Tenant Screening Reports & Impact on Renters

·16 min read

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A few days before Thanksgiving 2019, Joyce Williams lost her job as a security guard in Chicago, and in the few months it took her to find work again, she fell behind on rent.

Her apartment, located in a low-slung brick building across from a boarded-up church on the city’s South Side, was in poor condition. The thermostat was broken, and the back door had such big gaps around it that Williams would sometimes light the stove to try and stay warm. Mice skittered across the floor, and someone had painted over obvious water damage in the hallways. But she couldn’t afford to lose the unit.

She tried to apply to a nonprofit program that would help cover the missing payments and allow her to stay in the apartment, but she says her landlord wouldn’t complete the necessary paperwork. Instead, he moved to evict her.

In the end, Williams, who is now 63 and lives alone, wasn’t kicked out. With the help of a local legal aid organization, she reached a deal with her landlord: Williams would leave, and he would withdraw the eviction filing. The landlord’s case was shaky, according to Williams’ lawyer. He hadn’t given Williams proper notice before starting the proceeding, and he wasn’t maintaining the apartment properly.

But leaving, it turned out, wasn’t easy. When Williams applied for an apartment last July, she was rejected. It happened twice more in August. The reason? Automated tenant screening reports used by her prospective landlords showed the still-unresolved eviction case. Two of these reports also turned up a previous eviction, from 2016.

These tenant screening reports hold enormous sway over a renter’s fate. They check years’ worth of an applicant’s eviction, criminal, and credit histories, and summarize it all in neat, easy-to-digest formats. They often include a computer-generated recommendation: thumbs-up or thumbs-down.

In a report like that, it might not matter if an eviction proceeding was handled correctly, or even if the tenant won the case. Just the fact that it was filed could be enough to tank an application.

Finally, this January, Williams moved into a new apartment. The landlord was willing to talk over her circumstances, and Williams submitted a letter from her attorney that helped. Once she moved, her old landlord had the eviction case dismissed, and the judge sealed it from public view—though it could pop up on future tenant reports if they include outdated information, her lawyer says.

Williams says she understands why property owners might be spooked by a renter who has had evictions filed against them. But, she says, the tenant screening reports didn’t tell the whole story. After all, the eviction didn’t go through, and now she’s back on her feet. “It seems that people weren’t really looking at the full picture of what I was going through,” Williams says. “I’m working full time, I’ve been working steadily—and still I got turned down. It was very frustrating.”

The Coming Housing Crisis

When landlords sign up to receive tenant screening reports, they’re buying fast access to a simplified summary of a renter’s history. Nine in 10 landlords use some form of these reports, according to a 2017 survey from TransUnion, which offers a popular screening product.

“The theme for the landlord is, ‘How do I lower my risk?’” says Alexandra Alvarado, head of marketing and education at the American Apartment Owners Association, which represents more than 120,000 landlords. “They need to show they took the precautions necessary to make sure their building is safe,” which can help protect them from liability if a tenant harms other renters or damages property. And, she says, landlords want to avoid applicants with a history of sparking expensive eviction proceedings.

Dozens of companies supply the reports, which can cost between $20 and $40, typically paid by the applicant. The problem, housing advocates say, is that the reports can unfairly penalize lots of people who would make good renters, right alongside the riskier applicants.

For one thing, the documents are often littered with errors. As the tech-focused news site The Markup and others have reported, they can include criminal or eviction records from people with similar names, a problem that can arise more often with Black or Latino applicants.

But even when tenant screening reports are free of mistakes, they leave two groups of people out in the cold: people like Williams, who have been the subject of an eviction proceeding, and people with certain criminal records—even those who were never convicted, or who completed sentences or paid fines years earlier.

“Most people have no idea how far-reaching the tentacles of tenant screening can be,” says John Soumilas, a Philadelphia lawyer who represents renters in class-action lawsuits. Soumilas has heard from tenants who were denied because of a minor infraction a decade ago—an open-container violation, say. “They’re surprised that this type of information is still around,” he says.

Under federal law, tenant screening companies can report seven years of arrest records in most cases, and there’s no time limit on convictions. They can report evictions for seven years, or longer in certain circumstances. Some cities and states have enacted or are considering rules to shorten those time limits.

Approximately 1 in 4 American adults has a criminal record—anything from a misdemeanor arrest to a felony conviction—according to an estimate from the National Employment Law Project. (The numbers are far higher for Black Americans.) And Princeton’s Eviction Lab estimates that 1 in 17 renter households faced an eviction filing between 2000 and 2016.

This means that for millions of people, it can be difficult to rent a good, clean, and safe apartment. Millions more could join them soon. A federal eviction moratorium is set to end March 31, which may lead to a tidal wave of new eviction proceedings—and years of hardship as those records make their way into future tenant screening reports.

