{"id":42978,"date":"2024-07-24T11:00:11","date_gmt":"2024-07-24T15:00:11","guid":{"rendered":"https:\/\/www.nahro.org\/?post_type=news&p=42978"},"modified":"2024-08-07T14:53:52","modified_gmt":"2024-08-07T18:53:52","slug":"hud-issues-guidance-on-the-use-of-technology-in-the-screening-process","status":"publish","type":"news","link":"https:\/\/www.nahro.org\/news\/hud-issues-guidance-on-the-use-of-technology-in-the-screening-process\/","title":{"rendered":"HUD Issues Guidance on the Use of Technology in the Screening Process"},"content":{"rendered":"\n

By: Garit Frye, Summer Policy Intern<\/p>\n\n\n\n

On April 29th<\/sup>, HUD published a notice titled \u201cGuidance on Application of the Fair Housing Act to the Screening of Applicants for Rental Housing<\/a>.\u201d The notice provides information about tenant screening companies, how liability under the Fair Housing Act works, general potential liability issues in the tenant screening process, how technology can pose further issues in the process, and recommendations on how housing providers can ensure a non-discriminatory screening process\u2014both for those using technology in the process and those that do not.<\/p>\n\n\n\n

Background on Tenant Screening Companies<\/u><\/strong><\/p>\n\n\n\n

Tenant screening companies gather and analyze information about applicants from various sources, then generate a report for housing providers. Those reports often contain a recommendation on whether the housing provider should accept or reject the applicant. The reports can vary depending on the amount of detail, what information is included, and how specific their recommendation is.<\/p>\n\n\n\n

HUD notes that tenant screening companies generally use automated software or Artificial Intelligence (AI) in their reporting process. However, many companies often do not disclose how their software works or what functions they perform in the process. The involvement of these systems can range from simply gathering information to determining the criteria for screening reports and generating them itself.<\/p>\n\n\n\n

Liability Under the Fair Housing Act<\/u><\/strong><\/p>\n\n\n\n

HUD notes that in addition to the Fair Housing Act prohibiting intentional discrimination in providing housing-related services, the Act also prohibits actions with an unjustified discriminatory effect. If an action is found to have a discriminatory effect, it violates the Fair Housing Act if it is either not necessary to achieve a substantial, legitimate, non-discriminatory act or a less discriminatory action could serve the same interest. Importantly for housing providers, the notice states they can be held liable for an action with a discriminatory effect, regardless of whether it was deliberate, how much the housing provider did or did not know about the action, or whether it was done by an agent (whether they had an apparent or actual relationship). Housing providers could be held liable for either intentional discrimination or actions with a discriminatory effect conducted by an automated system or AI at a screening company on their behalf.<\/p>\n\n\n\n

In addition to these general liability rules, HUD also provides some of the specific potential causes for liability issues in the screening process under the Fair Housing Act, including:<\/p>\n\n\n\n