HUD Issues New Civil Rights Guidance on Marketing, Application Requirements

HUD's Office of Fair Housing and Equal Opportunity (FHEO) recently released new guidance to reinforce requirements that HUD-subsidized multifamily housing’s marketing materials and application processes be designed to be inclusive of persons of all races and national origins. The guidance applies to the more than 1.5 million HUD-subsidized multifamily units nationwide, including Project-Based Rental Assistance, Section 202, and Section 811 subsidized units.

The guidance is designed to assist owners in understanding and implementing more inclusive practices that are less likely to produce discriminatory results. HUD-assisted owners are required to comply with Title VI of the Civil Rights Act of 1964, which states that no person, on the grounds of race, color, or national origin, shall be denied participation in, be denied the benefits of, or be otherwise subject to discrimination under any program or activity that receives federal financial assistance.

We'll discuss marketing practices, application distribution procedures, and waitlist management practices you can use to ensure all racial and national origin groups in your area have knowledge of and an opportunity to rent units at your site.  

Strategy #1: Advertise Site, Vacancies Broadly

When racial, ethnic, or national origin groups are underrepresented at a site compared to their representation among qualified housing-seekers in the market area or community, HUD says owners must evaluate how their marketing processes contribute to this imbalance and consider less-discriminatory alternatives.

HUD says an owner should aim "to ensure that all racial groups in a marketing area have knowledge of an opportunity to rent units in a particular building." A marketing practice that results in excluding members of a protected class and sticking to the marketing strategy with full knowledge of its predictable effect may violate fair housing laws. HUD's guidance identifies the following risky marketing practices that limit your applicant pool:

• Reliance on no advertising or word-of-mouth advertising, without additional efforts;
• Reliance on “For Rent” signs posted at the property, without additional efforts;
• Reliance on referrals from one or a very limited number of local organizations.

In contrast, HUD's guidance recommends using a variety of community contacts, media, and social media, covering a broad geographic area. These are more likely to equitably reach potential applicants. HUD suggests distributing detailed flyers and blank applications to local organizations across the market area with ties to a wide range of prospective applicants.

Since many organizations serve only a subset of eligible residents, in general, the more organizations that are contacted, the more likely your marketing efforts can reach a diverse pool of applicants across your market area. Also, partnerships with community contacts throughout the market area may be particularly effective for reaching potential applicants who have limited internet access, limited English proficiency, or who may otherwise require assistance in applying.

In addition to working with a wide range of local organizations, HUD says placing advertisements with local radio stations, newspapers, and newsletters, as well as posting advertisements in public places, such as buses, trains, and billboards can be effective in reaching additional applicants.

Strategy #2: Maintain an Informative Website, Online Presence

HUD notes that maintaining a web or mobile site with clear information about availability, eligibility, and application processes can be a low-cost way to inform potential applicants about housing opportunities at the site–especially those who have difficulty calling or visiting during business hours. The same applies for posting on social media, local listservs, and other sites relevant to those looking for low-income housing in the community.

In conveying pertinent information to the public, be sure to describe available units and amenities, and not residents. Any words, symbols, or pictures on your website shouldn't suggest that your site has a preference—for or against—anyone based on characteristics protected under federal, state, or local law.

The website may describe the grounds, its units, and features—but not the kind of people who may want to live there. Avoid phrases like, “Perfect for singles,” which imply a preference against families with children. Maps and directions are helpful, but avoid references to religious institutions or racially significant landmarks.

Be wary of posting pictures of people, including residents, employees, and others since these may raise potential fair housing concerns. It's unlawful to use “human models” in photographs, drawings, or other graphics to indicate exclusiveness because of race, color, religion, sex, handicap, familial status, or national origin. If you do post pictures online, choose pictures that reflect diversity so that anyone visiting the site would understand that your site is open to all without regard to race, color, national origin, religion, sex, disability, or familial status.

