The Department of Housing and Urban Development (HUD) has released two guidance documents addressing the application of the Fair Housing Act on the use of artificial intelligence (AI) for two particular concerns—the tenant screening process and the advertising of housing opportunities through online platforms that use targeted ads.

The best practices are in accordance with President Joe Biden’s executive order that called on HUD to provide guidance to combat discrimination enabled by automated or algorithmic tools used to make decisions about access to housing and in other real estate-related transactions.

“Under this administration, HUD is committed to fully enforcing the Fair Housing Act and rooting out all forms of discrimination in housing,” says HUD acting secretary Adrianne Todman. “We have released new guidance to ensure that our partners in the private sector who utilize AI and algorithms are aware of how the Fair Housing Act applies to these practices.”

The tenant screening guidance describes fair housing issues created by tenant screening practices, including the increasing use of third-party screening companies to aid with tenant screening decisions and the emerging use of machine learning and AI. For both housing providers and companies that offer tenant screening services, the guidance suggests best practices for fair, transparent, and non-discriminatory tenant screening policies.

“This guidance is a crucial step forward in dismantling barriers to access in rental housing that disproportionately affect disenfranchised communities. For too long, opaque and unjust tenant screening processes implemented by landlords and fueled by tenant screening companies have stood as major obstacles to housing equity,” says Rasheedah Phillips, director of housing at PolicyLink. “By setting forth clear expectations and best practices for non-discriminatory tenant screening practices, HUD’s guidance not only upholds the tenets of the Fair Housing Act but also champions the rights of all Americans seeking housing.”

The guidance makes clear that housing providers and tenant screening companies should:

  • Only screen applications for information relevant to predicting whether someone will be a good tenant.
  • Records without a negative outcome are not relevant (such as an eviction record if the tenant prevailed or with insufficient information to determine the outcome).
  • Consider other sources of income or financial resources, such as Housing Choice Vouchers, when assessing an applicant’s ability to afford rent.
  • Enable applicants to dispute whether negative information should be considered if inaccurate, or even if the record is accurate, such as when an eviction is related to domestic violence.
  • Use only accurate records.
  • Make written tenant screening policies publicly and readily available and actually follow them.
  • Provide detailed reasons for the denial of an applicant and copies of any screening reports relied upon.
  • Design and test complex models for fair housing compliance.

Demetria McCain, principal deputy assistant secretary, Fair Housing and Equal Opportunity, says, “The Fair Housing Act prohibits discrimination on the basis of race, color, national origin, religion, sex (including gender and sexual orientation), disability, and familial status. Housing providers, tenant screening companies, advertisers, and online platforms should be aware that the Fair Housing Act applies to tenant screening and the advertising of housing, including when AI and algorithms are used to perform these functions.”

The tenant screening guidance makes clear that use of third-party screening companies, including those that use AI or other advanced technologies, must comply with the Fair Housing Act, and ensure that all housing applicants are given an equal opportunity to be evaluated on their own merit.