People of color may be sharply overrepresented in the coming housing crisis. Fifteen percent of Black adults and 15 percent of Hispanic adults said they have fallen behind on their rent or mortgage payments (PDF) because of the COVID-19 pandemic, according to a nationally representative survey of 2,982 adults conducted by Consumer Reports in December 2020, compared with 7 percent of white adults and 6 percent of English-speaking Asian adults.

“Things are about to come crashing down for a lot of people,” says Ariel Nelson, a staff attorney at the National Consumer Law Center.

Algorithms as Gatekeepers

Over the years, tenant screening companies have dug deeper into applicants’ backgrounds, but many of their reports are being stripped of important details.

In 2016, a Latino man named Mikhail Arroyo was denied a rental application to move into an apartment with his mother in Windham, Conn., after a tenant screening report picked up a low-level shoplifting citation from two years before.

Arroyo’s mother sued CoreLogic Rental Property Solutions—the company that provided the report—arguing that it violated the Fair Housing Act, the landmark 1968 law that protects renters from practices that have a disparate negative impact on racial minorities, disabled people, and other protected groups.

Arroyo’s lawyers argued that the screening report didn’t provide all the information CoreLogic had uncovered. It showed a “criminal court action” against Arroyo that it said was “disqualifying”—but it didn’t say that the accusation was for a nonviolent theft or explain that the charges were eventually dropped.

The report’s determination may not have held up to a close review of Arroyo’s situation, the family’s attorneys say. After the shoplifting charge, Arroyo was injured in an accident that left him unable to walk or speak—and therefore extremely unlikely to pose a danger to other tenants. The case is ongoing.

A similar lack of detail can hurt applicants with eviction proceedings in their history. In many states, renters can legally set aside rent payments if a landlord is not making critical repairs, such as patching a leaky roof or fixing a broken heater in wintertime. If a tenant decides to exercise that right, however, a landlord might respond by suing for nonpayment.

Even if the renter wins their case, the stain of the landlord’s filing may well prevent them from renting elsewhere.

“A tenant has to make that choice,” says Rasheedah Phillips, managing attorney for housing policy at Community Legal Services of Philadelphia. “Do I make these repairs that affect my family’s health and risk getting that eviction record? We see this every day: folks coming in and making decisions that are really life-threatening in some cases.”

The Department of Housing and Urban Development, which administers the Fair Housing Act, says that applications should get a detailed, hands-on review to take all the circumstances into account, but the tenant screening process has been moving in the opposite direction.

Consumer Reports looked at sample reports and marketing materials from eight prominent tenant screening companies. We found that they all offered reports that included an algorithmically generated score or a recommendation to accept or reject an applicant.

On-Site, a subsidiary of a leading tenant screening company called RealPage, which was recently valued at $10 billion, is typical of what we found. The company’s reports feature a one-to-ten score and a big green thumbs-up or a red thumbs-down. In addition, RealPage allows large landlords to choose not to show detailed underlying records in the reports that leasing agents see, says Michael Mauseth, a RealPage senior vice president.

A screening company’s scores and recommendations depend on criteria set by the landlord, who can decide to flag everyone with a history of violent or drug-related offenses—or any arrest record at all—along with people who have been subject to eviction proceedings. Prospective tenants usually can’t find out what the criteria are before they apply.

If a landlord rejects an application because of a screening report, the applicant is entitled to get a free copy of their records from the screening company and to have any errors corrected. But they generally don’t get to see algorithmic recommendations and still might not know why they were rejected. According to a number of tenants and housing advocates, landlords often don’t tell an applicant that it was a screening report that led to the apartment going to someone else.

CoreLogic, which sold off its tenant screening business in February 2021, declined to speak with Consumer Reports about the Arroyo case or its tenant screening business. Other than RealPage, none of the tenant screening companies Consumer Reports contacted was willing to answer questions.

However, Eric Ellman, senior vice president for public policy and legal affairs at the Consumer Data Industry Association—which represents consumer reporting agencies, including tenant screening companies—emphasized that screening firms only supply their clients with information. “Tenant screening companies don’t make decisions,” Ellman says. “Landlords make decisions.”

Consumer advocates say that’s not how the reports are used in the real world. “The way the information is presented, it’s basically making the decision for you,” says Eric Dunn, director of litigation at the National Housing Law Project. “There’s a way these products could be used as a part of the decision-making process, but the problem is they’re being used as the entire decision-making process.”

Black Americans Face Outsize Impact

Housing advocates say that modern tenant screening systems make it particularly difficult for people of color to find apartments.

One reason, they say, is that these populations are vastly overrepresented in criminal statistics, in part because of biased policing. “You cannot untangle the racism of the criminal legal system from the records that come from that system,” says Alison Wilkey, director of public policy at the John Jay College Institute for Justice and Opportunity in New York City. “As a result, what a background check really tells you is the race of a person and whether they grew up in a neighborhood where there was heavy investment in law enforcement.”

Black people across the U.S. are 3.6 times more likely to be arrested than white people for possessing marijuana, according to the American Civil Liberties Union, even though the two groups use the drug at about the same rate. Overall, Black men are incarcerated at almost six times the rate of white men, according to the Bureau of Justice Statistics.