HUD advises that “models should be clearly definable as reasonably representing majority and minority groups in the metropolitan area, both sexes, and, when appropriate, families with children. Models, if used, should portray persons in an equal social setting and indicate to the general public that the housing is open to all without regard to race, color, religion, sex, handicap, familial status, or national origin, and is not for the exclusive use of one such group.”

Finally, just as you would do in traditional advertising and other marketing materials, use the Equal Housing Opportunity logo or statement in online ads and on your website to demonstrate your commitment to comply with fair housing law.

Strategy #3: Ensure Advertising Reaches LEP Individuals

Individuals who don’t speak English as their primary language and who have a limited ability to read, speak, write, or understand English can be limited English proficient, or “LEP.” National origin discrimination often involves immigrants or non-English-speaking individuals, but it can also involve native-born U. S. citizens based on their family ancestry, says HUD. The Fair Housing Act (FHA) prohibits owners from using limited English proficiency in a way that causes an unjustified discriminatory effect on people based on their national origin. For example, an owner can’t refuse to show or rent the housing just because the prospect cannot speak English.

In fair housing investigations, HUD also looks at language-based restrictions to make sure they’re not simply an excuse or pretext to cover up discrimination based on race or national origin. In some cases, LEP persons may speak English well enough to conduct essential housing-related matters or have a household member who can provide assistance as needed, so a blanket refusal to deal with LEP persons is probably not motivated by genuine communication concerns. If the housing provider or resident can access free or low-cost language assistance, HUD says that any cost-based justifications for refusing to deal with LEP persons would also be immediately suspect.

The Justice Department recently filed a Statement of Interest with a New York District Court for a lawsuit alleging that the owner violated the FHA by refusing to rent apartments to LEP applicants unless someone who speaks and reads English lives in the unit. The Justice Department's statement explains how policies that exclude rental housing applicants because they don’t speak English may violate the FHA. The lawsuit further alleges that the owner refused the applicants’ offers to bring their own interpreters to translate lease documents and assist with communications [CNY Fair Housing v. Swiss Village LLC, filed April 2022].

You can combat this type of discrimination by adopting more inclusive advertising practices. When conducting marketing and outreach, the presence of LEP persons among the eligible population in the community should be evaluated. If you have a significant number of LEP individuals in your community and they are least likely to know about or apply for housing at your site, you should consider marketing to them. You can target these groups without being too selective by running ads in the language of the group that you need to target. Have your ad translated into that demographic group's language and run it in conjunction with multiple ads (and languages) in various media outlets.

Strategy #4: Make It Easier for Applicants to Submit Applications

If your site has burdensome application procedures, HUD says these barriers to housing can functionally act as a denial that can exclude members of a protected group in violation of Title VI. For example, requiring applications to be picked up and/or submitted in person can function as a barrier, unjustifiably excluding potential applicants who can’t travel to the property because they don’t live in the neighborhood, have inflexible work schedules or caretaking responsibilities, rely on limited transportation options, or other reasons. Also, distributing and/or accepting applications only during a narrow window of time, such as one day or a few hours over several days, can also operate as barriers.

To ensure compliance with Title VI, HUD suggests making applications available on a site’s website, including the mobile version of the site’s website, distributing applications to community contacts throughout the market area, and accepting applications through a variety of methods, including in-person, mail, web-based forms, and email.

HUD also says owners should ensure that applications may be picked up and dropped off outside of regular business hours, including evenings and weekends. And distributing and accepting applications for longer periods of time will also afford a wider range of potential residents the opportunity to apply. Finally, placing applicants on a waitlist pursuant to lottery rather than by prioritizing those who are first to apply is similarly likely to yield a more diverse tenant body, particularly when there is very high demand for the units at a site.

Strategy #5: Reconsider Screening Criteria that Automatically Triggers a Denial

In a recent case, HUD's FHEO recently reviewed a Section 8 site owner's policies, processes, and practices with regard to marketing, applications, and waitlists, for compliance with Title VI. FHEO opened the review based on information indicating disproportionately low participation rates of Black, Hispanic, and Asian residents relative to the housing market area. The review sought to ensure eligible persons were not discriminated against in opportunities to learn about, apply for, and reside in HUD-subsidized housing on the basis of race, color, or national origin.

The owner eventually entered into voluntary compliance agreement in HUD that incorporates many of the strategies discussed here. The agreement requires the owner to commit to expending a minimum of $50,000 to advance fair housing choice in the region, including a minimum of $10,000 towards advertising and outreach (including website development); making applications available and accepting applications by mail, email, in person, and online; developing a revised language access plan; and temporarily waiving fees ordinarily charged to newly admitted residents. In addition, the agreement requires the owner to revise any policies that include an evaluation of credit or rental history consistent with civil rights laws and HUD’s guidance [HUD FHEO v. Pilot Cove Manor HDFC, Inc., Case No. 02-21-R005-6].

According to HUD, screening criteria, such as those related to criminal records, credit, and rental history, may operate unjustifiably to exclude individuals based on their race, color, or national origin. HUD has issued guidance regarding criminal records screening noting that housing providers shouldn’t rely on arrest records, and should consider the nature, severity, and recency of conviction records, as well as extenuating circumstances.

Similarly, in evaluating rental history, housing providers should consider the accuracy, nature, relevance, and recency of negative information rather than having any negative information trigger an automatic denial. For example, suppose an applicant was evicted for nonpayment of rent at a market-rate property. This may have little bearing on the applicant’s ability to pay rent at a subsidized property and may in fact be the reason why the applicant is seeking subsidized housing. Also, records from eviction or related cases in which the tenant prevailed or that were settled without either party admitting fault do not necessarily demonstrate a poor tenant history. Extenuating or mitigating circumstances may apply, such as an eviction that was due to unexpected medical or emergency expenses.

The guidance also reminds owners to allow for alternative methods of proof when possible, for applicants to establish residency or qualify for other selection preferences. Persons living in housing insecurity may reasonably not have physical addresses, reliable mail, leases, utility bills, or other documentation. And you should allow applicants to specify a preference for how they would like to be contacted about their continued interest in the housing opportunity or other updates, including by mail, email, or phone.

HUD to Evaluate and Update

Criminal Background Screening Policies

HUD Secretary Marcia Fudge recently sent a memo to agency staff instituting a HUD-wide effort to review programs and "put forth changes that ensure that our funding recipients are as inclusive as possible of individuals with criminal histories." The memo directs all relevant HUD programs, including the Office of Housing, to identify all existing HUD regulations, guidance documents, and other policies that may pose barriers to housing people with criminal histories. This review includes regulatory and sub-regulatory documents such as model leases and other agreements. And by Oct. 14, 2022, HUD offices are directed to propose updates and amendments to agency documents and guidance to make HUD programs as inclusive as possible.

"At HUD, we recognize that individuals with criminal histories too often face daunting and unnecessary barriers to obtaining and maintaining housing, including public housing, HUD assisted housing, and HUD-insured housing, which are often the only types of housing they can afford," states Secretary Fudge in the memo. "As we seek to implement an equity agenda, it is incumbent upon all of us to ensure that, to the full extent permitted by law, we are administering HUD programs in an inclusive way and that we are requiring and encouraging our program partners to be similarly inclusive."

The HUD memo says this latest effort builds on previous HUD directives with regard to criminal history screening. In particular, it builds on the 2016 guidance from HUD's Office of General Counsel that set out best practices for housing providers to "treat people as individuals rather than reducing them to their criminal histories." The best practices in the guidance include:

• Avoiding exclusions based on arrest records only;
• Ensuring that any reliance on conviction history is based on evidence showing that it will actually promote safety; and
• Ensuring that any exclusion based in part on conviction history also takes into account mitigating circumstances such as time that has passed since the conviction and evidence of rehabilitation or good tenant history in the more recent past.