Entities

Department of Housing and Development (HUD) (27)

Department of Justice (7)

National Consumer Law Center (NCLC) (26)
Topics and Issues

Algorithms (12)

Fair Housing Act (FHA) (3)

Residential/Tenant Screening (81)

In January 2023, the DOJ and HUD filed an amicus brief in a tenant screening case pending before the U.S. District Court for Massachusetts. The case is Louis v. SafeRent Solutions. The amicus was filed because “[t]he United States has a strong interest in ensuring the correct interpretation and application of the FHA’s pleading standard for disparate impact claims, including where the use of algorithms may perpetuate housing discrimination.” Among other points raised by the government’s amicus is the key point for CDIA and its members that the FHA applies to residential screening companies, Including SafeRent.

CDIA filed an amicus in the matter in February 2023. The District Court heard oral argument in July 2023 on the motion to dismiss.

This case has broader implications for tenant screening, and potentially credit scoring in general.

The government’s amicus says that

When SafeRent provides an applicant’s final score along with “approve” or “deny” language to the housing provider, the provider does not see what SafeRent’s algorithm considered to make the assessment. As set forth in the Amended Complaint, SafeRent “effectively controls the decision to approve or reject a rental application.” Plaintiffs also allege that housing providers, including Defendant Metropolitan, relied on the outcome of SafeRent’s screening in offering housing.

The government’s amicus follows the plaintiff’s opposition to SafeRent’s motion to dismiss. As noted in a recent Law 360 article (paywall), the plaintiffs

pushed back on the argument that SafeRent is not subject to FHA, citing the Connecticut Fair Housing Center v. CoreLogic Rental Property Solutions LLC case in 2019 that said other entities besides providers can be held liable under the FHA for delivering decisions on tenant acceptability to providers.

. . .

‘SafeRent Scores are based on information that is not predictive of whether anyone can pay their rent,’ Louis and Douglas said in the memorandum. ‘Even if those factors were predictive, however, the resources needed to pay 25% of rent are not the same as those needed to pay 100% of rent, yet SafeRent is using the same yardstick for both.’

[The plaintiffs] pointed out that, in 2022, guidance from the Housing and Urban Development Office of Fair Housing and Equal Opportunity specifically mentioned applicant screening as a practice that could disproportionately exclude people based on race, color or national origin.

‘Through various pieces of guidance, HUD has cautioned that housing providers do not have a blanket license to use credit history to screen tenants,’ Louis and Douglas said. ‘To the contrary, HUD has repeatedly emphasized that the FHA limits the use of credit information — in addition to rental history and other information — where it may create unnecessary barriers to housing opportunity in a way that disproportionately excludes individuals based on their protected class. That is exactly what plaintiffs have alleged here.’

The case is Mary Louis et al. v. SafeRent Solutions LLC et al., U.S. Dist. Ct. (D. Mass.), No. 1:22-cv-10800. Plaintiff counsel: Greater Boston Legal Services, Cohen Milstein Sellers & Toll PLLC, and National Consumer Law Center. SafeRent counsel: Covington & Burling. Metropolitan Management Group counsel: Mintz Levin Cohn Ferris Glovsky and Popeo PC.

Relevant Documents:

Additional Resources: