A Pitch to Bring Equity to Rental Screening Process Heads to City Hall

It’s been two years since Barrett Ross stopped looking for rental housing in Portland. After a search that lost him hundreds in non-refundable rental application fees, Ross was ultimately rejected from an apartment complex that discovered his teenage marijuana possession charge.

When he tried to challenge the decision, the property management company said Ross’ income was too low to qualify for an apartment anyway.

“It was so discouraging and depressing. I just gave up,” Ross recalled. “I had no incentive to keep searching. I’ve been technically homeless for two years now.”

Between couch surfing and living in a motorhome parked in a friend’s driveway, he’s made it work.

But Ross considers himself lucky. For many Portlanders, being rejected by a rental company for having a criminal record, a spotty rental history, or simply being too poor may be the sole factor determining whether or not they’ll be sleeping outside or returning to an abusive home.

This week, Portland City Council will consider expert testimony and public comment on a sweeping plan to standardize the rental application process across the city—and, in doing so, remove discriminatory barriers that have left renters like Ross without a reliable place to call home. Commissioners are expected to vote on the ordinances next week.

“We are in a housing crisis in this city, but we’re still allowing landlords to exclude the most vulnerable renters.”

If successful, the proposed city code changes could give hundreds of low-income renters—especially renters of color—a fair shot at finding affordable housing in Portland.

While landlord organizations argue that the overly complicated code changes will waste time and put other tenants at risk, tenant advocates say the updates will bring needed equity to a historically discriminatory housing market.

“We are in a housing crisis in this city, but we’re still allowing landlords to exclude the most vulnerable renters,” says Jamey Duhamel, policy director for Commissioner Chloe Eudaly. Duhamel has led the years-long effort to create more equitable application system for Portland renters, who make up 47 percent of the city’s population.

The proposed changes, informed by months of conversations with landlords and tenants, are separated into two ordinances that will be simultaneously considered by commissioners

One creates standards for how much a landlord can charge a new tenant for a security deposit (no more than one month’s rent) and the circumstances that determine if a landlord can refuse to completely refund that deposit at the end of tenancy.

The second ordinance creates strict guidelines around what tenant information a landlord can consider when reviewing an application from a prospective renter. Landlords currently follow their own screening criteria that usually restricts those with criminal records, poor credit, spotty rental histories, or any other factors they deem “risky” from renting their property. This practice is allowed under Oregon law.

The city’s proposal hopes to eliminate the potential discrimination that accompanies those standards by giving landlords a choice: Either follow the city’s newly minted “low-barrier” screening criteria—which, instead of automatically rejecting applicants based on traditionally “risky” factors, also considers what steps they’ve taken to improve—or continue to use more restrictive screening criteria, but be prepared to explain, in detail, why they’ve rejected a prospective tenant’s application and how it wasn’t a discriminatory choice.

Creating rules where there weren’t any before isn’t an easy sell.

For landlords and property owners who have only had to comply with state and federal housing laws—and flexible industry standards—for decades, these proposed rules have been cooly received.

Commissioner Chloe Eudaly speaking at a 2017 rally for tenant protections. Dirk Vanderhart

“This is going to make the application process that much longer for renters,” says Nicholas Cook, owner of Sleep Sound Property Management.

Cook also chairs the Government Relations Committee for Multifamily NW, a landlord advocacy group that’s raised the loudest opposition to the screening criteria ordinance.

While Multifamily NW and other for-profit landlord groups have been involved in the ordinance’s planning process, Cook says their input has been largely ignored by Commissioner Eudaly’s staff.

“I think the city is tackling issues worthy of a discussion,” says Cook. “But what we’re seeing is a lot of political ideology being crammed down the throat of the [housing] industry just because they can.”

One of Cook’s concerns with the proposed changes: The city criteria approves tenants whose monthly income is just two times the amount of monthly rent. Most private property managers ask prospective tenants to prove their income is three times the monthly rent.

This new rent to income ratio “sets a person up for failure,” says Cook, who fears the lowered standard will lead to more evictions.

Duhamel says it’s not the landlord’s job to speculate.

“Landlords don’t have to be paternalistic about their tenants,” she says. “And it’s not like landlords ever care about someone’s income ratio when a tenant is already in a house or when they chose to raise rent.”

Cook’s biggest problem, however, is how the new criteria will make it much harder for landlords to deny tenancy to people with a criminal history

“Renting to people with a criminal past threatens the safety of other tenants and of the neighborhoods where we rent,” says Cook. “I’m concerned that they city is willing to put a lot of other people at risk for a marginal improvement.”

The city, for its part, hasn’t taken this concern lightly.

The proposed screening criteria only approves renters who have been convicted of a felony if it’s been at least seven years since they were sentenced. This number is rooted in national recidivism data showing that, after seven years, the likelihood of a former felon committing a crime is nearly equal to someone who’s never been charged with a felony.

In addition, a 2019 study by Wilder Research found that criminal offenses that happened more than five years prior to a tenant’s move-in date had “no significant effect” on that person’s ability to be a decent renter.

“It’s unfair to burden landlords with the mistakes of other people.”

Cook didn’t offer any research or anecdotal evidence to illustrate how people with a criminal history make bad tenants. He’s more concerned with the hypothetical threat.

“It’s all fine until we have a dramatic situation and someone is harmed,” Cook says.

Cook prefers if people with a criminal past live in separate rental complexes overseen by landlords who are given state or federal incentives to handle the risk that comes with renting to former felons.

“If you’re a private property owner and you rent, you’re taking on the liability of residents,” he says. “It’s unfair to burden landlords with the mistakes of other people.”

Margot Black, an organizer with Portland Tenants United (PTU), says there’s something familiar about Cook’s argument.

“That’s exactly what landlords said about the Fair Housing Act,” she says.

Since 1968, landlords have been required to adhere to the Fair Housing Act (FHA), which prohibits landlords from refusing to rent to tenants based on their race, national origin, religion, sex, family size, or disability. But despite FHA’s guidelines, Black says landlords have found less overt ways to discriminate against prospective tenants.

“When landlords say they don’t want to rent to certain people,” Black says, “they are acknowledging that the Fair Housing Act is not enforced and that is their right to find ways to get around it.”

For example: A landlord is currently allowed to sift through all rental applications and simply select their personal favorite, a decision that can be informed (even if unintentionally) by a landlord’s biases.

“It could be the decision between a white couple without kids and a single Black mother with three,” says Margot Black. “We see that kind of discrimination all the time.”

Studies conducted both at the local and national levels reflect Black’s anecdotal evidence. A 2018 study by the Oregon Fair Housing Council found that Portland landlords treat one in four prospective renters differently based on that person’s race or national origin.

And a national 2018 study by the Urban Institute found that the vast majority of the time, landlords refuse to rent to tenants who plan to use a housing choice voucher, a government subsidy program, previously known as Section 8, that is available to to low-income Americans.

Black and other tenant advocates say the screening ordinance will close the loopholes landlords use to discriminate. For starters, the ordinance requires landlords consider rental applicants on a first-come-first-serve basis.

“Instead of just saying they’re not biased,” Black says, “landlords will have to prove it.”

PTU spokesperson Margot Black speaking at a 2018 press conference on renter rights. Alex Zielinski

Non-profit housing providers—which help low-income people own and lease homes—are less resistant to the screening changes.

“In many ways, the ordinance aligns with our own screening practices,” says Dan Valliere, director of Reach CDC. Valliere joined eight other affordable housing nonprofits in signing a March 29 letter letter to city commissioners offering their cautious support of the two ordinances.

Yet Valliere still sees a number of details baked into the ordinances that could trip up those wanting to comply with the new rules.

“The city will be changing operational details at a very fine level,” he says. “It could impact every single interaction we have with a client. It’s really hard to estimate how that will financially impact our work, but I’m guessing it will.”

Before the policies reach a council vote, Valliere wants to see more financial and operational support from the Portland Housing Bureau.

“Portland has the opportunity to be the pioneers in this area,” Valliere says. “We could build a framework other cities could follow… that is, if we take the time to get it right.”

City council has blocked off Wednesday afternoon for a detailed presentation on the proposed ordinances and Thursday afternoon for public testimony.

Duhamel said she learned from the last time Eudaly’s office introduced a contentious pro-tenant policy—2017’s renter relocation ordinance—to give both commissioners and the public enough time to raise concerns and digest the complicated policies.

“We want to make sure commissioners fully understand what we’re proposing. We know that industry opponents can give them cold feet,” says Duhamel. “I can only hope commissioners listen to and trust the community that asked for these changes. It’s a moment to be courageous.”