Landlords Sue Seattle Over Criminal Background Check Restrictions

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Three small landlords have banded together with two organizations to sue the City of Seattle over a criminal background checks ordinance that keeps landlords from considering certain criminal histories of tenants during the tenant screening process.

 

Sean Martin of the RHAWA, left, Ethan Blevins and William Shadbolt

By John Triplett

Rental Housing Journal

The Pacific Legal Foundation and the Rental Housing Association of Washington (RHAWA) have filed suit against the City of Seattle over the ordinance which bans landlords from most criminal background checks when screening an applicant. The suit argues the ordinance violates due process and free speech.

Seattle’s Fair Chance Housing Ordinance, passed by city council in 2017, forbids landlords from considering applicants’ criminal histories when selecting tenants. In other words, landlords cannot base a rental decision on concerns over their own safety or the safety of other tenants and neighbors. Violators face fines and penalties of up to $55,000.

The Rental Housing Association of Washington said in a release, “The ordinance is based on the flawed reasoning that inequities of our criminal justice system can be solved by limiting the rights of property owners from making informed decisions about the person(s) with whom they enter into rental agreements.

 

“Rental property owners recognize the struggle for applicants with criminal convictions history and the industry supports measures like Certificates of Restoration of Opportunities and simple “ban the box” legislation to ensure that an individual’s full list of qualifications are considered. However, the ostensibly blanket restrictions imposed by the City put rental property owners at too high of a risk of exposure to the safety of other tenants and their property,” RHAWA Interim Executive Director, Sean Martin, said in the release.

Landlords Sue Seattle Over Criminal Background Check Restrictions

Sean Martin, Interin Executive Director, RHAWA

“RHAWA supports second-chance housing and educates its members on HUD guidelines and state law which restrict how criminal records history may be considered, including an individualized assessment which consider factors such as the nature and severity of a criminal conviction,” Martin said in the release.

The RHAWA and the Pacific Legal Foundation held a joint press conference where they set out the reasons for the lawsuit and took questions from the media.

“Pacific Legal Foundation filed a complaint to King County Superior Court challenging Fair Chance Housing Ordinance on behalf of the Rental Housing Association of Washington and three small time landlords: Chong and MariLyn Yim, Kelly Lyles, and Scott Davis,” attorney Ethan W. Blevins with the Pacific Legal Foundation said at the press conference.

“The Fair Chance Housing Ordinance forbids landlords and organizations like RHA from asking about criminal background of housing applicants or denying someone tenancy on the basis of their criminal history. The law's intent is to help former convicts reintegrate. It's effect, however, is to deny landlords and screening organizations of their basic constitutional rights,” Blevins said.

Blevins also explained the due process and free speech aspects of the complaint.

“The due process claim argues that the Fair Chance Housing Ordinance pursues its objective in an unreasonable and unduly oppressive manner. The free speech argument says that the First Amendment embodies a right to receive information, and landlords rely upon that right when selecting their tenants. The city can and should help those emerging from criminal confinement, but it cannot do so at the cost of others' constitutional rights,” Blevins said.

Average RHAWA member landlord owns two rental properties

William Shadbolt, President of the RHAWA Board of Directors, said at the press conference, “I'm a small time landlord. The Rental Housing Association represents the interests of independent rental owners. We're the small mom-and-pop landlords.

“Our members live, work, and own rentals in the local community. Our average member has roughly two rental properties, and are very much part-time landlords. They teach our children, they design our planes, and they drive our buses. Many who were born and raised in this area purchase property in Seattle to help put their kids through school and provide for themselves in their old age.

“Our members provide the only organically affordable housing left in the city,” Shadbolt said.

Landlords sue city of seattle

William Shadbolt President of the RHAWA Board of Directors

City has dropped the ball on housing affordability

“Over the last few years, we're seen a barrage of legislative attacks on our industry by the City of Seattle,” Shadbolt said.

“Rather than crafting policies to combat real housing issues, such as affordability and homelessness, the City of Seattle Council is more inclined to pass legislation that forces small mom-and-pop landlords to struggle to deal with larger societal ills that they're just simply not able to cope with.

