Why everyone should care about F.A.I.R.

F.A.I.R. is fair!

On Wednesday, May 29, Portland’s City Council will convene at 6 PM for public testimony on a groundbreaking and critical new tenant protection ordinance. All renters will be positively impacted by this ordinance, but particularly those in our most vulnerable communities: People of color, people with disabilities, families with young children, and low-income renters.

To explain what the F.A.I.R. ordinance does, it’s useful to understand the larger context of the problems it is trying to solve. (But if you want to jump to the nuts and bolts, click here.)

A little historical background and context

Most people are at least vaguely familiar with the Fair Housing Act passed in 1968, which made it illegal to discriminate in the sale, rental, or financing of housing on the basis of race, religion, national origin, and sex, and was amended in 1988 to include family status and disability. (Many states and local jurisdictions have additional protected classes, such as creed, marital status, gender, source of income, and sexual preference.)

Prior to the assassination of Dr. Martin Luther King, the Act had been unpassable in Congress for years because of lack of political will and courage. It was passed expediently after Dr. King’s death as a way to honor him and his commitment to housing justice. The Act was an obvious victory for the participants of the 1966 Open Housing marches in Chicago, which were organized and led by Dr. King, and demanded an end to racial discrimination in housing.

The Fair Housing Act was a game changer. Among other things, landlords could no longer explicitly refuse to rent to someone from a protected class, and proveable discrimination is heavily penalized in Fair Housing cases.

But as we all know, making something illegal doesn’t make it go away, especially when institutionalized and deeply held beliefs and biases are concerned.

When doing something is unlawful, the obvious and easiest way to avoid punishment is to not do the thing, but anyone who’s consumed alcohol before their 21st birthday knows, when something we want to do is illegal, we just find a way around the law, or find ways to do it and not get caught.

When it comes to housing there are a thousand ways to get away with discrimination against tenants in protected classes.

And here’s the thing, it’s just not Trump-loving racists who eagerly deploy these tools — there are plenty of well-intentioned and socially conscious landlords who don’t even realize how their implicit bias can be used to steer someone away from applying for their property, or why their screening criteria might prevent Black tenants from getting approved, if they even bother applying.


The Status Quo

Most renters in Oregon know that when they find a place they want to rent, they have to fill out an application, pay a fee, and then nervously wait to find out if they are approved.

There’s plenty of reason for worry.

Most landlords have a fairly standard set of requirements, though they differ in the specifics:

  • Income of at least 3x the rent
  • Good credit
  • No criminal background
  • No evictions
  • Good rental references

Some landlords may specify the credit score or what types of financial issues, crimes, or rental history will result in disqualification. But some just say “good credit and rental history” and reserve their right to be selectively subjective.

But even a stellar tenant with A+’s in every category has a reason to be anxious while they wait for the landlord’s decision. Because in a tight rental market, some rentals will be highly sought after and a stellar tenant could be one of many the landlord is considering renting to.

This was copy/pasted from an add on Craigslist. Most aren’t any more thorough than saying you’ll have to pass a credit and background check. What does “pass” mean?

If a landlord collects and screens multiple applications, Oregon law allows them to pick their favorite approved application, as long as they aren’t picking it for discriminatory reasons as prohibited by state law and the Federal Fair Housing Act. For example when a landlord chooses the childless white couple without kids, instead of the Black single mother, it can’t be because of race or children. However, it can be because the landlord just got a “better vibe” from the white couple.

When it comes time to notify the unlucky tenant that their application is denied, the landlord has to give a reason. But the reason, explicitly allowed by state law (ORS 90.304), can be “rented to another applicant”.

How would anyone know if the landlord picked the other tenants because they were white, childless, able-bodied, heterosexual and gender-conforming?

WE DON’T.

And this is just one way that landlords routinely get away with not renting to people of color and members of other protected classes.

