. Blanket prohibition on leasing to persons with any conviction record without considering the factors;
c. Certain non-violent crimes (i.e., bigamy);
d. Certain victimless crimes (i.e., gambling).

QUESTION & ANSWER SECTION

What are the new housing discrimination guidelines, and where did they come from?

Previously, it was thought that rental property owners could deny or exclude renters based on any arrest or conviction in an applicant’s background, without fear of violating discrimination laws. After all, criminal history has never been a protected category in the discrimination context. Criminal history remains an unprotected discrimination class; however, new housing discrimination guidelines establish that housing providers can be found liable for discrimination if certain criminal background screening policies or procedures are practiced. The guidelines appear to be partially based on a recent U.S. Supreme Court decision upholding the “dis parate impact” theory of discrimination in the hous ing context and partially based on changing social, cultural, legal and political norms. (Texas Depart ment of Housing and Community Affairs vs. Inclusive Communities Project, Inc., 576 U.S._ (2015).)

The following are guiding principles of HUD’s new guidelines:

a. A housing provider’s criminal history screening policy must be necessary to serve a substantial, legitimate, nondiscriminatory interest.
b. A criminal history policy based on a crime against a person and/or property may be legitimate so long as the policy or practice actually assists in protecting resident safety and/or property.
c. Bold assertions based on generalizations or stereotypes that any individual with an arrest or conviction record poses a greater risk than any individual without such a record are not sufficient.

It should be noted that HUD’s guidelines do not establish new regulations or laws. Instead they reflect how HUD interprets new or existing laws, and how it will or intends to enforce the law. The new guidelines, therefore, reflect HUD’s interpretation of recent case law on the matter, and how it will analyze and address criminal history screening issues in the future.

What is “disparate impact” or “discriminatory effect”?

The terms “disparate impact” or “discriminatory effect” generally describe a legal theory for finding discrimination not based on intent, but based instead on the adverse effect that an arbitrary or unproven policy disproportionally has on a protected class of people. More specifically, if the net result of a screening policy excludes a substantial percentage of minorities, as compared with nonminorities, from a rental property owner’s rental application pool, it likely has a “discriminatory effect” on those minorities. If the screening policy has a discriminatory effect on minorities, the policy may be legally discriminatory if the policy is not “necessary to serve substantial, legitimate, and nondiscriminatory interests.”

In the context of criminal history screening policies, according to HUD, African American and Hispanic applicants are arrested, convicted and incarcerated at rates disproportionate to their share of the general population. As such, screening policies that exclude applicants based on criminal history can have a disproportionate adverse impact (or discriminatory effect) on African Americans and Hispanics.

Because these tenant screening practices can have a discriminatory effect on minorities, HUD has developed guidelines for housing providers to follow, to ensure they are not discriminating against housing applicants.

Under the guidelines, a policy is not discriminatory in the legal sense just because it has a discriminatory effect or a disproportionate negative impact on a minority class. Housing providers are entitled to screen and exclude based on information they learn through the screening process, but the policy must not be arbitrary, or based on generalizations or stereotypes. Instead, the policy must be “necessary to serve substantial, legitimate, and nondiscriminatory interests.”

Do the guidelines prohibit consideration of all criminal history?

No. Housing providers may still consider criminal history, and may deny an applicant because of prior criminal convictions. Consideration of crimes against a person and/or property including the potential danger or risk an applicant poses is still paramount in the screening process. Owners need to know whether a prospective tenant may be dangerous to other tenants or the property and be able to exclude those applicants that pose a threat. No longer allowed, however, are consideration of arrests that did not lead to a conviction, and the arbitrary exclusion of housing applicants with any prior criminal convictions without considering the following Criminal History Screening Factors (hereinafter referred to as the “screening factors”):

