Fair Housing: Regulations, Risks and Responsibilities

For both multifamily operators and residents, fair housing issues are a top concern. Policies are constantly evolving, making compliance particularly challenging.

During a webinar moderated by MHN Editorial Director Suzann Silverman, industry leaders weighed in on fair housing considerations, where resident concerns are most prominent and the best methods for avoiding violations and resolving complaints.

“Taking a fair housing class once a year is no longer enough,” said Anne Sadovsky, a longtime multifamily consultant and former Lincoln Property Co. executive.

Owners and operators need to be constantly keeping up with additions to regulations. And it’s now more important than ever as fair housing violation complaints are on the rise.

The National Fair Housing Alliance reports that there were 34,000 complaints filed with HUD or local organizations this year, noted Sarah Saadian, senior vice president of public policy and field organizing at the National Low Income Housing Coalition. That’s the most over the last three years.

“This is a major issue that needs to be addressed because the relationship between tenants and landlords has a direct impact on how people can live in their homes,” Saadian said.

While the increase in reported complaints does not necessarily correlate to an increase in housing discrimination, it does reveal the urgent need to tackle fair housing in a way that benefits all parties.

Recent fair housing policy updates

Regarding the policy updates that property owners and managers should be aware of, HUD has had a particularly busy couple of years, noted Sheila Salmon, an attorney and fair housing specialist at Reno & Cavanaugh. Within the last year the department has issued a final rule reinstating its 2013 discriminatory effects rule as well as proposing three other rules.

The proposed rules include provisions protecting women from violence, permanent 30-day notice requirements before evictions for nonpayment of rent, and perhaps most significantly, standardization of the criminal screening process for resident application and eviction decisions.

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WATCH HERE: Today’s Fair Housing Market: Are You Up to Speed?

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NMHC president Sharon Wilson Géno pointed out another percolating regulation to keep an eye on: the Affirmatively Furthering Fair Housing rule. The policy effectively requires recipients of federal funding to document how that money is being spent to further improve fair housing goals and objectives. But the largest looming issue is ultimately a housing supply shortage, something this regulation doesn’t necessarily alleviate.

“We just do not have enough housing, and when you don’t have enough of something, who does that impact the most?” Wilson Géno said. “It impacts many of the most vulnerable populations, including the folks that are in the protected classes under the Fair Housing Act.”

Should HUD be doing more or less?

From the owner and operator’s perspective, Salmon said, HUD has been overmanaging and overreaching in its fair housing policies. One specific concern is that the agency’s proposed criminal screening rule substitutes its judgement for the judgement of the operator or manager.

“Through this rule, HUD diminishes, or in some instances takes away, the discretion that’s afforded by statute, without any legal basis for doing so,” Salmon said. “And at the same time, in doing this we feel that there is a concern that this type of effort on HUD’s part will disincentivize participation in HUD programs.”

Todd Watkins, co-founder, COO & general counsel, RailField Partners, noted that the proposed criminal screening rule would effectively require operators to make societal judgements, which would open them up to fair housing claims.

In many situations, he observed, “people aren’t looking at lofty principles and policies and meta-analysis where they have to actually make a decision,” Watkins said. To that end, he believes it’s sometimes necessary to view and structure these policies and regulations from the ground up, beginning with the onsite team and staff that experience the situations.

Saadian hopes to see more changes soon that further support renters and stronger fair housing policy regulations.

“We want to see the Federal Housing Finance Agency go even further by imposing much more robust renter protections on federally backed mortgages, things like source of income protections, just-cause eviction standards, habitability and accessibility requirements and anti-rent gouging protections as ways to shift more power away from landlords and into the hands of renters,” she said.

Best practices for implementing fair housing

When it comes to handling fair housing complaints, as well as general best practices within an organization, Sadovsky thinks it is smart to have one point person.

“I think it would be good to have maybe a specialist or a resource person that will take it, run with it from there and relieve the onsite people,” Sadovsky said.

Whether it’s one point person or a team dedicated to fair housing rules, regulations and complaints, the MHN Voices panel agreed that having the onsite team deal with it on their own is too large a task.

Wilson Géno made the case that housing providers and residents are ultimately after the same thing: enough quality housing to meet the widely diverse needs of residents. To reach that goal, she recommends outlining precisely where owner and resident responsibility for fair housing lies.

Bringing things back to a human level, before getting into matters of law and ethics, could be a helpful step toward providing quality housing in a way that promotes fairness and respect.

Saadian noted that the panelists were on the same page about wanting to find a common ground where both landlords and tenants are able to reach their goals.

“It really does start with early proactive communication between tenants and landlords that’s positive,” she said. “And I think that that can go a long way to helping to head off problems when they do happen or resolving them when they can.”