The Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD) recently announced they filed a Statement of Interest to explain the Fair Housing Act’s (FHA) application to algorithm-based tenant screening systems. The Statement of Interest was filed in Louis et al. v. SafeRent et al., a lawsuit pending in the U.S. District Court for the District of Massachusetts alleging that defendants’ use of an algorithm-based scoring system to screen tenants discriminates against Black and Hispanic rental applicants in violation of the FHA, according to a release from the DOJ.

“Housing providers and tenant screening companies that use algorithms and data to screen tenants are not absolved from liability when their practices disproportionately deny people of color access to fair housing opportunities,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said in the release. “This filing demonstrates the Justice Department’s commitment to ensuring that the Fair Housing Act is appropriately applied in cases involving algorithms and tenant screening software.”

“Algorithms are written by people. As such, they are susceptible to all of the biases, implicit or explicit, of the people that create them,” U.S. Attorney Rachael Rollins for the District of Massachusetts said. “As the housing industry and other professions adopt algorithms into their everyday decisions, there can be disparate impacts on certain protected communities. Stable and affordable housing provides a unique pathway to success, opportunity and safety. We must fiercely protect the rights and protections promulgated in the Fair Housing Act. Today’s filing recognizes that our 20th century civil rights laws apply to 21st century innovations.”

HUD General Counsel Damon Smith spoke to tenant screening.

“Tenant screening policies are not exempt from the Fair Housing Act’s protections just because decisions are made by algorithm,” Smith said. “Housing providers and tenant screening companies must ensure that all policies that exclude people from housing opportunities, whether based on algorithm or otherwise, do not have an unjustified disparate impact because of race, national origin or another protected characteristic.” 

The Louis lawsuit was filed on behalf of two plaintiffs, Mary Louis and Monica Douglas, Black rental applicants who use housing vouchers to pay part of their rent, according to the release.

Plaintiffs applied for rental housing but allege they were denied due to their “SafeRent Score,” a score derived from defendant SafeRent’s algorithm-based screening software. The plaintiffs allege that SafeRent scores result in disparate impact against Black and Hispanic rental applicants because the underlying algorithm relies on certain factors that disproportionately disadvantage Black and Hispanic applicants, such as credit history and non-tenancy related debts, while failing to consider one highly relevant factor, that the use of housing vouchers funded by HUD makes such tenants more likely to pay their rents.

The defendants have moved to dismiss the case, and the plaintiffs have opposed the defendants’ motions. Through the Statement of Interest, the department seeks to assist the court by correcting two questions of law erroneously represented in the defendants’ motions to dismiss. First, the statement sets out the appropriate standard for pleading disparate impact claims under the FHA, the DOJ said.

Second, the statement clarifies that the FHA’s text and caselaw support the FHA’s application to companies providing residential screening services. The motions to dismiss are pending before the court.

The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status (having one or more children under 18), nation origin, and disability.