“If the city of Seattle is serious about reforming the criminal justice system, it should focus on reforming the criminal justice system. Continually adding regulations and cost to our local landlords does nothing to resolve the root causes of the injustices we all seek to remedy.

“Prior to the passage of this legislation, the Rental Housing Association reached out to the city of Seattle and suggested a variation on a local Certificate of Restoration of Opportunity. This was something that RHA supported on a state level, and it was passed on the state level. So a person with a criminal record could apply to an impartial panel and get a certificate. They could then take that certificate to a small landlord. Unfortunately RHA found no willing partners on this solution,” Shadbolt told the press conference.

“Our members are long time citizens of this city. Most of whom are concerned about reforms of the criminal justice system, and finding better opportunities to provide safe and affordable housing to everybody. We believe the best was to increase a housing opportunity is through partnership and the exchange of honest information, not through the concealment of public records,” he said.

Small landlords forced to sell their rental properties

“The impact of this and other short-sighted ordinances passed by the city council is that thousands of mom-and-pop landlords can no longer afford to operate their units,” Shadbolt said.

“They're being forced to sell their rental properties in the thousands. Fatigued by over regulation and demonization, they've thrown up their hands and voted with their feet.

“It's important to recognize that these tens of thousands of units have gobbled up by developers in large corporations, and turned into fancy condos and boxy town homes. The city council needs to understand they're causing a reduction in the number of housing units by these actions.

“These laws are destroying the affordability in our city. Making criminals a protected class, and other ordinances like it, that makes the city council directly responsible for increasing people's rent,” Shadbolt said.

Questions and answers at the press conference

Q: And what's our timeline? How long do these things take? What are our next steps? What can we expect going forward?

A: Blevins said, “Well, this is a fairly straight-forward legal issue, so we don't, hopefully, have to go through the long process of discovery that you might typically have to go through. It's going to depend somewhat on the city's willingness to move forward at pace, so it may depend on the particular Deputy City Attorney that we have, but if it moves at the pace, for example, that the First-in-Time litigation went, then I would anticipate we probably have a summary judgment hearing in about six months or so.”

Q: In the media all the time you hear constantly about the issues that special populations not being able to find housing. If this isn't the policy to help folks with criminal records get more housing, what are the solutions?

A: Shadbolt said, “You know, we have an affordability issue because there just simply is not enough housing. There is just not enough supply to meet the demand that we have in the city. So that's kind of the affordability issue side of it. But if the city is serious about people with criminal records, they need to look at the criminal justice system. Rather than going and putting the burdens on small landlords, they need to be asking questions, and on the federal level, of why this country imprisons more people per capita than any other developed nation. It's just wrong. But putting the burdens on small landlords to deal with that symptom, rather than dealing with the cause, is not the way to do it.

Q: The ordinance … makes no differentiation, in terms of criminal convictions, for, say, a pot conviction of a 21-year-old or a repeat assault conviction or domestic violence, somebody who's got multiple offenses, for example, who would have a serious impact on the way that you'd be able to operate your apartment building. There's no differentiation there?

A: Blevins said, “That's correct. There's no consideration of the gravity of the offense. The only, very limited, exception is if someone's on the sex offender registry, and they committed the related crime as an adult, then if you can prove to the CR office for civil rights you have a legitimate business reason for denying them tenancy, then you can deny them tenancy because of that criminal background.”

Q: But only for sexual offenders?

A: Blevins said, “That's correct. Only if they're on the sex offender registry, and only if they committed that crime as an adult, and only if you can prove to the Civil Rights Office you have a good reason. In that context gravity of the offense is one of the factors the civil rights office will consider, but it's in this very, very narrow context.”

Martin added, “I think one thing that people need to understand is that this is not the Wild West out there in the screening world, where landlords can just deny someone and have a blanket policy to say, criminal records I'm not going to even look at anything. We have the Federal HUD Guidelines that make it very prescriptive, and already you have to make the business case justification outside of Seattle, where this law is not in place, as well as state limitations on how far someone can look back. So really if someone's saying they were convicted of an offense 20 years ago, that's really not even in the discussion for being denied tenancy at this point. It's too old of a conviction. So there are a lot of restrictions and regulations in place already for how people are using criminal records.”