Indeed, when state law was changed recently to prohibit landlords from holding an eviction against a tenant if it was dismissed or settled in favor of the tenant, the landlord lobby’s chief lobbyist, Cindy Roberts, published a legislative update telling landlords that nothing prevents them from calling the former landlord to check rental references, and then they can likely find out the story behind the eviction. (I found this document a few years ago and while I’m sure I saved it SOMEWHERE, I can’t find it and once the tenant movement started holding the landlord lobby accountable for their impunity it disappeared from the interwebs.)

And who knows if the former landlord would even give an honest and unbiased accounting of their former tenant’s rental history?

When an application is denied, a tenant as the right to ask for a reason, but along with “dwelling has already been rented”, a landlord can say “negative rental history” without providing any further information. They are under no obligation to say what information was shared, or by whom. So the tenant has no ability to explain, correct, or refute the information. The landlord-tenant relationship is often tense, and can be antagonistic, especially in the end of a tenancy. A frequent question asked during reference checks (which are completely unregulated) is “would you rent to the tenant again”. How does the inquiring landlord know that the previous landlord’s “no” actually means “no, because kids are too hard on my property”, or “no, because they used the law to force me to fix the heat”? We don’t.

Another common question used in the rental reference check is, “Were there any complaints from the neighbors”? Again, this is often sufficiently answered by a simple yes or no. Often the reference is a simple form sent by the screening company that only asks for yes/no answers. So what if the complaint didn’t have merit? Or was biased in some way? What if the complaints were about noise from kids running around in a 2nd floor apartment? Or exaggerated or false complaints called-in because the tenant neighbors are in a dispute? What if? Too bad.

It should come as no surprise that people of color, families with children, trans folks, and people with mental health related disabilities are disproportionately plagued by negative rental references — that they have no recourse to correct or explain.

It should also come as no surprise that these same people — as well as anyone who isn’t on the winning side of income inequality — might not even be lucky enough to get denied for bad rental history, because they didn’t even bother applying because they don’t make 3x the rent. (Rent is considered “affordable” if it is only ⅓ of your income. It’ a bad metric, but that’s another essay.)

But most people still get the rent paid, even if they can’t “afford” it, since having a roof over your head is prioritized above even food, medical care, household necessities, heat, etc. When the rent is too damn high and wages (and public benefits) are too damn low, the landlord gets paid before anybody else. There are plenty of hungry children in homes where the rent is paid on time.

At the end of the day, landlords want good renters who will pay their rent, take care of the home, not bother the neighbors and leave on good terms. And in theory, their screening criteria are meant to help select those ideal renters, and weed out the renters who will cost the landlord money and high blood pressure. And even when they’ve found the ideal tenant, landlords hedge their bets by charging a security deposit that could cover unpaid rent and damage to the home.

Stealing Security Deposits

In theory a security deposit can only cover “damage” if it exceeds normal ‘wear & tear’. In practice, landlords often assume that any wear & tear that shows evidence of a person ever living in the unit is “above normal wear & tear”. I’ve seen tenants leave every surface of their units clean enough to eat off of and still get charged over $100 for a “sterilization cleaning”. State law is so ambiguous about security deposits that it’s very common for tenants to lose their entire deposit (often over $1000), and even get a bill from the landlord for charges above the deposit amount. To add insult to injury, landlords don’t actually have to do any of the repairs that they are billing the tenants for! One personal example: my landlord charged me and the next tenants $1800 to refinish the 20 year old wood floors. She finally got them refinished right before she sold the house — I know because the “beautiful and newly restored hardwood floors” were featured prominently in the listing.

The stories around withholding security deposits are endless and devastating. It’s the biggest racket in town. It should actually be treated as a crime, because in many cases it is outright theft. Honestly, if anyone should have their credit checked it’s the landlord, because our security deposit is a long term, unsecured 0% interest loan!

Regardless of whether or not a tenant gets their security deposit back when they move out, there are no limits (besides the sky!) on what a landlord can charge, and often landlords ask for 2 or 3 times the rent, or more, for tenants who they deem “high risk”. And the deposit it due, in full, at move-in. Coming up with several thousand dollars in addition to rent prevents many from being able to access housing.

