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HUD Undertakes a Review of Uses of Criminal Histories

Recognition of Fair Housing Month and Second Chance Month

On April 14, HUD Secretary Marcia L. Fudge published a memorandum to HUD’s principal staff concerning, “Eliminating Barriers That May Unnecessarily Prevent Individuals with Criminal Histories from Participating in HUD Programs.” Secretary Fudge took this step as part of HUD’s response to President Biden’s 2021 Executive Order concerning racial equity and serving underserved communities. In addition to this memorandum, HUD published its Equity Action Plan (described in this issue of the Advocate), and Secretary Fudge announced that plan and the appointment of Adjoa B. Asamoah as Senior Advisor for Racial Equity on an April 14 White House Virtual Convening on equity initiatives undertaken by several federal agencies.

 

The Secretary’s Memo

In recognition of both Fair Housing Month and Second Chance Month, Fudge began by citing “daunting and unnecessary” barriers faced by individuals with criminal histories in accessing affordable housing. She also raised the concern that criminal histories may disproportionately affect People of Color and may represent an example of an illegitimate disparate impact prohibited under current interpretations of the Fair Housing Act.

Given these concerns, Secretary Fudge instituted a department-wide review of programs to ensure that recipients of HUD funds are as, “inclusive as possible of individuals with criminal histories.” That review should, “identify all … HUD regulations, guidance documents and other policies and subregulatory documents (including model leases and other agreements),” that may pose barriers based on criminal histories, and “propose updates and amendments … to make our programs as inclusive as possible.” Reviews should be informed by available data, feedback from listening sessions, and other relevant evidence. Each of HUD’s offices must complete this review and report on their proposals by October 14, 2022, to Richard Cho, HUD’s Senior Advisor – Housing and Services.

[HUD] Secretary Fudge instituted a department- wide review of programs to ensure that recipients of HUD funds are as, “inclusive as possible of individuals with criminal histories.”

Secretary Fudge’s memorandum cites HUD’s previous and ongoing efforts concerning the proper uses of criminal histories of applicants and participants, including Secretary Donovan’s and Assistant Secretary Henriquez’s 2011 letter to HA directors, Notice PIH-2015-19, and the unfortunate guidance published by HUD’s Office of General Counsel (OGC) in 2016. PHADA has commented extensively on these guidance documents that are discussed briefly below. Although Fudge’s memorandum does not describe any specific next steps, presumably HUD will proceed to implement some proposed changes operating offices suggest by October 14. Some changes may involve regulatory amendments requiring public notice and opportunities to comment, some may require changes to HUD’s information collections (forms) that undergo OMB reviews and include public notices and opportunities to comment, and the memorandum references listening sessions HUD may conduct in the coming 6 months. PHADA plans to monitor opportunities for PHADA, HAs, and the public to comment on HUD’s existing rules, guidance, policies, and subregulatory documents and any proposals to change those documents to address the appropriate uses of criminal histories. Secretary Fudge’s memorandum does not seem to entertain possible statutory changes involving the treatment of applicants’ and participants’ criminal histories.

 

HUD’s Previous Guidance

Secretary Donovan’s Letter

In 2011, Secretary Donovan and Assistant Secretary Henriquez wrote to HA executives urging appropriate use of criminal backgrounds in admission and continued occupancy decisions. The letter urged HAs to consider mitigating circumstances (e.g., evidence of rehabilitation, length of time since criminal offenses) when evaluating criminal histories where regulations permit that level of policy discretion.

 

Notice PIH-2015-19

On November 2, 2015, HUD published a notice concerning, “Guidance for Public Housing Agencies (PHAs) and Owners of Federally-Assisted Housing on Excluding the Use of Arrest Records in Housing Decision.” The notice properly observed that federal laws and regulations permit but do not require adoption of a so-called “one strike” policy requiring denial of admission or termination of assistance because of violent or drug-related criminal activity. Decisions to deny or terminate housing assistance should consider the nature of criminal activity and potentially mitigating circumstances.

The notice also properly advised that a history of arrests is not sufficient on its own to support decisions to deny or terminate assistance. Behavior underlying a history of arrests may support such decisions, but in these cases, denials and terminations must be based on problematic behavior, not on arrests.

Finally, the notice pointed out that HAs must offer applicants and participants sufficient due process to contest adverse decisions, dispute the records, or offer mitigating evidence related to problematic behavior.

 

OGC Guidance

In 2016, HUD’s OGC published a document on HUD’s web site entitled, “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions.” Unfortunately, this guidance document presented a series of procedural and content problems PHADA pointed out in a letter to the General Counsel. These problems included:

  • OGC’s attempt to create new requirements through “guidance,” without amending the department’s regulations and information collections consistent with the Administrative Procedure Act and the Office of Management and Budget’s procedures.
  • OGC’s misstatements of standards established by the United States Supreme Court for using a disparate impact standard in connection with fair housing complaints.
  • OGC’s contradiction of existing regulations and guidance documents.

PHADA wrote to the General Counsel raising these and other concerns with her guidance document in June 2016 but did not receive a response to those concerns.

Secretary Fudge’s memorandum has announced a major department-wide review of rules, policies, procedures, forms, and guidance affecting the admission to or participation in assisted housing programs by people with criminal histories. It is important for all housing stakeholders to remain alert to opportunities to participate in this review as they are able and to comment on proposed changes that may emerge from this review sometime after October 14, 2022.