Q: How does this law affect the roommate situation?

A: Shadbolt said, “We actually had a member who had a senior citizen, she was in her 70s, her rent had gone up, mainly because of the property tax increases, and she asked her landlord if she could have a roommate. The landlord said, ‘Yep, that's fine.’ And the tenant turned around and said, ‘You do a background screening if I find somebody?’ And because of this law, she couldn't do a background screening on criminal records, so they turned around and said, ‘What happens if we do a formal sublet. Can you do a screening on that?’ And the answer to that was ‘No’ because the only exception is owner occupied. So if you have a roommate situation where it's a rental property, you cannot screen. So literally the people that you're sharing very close space with, you can't do it. The upshot of what happened with that person, she moved out of the city. She loved living in West Seattle. She could walk to her doctors, she had all the facilities here, but she ended up moving to Maple Valley to a small accessory dwelling unit because of this law.”

Q: Is the city considering any protections for landlords with regard to potential civil action from a tenant who is harmed by a former criminal who has a violent past?

A: Blevins said, “I certainly haven't heard of any. One of the great ironies behind this is the studies that the city relies upon, one of the things that is suggested by those studies, is that before this kind of burden can be placed on landlords, tort reform has to occur, because landlords can be criminally or civilly liable for crimes committed by tenants against other tenants. And so, a lot of these studies have said, ‘If we're going to do something about this, and force landlords to take individual criminal backgrounds, or not allow them to look at that, then we need to at least reform tort law, so that they're not going to be liable for crimes committed by those tenants.’ “

Martin added, “I would add to that ‘No’ there are no considerations for landlords coming from the city, and that's not something that's been discussed. And I wouldn't anticipate the city going that direction, at least not in the current setting that we're in.”

Q: What can we, as citizens and landlords, do to express our discomfort and concern with this law?

A: Shadbolt said, “Ultimately, a lot of our members have simply just sold their properties in the City of Seattle. So they just left the city. So that is a reduction of housing. And the impact of that is quite dramatic. The people that have single-family homes, they're invariably becoming owner-occupied as post rental properties. So they're gone. The small two, three, four-unit buildings are getting scraped and townhouses going up. You can go along California and Fauntleroy Way and see tons of them have been built. And even the small apartment buildings, what typically happened was that they were artificially low rents.

“There's a former board member that had two small apartment buildings in Queen Anne, and her rents were significantly below market. In reality, she was subsidizing her tenants’ rents for a period of time. And she and her family that had owned them for 40 or 50 years, just turned around and said, ‘We just can't continue.’ It's not just the regulations that have already been passed, which are onerous, it's what's going to be next? So she sold those properties, and prior to the sale she actually took three of her tenants to find new places. That was their relationship. What happened after the sale, is that the rents went up because the new owner suddenly had a very large mortgage payment to make. Whereas prior, they didn't. So those affordable units have just disappeared out of there.

“For the people that want to keep their rental units, I think they just need to contact their city council members. Put it in writing that they're upset with these issues. We're open to any discussion of solutions that work for both sides, but what it seems with the city council is ‘Let's put the burden on the mom-and-pop landlords and let them deal with it.’ And the reality is, we supported the Housing Levy strongly. We think that the whole of society should take responsibility for the issues that we have in the city, not just this one segment,” Shadbolt said.

Q: Did the city council come to RHA and try to get input and sort of work together on this Fair Chance Housing issue, or did they just act alone in their offices?

A: Martin said, “The ordinance was kind of born out of the process originally, and so a sub-committee was formed. We're at the table for that, but we're one of many voices, and when you have dozens of advocates and one landlord organization at the table, you're not going to see equitable legislation. And, in fact, what happened with this ordinance in particular, was that council took the draft proposal, which would have allowed a two-year look back to still consider recent convictions, they took that and just said ‘We're going to wipe everything out altogether.’ So it actually was maybe even worse after hearing what our concerns were.”

Shadbolt added, ”So there was actually a panel public hearing last year that I was the only landlord on that panel, and there was, I think there was about six or seven activists. I was quite horrified that when a particular council member started to speak, her reaction was, ‘Isn't there anybody else other than the Rental Housing Association that could be here?’ She simply just did not want to listen to the small landlord's point of view.”