And that’s really what the F.A.I.R. ordinance is about: Increasing access to housing by lowering common, unreasonable and unnecessary barriers to access. Indeed, the basic framework has been developed over the course of more than two years, largely by a stakeholder group that met regularly and early with a deep equity lens and the following mission statement:

Create clear channels to access housing of choice for all renters regardless of background that is consistent, fair, and equitable and maintains dignity and humanity for the renter.

This mission is important for a pretty simple reason: If people have trouble getting into housing — either because they can’t get approved or can’t afford to move in — the risk of homelessness skyrockets. Whether they are sleeping on the street in tents, or in cars, motels or friends’ couches, they lack a stable and dignified place to call home. Even the heartless will agree that people having homes is better in every way for them, for our communities and city, and for society at large.

The problem is that even for renters who aren’t commonly discriminated against, the landlord-tenant relationship and our day to day life presents a virtual minefield of barriers that could make it harder to get housing in the next move. And every step of the process of trying to find a new unit can introduce new barriers. I regularly talk to renters who are so afraid of doing anything that might cause their landlord to give a bad reference in the future that they will avoid any interaction.

An unexpected financial crisis can cause one to get behind on bills, lowering their credit, or possibly lead to bankruptcy, which would result in future automatic denial from most rentals for several years. Even if a financial crisis doesn’t leave you in bankruptcy or your credit in ruins, a job loss or significant loss in income because of a divorce or separation means that it’s going to be a lot harder, or impossible, to get a new place because you don’t make 3x the rent. I’m reminded of my own no-cause eviction in 1998, which occurred shortly after my then 6mo daughter’s father left me. When we moved in we had two incomes, when I moved out I only had one. I had to find housing two cities away in order to qualify on my own.

So what does the F.A.I.R. ordinance do? And what problems exactly is it trying to solve?

Here are the major components of the ordinance, but this is not an exhaustive list of all the protections offered in the new ordinance.

Problem: In a tight housing market, good rentals get snatched up right away. It might seem fair that the early bird gets the worm, but there are a lot of people who need specific features in a rental (accessibility, more bedrooms, location, price, etc.) who have multiple jobs, no vehicle, and other barriers preventing them from being the first person to pounce.

F.A.I.R. Solution: Requires landlords to advertise their units 72 hours before taking any applications, and then offer approved applicants the unit on a first come first serve basis.

If the unit is accessible for people with mobility disabilities (“Type A accessible”), the landlord must say this in the advertisement, and if a person with such a disability submits their application within the first 8 hours of the application period, they are moved to the front of the line.

Problem: The rent is too high, wages are too low. More than half our city is paying more than a ⅓ of their income in rent, yet landlords still require people to make 3x the rent to qualify. They claim this is necessary because they want to make sure that you can pay all your bills, but they don’t seem to care about our bills when they charge $150 late fees, or raise the rent by hundreds of dollars after we move in. At the end of the day, we’re adults, we know our budget better than them, and we all know that when money is tight the rent gets paid first no matter what. Landlords don’t actually care about our budget, they just don’t want to rent to poor people.

For example, if a 2-bedroom unit rents for more than $1584, then a landlord can’t require the applicants to make more than twice rent. If the rent is less than that, then they can require 2.5 times the rent. This might seem regressive, but the thinking is that if landlords really want higher income ratios, they can charge lower rents. The lower the rent, the easier it will be to show that you make enough to pay for it.

Also, landlords must consider the total income of all applicants when calculating the income to rent ratio, instead of asking that each applicant make enough to qualify.

Landlords have been doing a lot of fear-mongering to the press and with misleading robocalls and mailers to renters about the F.A.I.R. policy forcing them to rent to dangerous criminals (more on that below), but behind closed doors they are most furious about renting to people making less than 3x the rent. This is the most vulnerable part of the policy.

For tenants whose income still doesn’t qualify, the landlord can require a co-signer or additional deposit of ½ month’s rent, payable in installments over 3 months. They can’t require the co-signer to make more than 3x the rent.