Criminal History Screening Factors
Nature & Severity Recency Mitigation
Offenses that are less than risky to resident/property safety:
  • Offenses unrelated to resident/property safety (ie. tax evasion)
  • Minor Offenses (ie. public intoxication)
  • Certain victimless crimes (ie. gambling, drug possession)
  • Certain non-violent offenses (ie. bigamy)
Offenses that are riskier to resident/property safety:
  • Violent felonies
  • Sex offenses
  • Property crimes
Other factors to consider:
  • Repeat offender
  • Misdemeanor vs. felony
  • The more time that has passed since the conviction, the less risky the applicant is to the safety of residents and property.
  • Juvenile convictions have less bearing on risk to resident / property safety
  • Facts and circumstances surrounding criminal conduct
  • Age of the applicant at the time of conviction
  • Evidence of god tenant history before/after conviction
  • Evidence of rehabilitation: state issued certificate of rehabilitation, probation officer reports, stable employment, school or training history
  • Evidence of treatment: completion of drug and/or alcohol counseling, anger management, rehab
  • Letters of recommendation
  • One-time offense


With respect to mitigation, housing providers may also consider factors that reflect negatively on the applicant such as subsequent or multiple convictions, no records of stability (tenancy, employment, treatment), poor prior tenant history, poor probation reports, etc.

If an applicant discloses that he or she was convicted of a crime against a person or property, an owner or manager may request further information from the applicant and from a regulated bureau that provides personal information about an applicant. Should an owner or manager seek additional information from one or more of these bureaus, written authorization must be obtained from the applicant prior to a report being requested or written.

What kinds of convictions should housing providers look out for?

Under HUD’s guidelines, housing providers may always exclude applicants who have been convicted for manufacturing or distributing controlled substances. Additionally, lifetime registered sex offenders are prohibited in federally-assisted housing. Beyond those automatic exclusions, HUD’s guidelines require applying the screening factors from the chart above to avoid liability.

At least for now, the screening factors should even be applied to violent felonies like murder, arson and rape. By application, a 60-year-old applicant with a juvenile arson conviction for burning a small shed when he was 10 years old, in which no one was hurt, may be less of a risk to resident and property safety than someone with a more recent arson conviction in which victims were injured. More often than not, housing providers will be able to justify excluding applicants with these kinds of violent felonies in their background.

Other felonies that are related to and threaten resident and property safety include kidnapping, sex offenses, domestic violence, assault and battery, destruction of property, false imprisonment, weapons charges, robbery, burglary, breaking and entering, and stalking. Again the exclusion will depend on the screening factors. Convictions that do not necessarily threaten resident or property safety but nonetheless should be analyzed by applying the screening factors include drug possession, misdemeanors, financial crimes including embezzlement, and fraud. Depending on the severity, frequency and circumstances, these crimes may or may not bear on an applicant’s appropriateness for tenancy.

Some argue that the guidelines go too far in this regard; that housing providers should automatically be able to exclude those with certain kinds of violent felonies in their background regardless of the screening factors. HUD may well change their policy in the near future, but until such time, it would be prudent to follow the guidelines. At the very least, housing providers would be well served by drafting a written policy highlighting its reasoning for excluding those with violent felonies.

What tenant screening criteria is prohibited?

The following are guiding principles:

  • Do not ask about, consider or screen for arrests or charges not leading to a conviction;
  • Only exclude for crimes that affect safety of residents and property, and ability to pay rent;
  • Except for drug manufacturing and lifetime registered sex offenders, do not establish a policy that automatically excludes an applicant for a specific prior crime;
  • To the extent possible, evaluate each applicant on a case-by-case basis based on nature and severity, recency, and mitigating factors.


At what point in the screening process should criminal history be considered?

HUD recommends the following: “By delaying consideration of criminal history until after an individual’s financial and other qualifications are verified, a housing provider may be able to minimize any additional costs that such individualized assessment might add to the applicant screening process.”

Do housing providers have a duty to conduct criminal background checks?

Housing providers have no legal duty to conduct a criminal background check. (Castaneda v. Olsher, 41 Cal.4th 1205, 1217 (2007), as modified (Oct. 17, 2007).) Circumstances may arise, however, that create a duty to perform a background check on a particular applicant or tenant. For example, if the housing provider becomes aware from a reliable source that the applicant or tenant has a criminal background that poses a risk to other tenants or the property, a background check may be required.

Another reason a housing provider may need to run a background check is if the provider witnesses, or reliably becomes aware of, dangerous or illegal conduct of a tenant. Performing background checks on prospective tenants is just a good common sense practice to ensure safety to tenants and property. But remember, it could be discriminatory to selectively run background checks on some prospective tenants and not others. If you are going to screen for criminal convictions, you should screen all housing applicants.

Should housing providers check the State’s online sex offender registry list?