Black Americans face a disproportionate number of evictions, too. In a 2020 study covering more than one-third of American rental households, researchers from Rutgers and Princeton found that Black people accounted for 20 percent of renters but were involved in 33 percent of eviction proceedings. A study by researchers at UC Berkeley and the University of Washington found that Black renters were evicted at 5.5 times the rate of white renters between 2013 and 2017 in King County, which is home to Seattle and its suburbs.

One benefit of the reports, according to tenant screening marketing materials, is that they can help protect landlords from claims of racial bias in renting. On-Site, for example, urges property managers to “mitigate Fair Housing risk by automating the decision process.”

But the actual effect may be to increase discrimination, according to attorneys and researchers who work on housing issues.

“These renter scores and algorithmically based decisions are really baking in disparities,” says Tex Pasley, a civil rights attorney in Chicago who has studied tenant screening. “Without any kind of intervention, you can expect to see people who have evictions or criminal records—who are disproportionately likely to be nonwhite—end up being denied more often from housing.”

'Fair Chance' Reforms on the Rise

A handful of cities and states are passing or considering “fair chance” reforms to limit what information the reports can contain.

The primary goal is to help people with criminal records find a decent place to rent for themselves and their families. Some fair chance laws also tighten the rules on reporting eviction filings.

Hilton N. Webb Jr. is advocating for a fair chance law that has been proposed for New York City, where he has been unable to find stable housing. Webb says he has the money for an apartment and isn’t picky when it comes to neighborhoods or amenities. But he has often forked over 30 or 40 bucks for landlords to run a tenant screening report, only to have the unit go to someone else.

The problem, Webb says, is his criminal record: He spent almost 28 years in prison for an assault he admits to and a murder he says he didn’t do. But Webb, who is 65 years old and is pursuing a master’s degree in social work, says he deserves a chance to move on from those 1980s convictions.

“Here’s the deal: You do the crime; you do the time,” he says. “And once you do your time, you’re restored back to society. I can vote now, I pay taxes—but I can’t find a place to live. When does it stop? When is it over?”

You don’t need to be convicted of a violent crime to face the same problem. Sue Mason is the executive director of What’s Next Washington, an organization in Seattle that advocates for people with prior convictions. In 2003, she was released from federal prison, where she had been incarcerated for a nonviolent felony. “In the beginning, I tried applying everywhere” for housing, she says. “I quickly stopped.”

Mason frequently spent months at a time searching for a landlord who would rent to her despite her record. “I always lived in substandard housing,” she says, and several times, she had to sleep on a friend’s couch while she looked.

Fair chance laws vary in the kinds of rules they impose on tenant screening reports. An ordinance enacted in 2020 in Illinois’ Cook County, which encompasses Chicago, blocks landlords from looking back more than three years for criminal convictions. They can run a criminal background check only after conditionally approving a tenant, and they’re required to disclose their screening criteria up front.

In recent years, Seattle, Oakland, and Berkeley, Calif. passed ordinances that bar landlords from asking about an applicant’s criminal history at all, and from searching for criminal records during the tenant screening process, with a few exceptions.

The proposed New York City ordinance would be similar, keeping most potential landlords from looking up any of an applicant’s criminal records. “Even if people have been involved with the criminal justice system, that doesn’t change the fact that housing is a human right,” says Salik Karim, advocacy coordinator at the John Jay College Institute for Justice and Opportunity. Karim, who served a prison term that ended more than 15 years ago, says the ordinance would give people like him “more options for renting apartments with more security and stability.”

The issue has caught the interest of Congress. In March, six Democratic senators sent a letter (PDF) to the Consumer Financial Protection Bureau that asked the agency how it oversees tenant screening companies, expressing concern that renters of color could be particularly likely to be harmed because of criminal or eviction records.

Some states are also trying to keep eviction filings that don’t end in evictions from preventing people from finding housing. Under a California law enacted in 2016, eviction filings are hidden from the public—including tenant screening companies—if they don’t lead to a judgment against the tenant within 60 days. Massachusetts and Illinois are both considering their own rules to automatically restrict access to eviction records.

Some in the tenant screening industry have opposed these changes. “Laws that limit a landlord’s ability to conduct a credit or criminal background check are ultimately going to put tenants and landlords at risk,” says Ellman, from the Consumer Data Industry Association.

But these reforms can make a life-changing difference for some tenants. After Seattle passed its fair chance housing ordinance in 2017, Mason did something she hadn’t done in years: She applied to live in a large apartment building in a desirable location.

Mason says she was nervous, worn out from endless rejections and long housing searches, tired of being “reconvicted” by landlords for a crime she felt she already atoned for with a prison sentence, several years of probation, and a $30,000 fine. But this time, things were different.

“I filled out the application,” Mason says. “And within 30 minutes, she said, ‘You’re approved!’ It was so great. It was so great. For once, it was easy.”