Problem: People who would be perfectly good renters but have a blemished past (credit, background, rental history, etc.) cannot get approved for housing.

F.A.I.R. Solution: Landlords will have two options. They can screen tenants using a set of “low-barrier criteria” (LBC), or they can use their own criteria but before denying someone they must do an “individual assessment” (IA) using Supplemental Evidence (SE) provided by the tenant. The supplemental evidence is essentially the tenant’s chance to show that they will be a good renter even if their credit, background check and rental history raises red flags. Tenants can provide any supplemental evidence with their application, and landlords must consider it before issuing a denial.

If they deny the tenant anyway, they must be explicit about the reasoning, and say why the supplemental evidence did not alleviate their concerns. And they must provide an appeals process.

The low-barrier criteria: If a landlord instead chooses to use the LBC, they don’t need to do an individual assessment before denying a tenant. However, the criteria is much more forgiving than standard practice. For example, the landlord cannot reject a tenant for any of the following reasons:

  • Insufficient credit or rental history (this is good for young renters getting their first place!)
  • Credit score, if it’s over 500
  • Property debt, if it’s less than $500
  • Bad debt, if it’s medical or student loan debt, or if it’s less than $1000
  • A discharged bankruptcy (discharged means that the debt has been discharged and the bankruptcy is closed).
  • A criminal conviction that is no longer a crime in the state of Oregon
  • A misdemeanor conviction date of sentencing is more than 3 years old
  • A felony charge if date of sentencing is more than 7 years old
  • Criminal charges that didn’t result in a conviction, unless they are still pending
  • An eviction more than 3 years old (state law is 5 years)
  • An eviction less than 3 years old if it was the result of a no-cause eviction, or failure to appear
  • Bad rental reference except for verifiable and credible evidence of late rent payments, for-cause termination, monies owed to the landlord, more than 3 material violations in one year

This list isn’t complete but covers most of the big reasons that people routinely get denied. And the criteria isn’t perfect, there will be some perfectly good renters who will be denied under this criteria.

Problem: Security deposits are too high! Even if we get approved we can’t afford to move in!

F.A.I.R. Solution: If landlords require last month’s rent in addition to a security deposit, they can only charge ½ a month security deposit, otherwise they are allowed to charge a full month rent for the deposit.

All security deposits must be placed in an account separate from the landlord’s other funds (so they don’t spend it on other things then find ways to avoid returning it). If the account bears interest then that is payable to the tenant at the end of the tenancy.

Problem: Security deposits never get returned because landlords claim everything is damage above normal wear & tear, charge full replacement value for items despite their age, and rack up the bill in other ways. Tenants struggle to fight these charges because of lack of good documentation.

F.A.I.R. Solution: The ordinance requires the landlord to give the tenant a move-in checklist to fill out, and provide a move-out inspection that tenants are allowed to attend. Anything they replace must use a depreciation schedule, and information about replacement cost must be described in the rental agreement, to account for the age; and all other charges must be well documented.

A few really helpful perks: Landlords would be specifically prevented from charging for painting unless the tenant painted without permission, or painting is required because of damages to the wall. And when there is damage to flooring (carpet, linoleum, tile, hardwood, etc.), they can only charge for the repair or replacement of the area that is damaged, not the entire house “in order to match”.

Ultimately this part of the ordinance will require much more accountability on the part of the landlord and should make it more onerous for them to unfairly gouge tenants after they move out.

Problem: Tenant protections are great, but not if tenants don’t know their rights and landlords are on the honor system!

F.A.I.R. Solution: Landlords who violate the screening criteria ordinance can be sued for $250 per infraction, and violations of the security deposit ordinance carries a penalty of twice the deposit. Enforcement is still a problem, and this ordinance won’t change that. Tenants will still have to go to small claims court to hold violators accountable. However, the ordinance requires that tenants be provided with a complete set of their relevant rights during the application process, when/if they are denied, with the move-in inspection sheet, and when they receive their security deposit accounting.