To protect the safety of other tenants, housing providers are permitted to check the State’s “Megan’s Law Home” online sex offender registry to determine whether an applicant or tenant is listed. (California Penal Code, Section 290.46.) It should be noted, however, that while sex offender status is not a protected class, information on the sex offender registry may only be used “to protect a person at risk.” (Attorney General Opinion No. 05-301, April 27, 2006.) Women and children likely qualify as persons at risk. California law also requires housing providers to disclose the exis tence of the statewide database of registered sex offenders in every lease and rental agreement. (See, Cal. Penal Code, Section 290.46.)

Can criminal history screening be discriminatory in other ways?

Yes. HUD’s guidelines point out that housing providers violate the Fair Housing Act if they intentionally discriminate against an applicant in a protected class through the use of criminal history information. Examples of direct discrimination include the following:

  • Intentional discrimination may be proven based on evidence that a housing provider rejected a Hispanic applicant based on his criminal record, but admitted a non-Hispanic Caucasian applicant with a comparable criminal record.
  • Similarly, if a housing provider has a policy of not renting to persons with certain convictions, but makes exceptions to it for Caucasians but not African Americans, intentional discrimination exists.
  • A disparate treatment violation may also be proven based on evidence that a leasing agent assisted a Caucasian applicant seeking to secure approval of his rental application despite his potentially disqual ifying criminal record under the housing provider’s screening policy, but did not provide such assistance to an African American applicant.
  • Discrimination may also occur before an individual applies for housing. For example, intentional discrimination may be proven based on evidence that, when responding to inquiries from prospec tive applicants, a property manager told an African American individual that his or her criminal record would disqualify him or her from renting an apartment, but did not similarly discourage a Caucasian individual with a comparable criminal record from applying.
  • Discrimination can also be shown where a housing provider did not actually know of an applicant’s criminal record at the time of the alleged discrimination.
  • Additionally, shifting or inconsistent explanations offered by a housing provider for the denial of an application may also provide evidence of pretext.


Ultimately, the evidence that may be offered to show that the plaintiff or complainant’s criminal history was merely a pretextual justification for intentional discrimination by the housing provider will depend on the facts of a particular case.

Do these guidelines apply in the employment context?

Yes, disparate impact theory of discrimination applies in the employment context as well. Thus, any hiring decisions that are made based on criminal history should follow these guidelines.

Is there a best practices approach to criminal history screening?

Yes. The National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC) recommend the following “best practices” to criminal history screening practices for housing providers (Skojec & Cianfichi, “Criminal Conviction Screening Policies: Best Practices to Avoid Disparate Impact Liability,” NMHC/NAA joint Legislative Program, White Paper, May, 2016):

  1. Develop a written criminal history screening policy.
  2. Determine legitimate interests.
  3. No automatic conviction exclusions.
  4. Ignore arrests.
  5. Apply screening policy equally and consistently.
  6. Individually assess record and conduct.
  7. Narrowly tailor inquiries about criminal convictions.
  8. Train staff.


Should housing providers consult with an attorney?

Housing providers are legitimately wary of the new guidelines because of the new liability it creates. Formerly, a blanket exclusion of applicants with any criminal record was an easy policy to understand, and required little, if any, legal advice to enforce. The new guidelines, on the other hand, now require housing providers to rethink and reformulate their screening policies to ensure complex legal standards and theories of discrimination are not being violated. Housing providers are under standably concerned. Rental property owners would be well served to consult an attorney to discuss the formulation of a criminal background screening policy. It should also be noted, however, that due to public concern and complaints, the federal government will likely issue new and clarified regulations or guidelines pertaining to criminal background screening in the near future. Until then, read the new guidelines and discuss your options with an attorney. http://portal.hud.gov/hudportal/documents/huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf

The information provided herein is the opinion of the authors and is intended to give general guidance and awareness and shall not be construed in any way as a substitute for individual legal advice. Those that require legal advice should consult an attorney.

Ron may be reached at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

New 2016 AACSC Board President Installation

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Steve Schiro
2016 AACSC Board President

We invite you to the installation of the new AACSC 2016 Board President, Steve Schiro, on January 29th at the Virginia Country Club in Long Beach.

 

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California Southern Cities
333 W. Broadway St., Suite 101
Long Beach, CA 90802
(562) 426-8341

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