Q: The criminals as a protected class in the ordinance, and combined with the series of other things that have been passed in recent years, do you see that affecting the standard that small landlords are using, for the criteria that they're using in selecting tenants? For example, is the landlord making it more difficult for maybe a middle of the road tenant to access housing?

A: Shadbolt said, “Absolutely. I'm a small landlord, and my rental criteria before First-in-Time came into effect was half a page and it was pretty liberal. I've housed former offenders, I've housed people in Section 8, people with the Landlord Liaison Project. When First-in-Time came into effect our half page of rental criteria went to five pages long. And I legally could not rent to somebody if they didn't meet that threshold of those criteria. So even though the city has lost the First-in-Time lawsuit, but the house appealed it, I'm looking at those and I'm actually probably going to keep most of those additional rental criteria. I have to protect my property, and I have to protect the residents that are in my duplexes and the other units.”

Q: So this is limiting access for maybe the middle- of- the-road tenants? Not just the criminals?

A: Shadbolt said, “Yes very much so.” Martin added, “I hear that every day from our members. ‘If I can't run a criminal background check, and that was one of the criteria I relied upon, what can I look at instead?’  And things like credit score, that requirement goes up, employment references, income, things like that. So now not only is it probably still difficult for an ex-offender to qualify, you don't get to have the conversation with the person because the criteria are so much higher that they're not going to apply in the first place. And now you're disadvantaging other people who aren't even in the category that this law is intended to protect. Lower income individuals who effectively are being priced out, or kind of regulated out by the unintended consequences that we have.”

Q: Why are the constitutional challenges important here?

A: Blevins said, “The Constitution is a particularly good format for this kind of a law, because we have what I think are ultimately good intentions, where a city is so committed to its particular end that it's willing to go through an extraordinary means to get there.

landlords sue city of seattle

Ethan Blevins, Pacific Legal Foundation

“And that's what the Constitution's built to prevent. So the Constitution limits the means the government can use to achieve certain ends. So there's no question that the government has a legitimate interest in preventing recidivism, helping people reintegrate into society who have been in criminal confinement for a long time, but to do so while imposing this extreme burden on a particular segment of society is directly contrary to what the Constitution built, which is a situation in which everyone's rights are due equal respect by the government.

“Here, with this particular challenge, we're raising two constitutional issues: the speech issue and the due process issue. Due process just says you can't deprive someone of a property interest, like the right to lease their property to an individual that they choose with an informed decision making process. You can't take that property interest away from them without due process of law, which means you can't do so in an arbitrary or unreasonable or unduly oppressive way, which is what occurs here, because there's no question that this is vital information that landlords want, and they have a right to access it.

“And that's very similar to the speech claim, which is just that First Amendment has consistently been interpreted to mean you have a right to receive information, you have a right especially to receive information from public records, and that's consistently been held to be part of the First Amendment. And landlords rely upon that information to make really important long term decisions. And so they have a First Amendment right to seek that information, and screening companies have a First Amendment right to share that information, which they can't do under this ordinance,” Blevins said.

Q: Are there any other cities or counties who've attempted this type of overreaching law?

A: Shadbolt said, “Nope. First in the nation.” Martin added, “An outright ban of the use of criminal records, this is the first in the country. And we're seeing council push the envelope. First-in-Time, first in the country. This is first in the country as well. That's just kind of the environment that we're in right now,” Martin said.

Resources:

Hear press conference announcing the lawsuit here

New lawsuit in Seattle: Housing ordinance is unfair and unconstitutional

Landlords Sue Seattle to Overturn Ban on Criminal Records When Screening Applicants

Fair Chance Housing Law

About the Rental Housing Association of Washington

Rental Housing Association of Washington with 5,300 members, is a state-wide trade association representing landlords and property managers. RHAWA has existed in some form or another since 1935, starting out as a Seattle based association that grew into a regional resource throughout the Puget Sound area. In an effort to serve all those in the rental housing industry regardless of geographic location in Washington, RHAWA expanded to become a statewide association in 2012.

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