Is F.A.I.R. fair?

Many well-intentioned and politically progressive people might be reading this and thinking, “Of course I’m against discrimination, but I can understand why a landlord wouldn’t want to rent to someone with an eviction, criminal background, bad credit, or bad rental history! I mean, they need to stay in business, right? And I’m not sure I want to live next door to someone who has a criminal background!”

The thing is, these concerns aren’t backed up by data. Renters with bad credit are still by and large good renters who pay their rent on time. And extensive research shows that criminal recidivism is much less likely when a person has stable housing and has gone a certain period of time without reoffending. Even sex offenders aren’t nearly as dangerous as we have been trained to believe.

More importantly, we know that people of color in Portland are arrested, charged and convicted in far greater numbers than white people. This isn’t because they commit more crimes, white people just don’t get caught and when they do they are much more likely to avoid charges or be convicted. This last point is a very important fact: The criminal justice system doesn’t catch all the bad guys. We are already living next door to people with criminal backgrounds, they just might not have a criminal record. Or they are living under the radar as “unauthorized roommates” with their friends and family (putting them at risk of eviction if they get caught). Also, criminal background checks aren’t required to get a mortgage. If you live next door to homeowners, who knows what skeletons they have hiding in their closets!

But regardless of whether or not someone’s criminal background merits concern, it’s an indisputable fact that everyone needs a place to live. If they can’t be your neighbor, then where are they supposed to live? Are any of us safer if people with rough past who have served their time are forced to live in precarity for the rest of their lives? As a society we claim to value rehabilitation and reform, but how is this possible if someone isn’t given a chance to get themselves stable and move forward with their lives?

What’s particularly funny about the landlord lobby pulling out all the stops to try to kill this policy by fear-mongering around the requirement that they let do individual assessments before denying someone with a criminal background, is that they are already required to do this by FEDERAL LAW. HUD recently confirmed that rejecting applicants because of criminal background disparately impacts people of color, a protected class. Thus, landlords are now required to take a closer look before the denial.

We KNOW that landlords in Portland are discriminating, three Fair Housing audits over the last year have confirmed this. After the first blistering audit a committee was convened to study the problem and among their recommendations was to address the latent discrimination that can happen in the screening process by lowering barriers.

Links to all of these articles and more can be found here: http://topics.oregonlive.com/tag/portland%20housing%20audit/index.html?fbclid=IwAR3oEUEdBFAhoTuFElkmoHLLTKQwkaBSkL7xnDH2KIZ4lJvR6WgCHejBmKg
This 2011 story from the Skanner includes some of the draft recommendations of the Fair Housing Committee, convened by Nick Fish. https://www.theskanner.com/news/northwest/10300-portland-racism-and-rental-housing-report-black-latino-families-charged-more-turned-away-2011-04-28

We also KNOW that the factors that landlords use to screen a tenant will disproportionately result in people of color being denied housing. This is no accident, it is another way to drive people of color out of our city and into poverty.

Dr. Matthew Desmond, a Harvard sociologist and author of the award winning book Evicted, found conclusive data that evictions impact Black women more than any other group. While the ordinance won’t do anything to prevent or change the eviction process, it can at least help make sure that the women who are impacted can find another home for their family.

More information about how screening criteria impacts people of color right here and here.

If that’s not enough to convince you that this is a matter of racial justice: A pilot study of the new ordinance found that 50% of people of color who would have had their applications denied would now be approved.

We are in the midst of an unabating housing crisis. The rent is too high, and forced displacement ruins lives; and recent legislation is starting to address these issues (too little, too late, but I digress). However, what the landlords say in their testimony against this type of legislation is that they’ll respond by being more selective, and not giving “high-risk” tenants a chance, because they won’t be able to easily get rid of bad tenants. Whether these landlords were ever actually giving anyone a chance is irrelevant, the fact is they have an enormous amount of discretion to decide who gets to live in this city and who doesn’t. We need to change that. It’s only fair. ;)