Fair Housing Act: What Landlords Need To Know

The Fair Housing Act was enacted by congress to ensure that everyone who ever applies for a house would be treated equally and fairly. The act aims to advise landlords, buyers, and renters of the practices deemed as discriminatory.

Discriminatory practices, according to the Department of Housing and Urban Development (HUD), include: adjusting prices for the sale or rental of property; delaying or failing to perform necessary repairs or maintenance for certain renters; limiting services facilities, or privileges of a home, based on a persons gender, nationality, or racial characteristics.

About the Fair Housing Act

The Fair Housing Act is a federal law enacted in 1968 that prohibits discrimination in the purchase, sale, rental, or financing of housing – private or public – based on race, skin color, sex, nationality, or religion. The statute has been amended several times, including in 1988 to add disability and family status.

The act was created on the principle that every American should have an equal opportunity to seek a place to live, without being afraid of discrimination due to factors outside their control.

Key Takeaways

• The Fair Housing Act prohibits discrimination against home renters and buyers by landlords, sellers, and lenders based on, Race, Color, Religion, Sexual orientation, Nationality, Disability, Family status.
• Enforcement of the Act occurs at the federal level under the Department of Housing and Urban Development (HUD).
• State laws have the potential to strengthen protections provided by the Fair Housing Act, but they cannot diminish them.
• Despite legal safeguards, housing discrimination remains prevalent and challenging to substantiate.
• Successfully resolving a legal case requires thorough documentation and patience.

History of the Fair Housing Act

The enactment of the federal Fair Housing Act on April 11, 1968, came only after a long and difficult journey following on from the Civil Rights Act of 1964. From 1966-1967, Congress regularly considered the fair housing bill, but failed to garner a strong enough majority for its passage. 

In 1974, the Fair Housing Act was broadened by the federal government to include safeguards against gender discrimination. Subsequent expansions in 1988 extended protections to encompass families with children and individuals with disabilities. 

Various state and local jurisdictions have augmented these protections with specific measures for sexual orientation and other categories. For example, in New York, inquiries into a person's criminal record are prohibited by banks and landlords. Additionally, New York City mandates non-discrimination based on immigration status or lawful occupation. Racial discrimination prohibitions have also been extended to encompass cultural hairstyles, such as dreadlocks, among other attributes.

During National Fair Housing Month in 2023, Rep. Adam Schiff, Sen. Tim Kaine, and Rep. Scott Peters reintroduced the Fair Housing Improvement Act. This legislation further extends the protections offered by the Fair Housing Act to veterans and low-income families. Specifically, the Act addresses discrimination faced by individuals using Housing Choice Vouchers and other legitimate income sources to pay rent.

Fair Housing Act Protected Classes

The seven main protected classes under the Fair Housing Act are:

1. Color
2. Disability
3. Familial status (i.e., having children under 18 in a household, including pregnant women)
4. National origin
5. Race
6. Religion
7. Sex

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How Does the Fair Housing Act Combat Housing Discrimination?

1. Renting and Selling

Essentially, the act prevents anyone from refusing to sell, rent, or negotiate for a home based on one of the protected classes.

This includes making the house unavailable to people or lying about the availability of the house. Additionally, you can’t provide a different level of service or sell or rent the property with different terms or conditions. For example, you would not be able to nor are you allowed to exclude people from, say, a rental listing website.

If you do want to refuse or deny a person’s application it must be because of a legitimate reason. We outline the legitimate reasons to refuse to rent to sell to someone further on in this article.

2. Loan Protection

The Fair Housing Act also means mortgage providers can’t discriminate against those who apply for loans. Discrimination in this scenario would include setting different loan conditions, eg. a higher interest rate, setting different requirements for purchasing a loan, refusing to make the required information available, and using discriminatory practices when appraising a property.

3. Other Illegal Actions

The Fair Housing Act stops landlords and sellers from using discriminatory language when advertising a property. This also applies to those that are otherwise exempt from the Fair Housing Act rules, such as owner-occupied units.

You also can’t threaten or interfere with anyone’s fair housing rights.

Fair Housing Violations: Examples

Here are some examples of what may be considered illegal discrimination under the Fair Housing laws:

• A landlord falsely claims an apartment is rented upon realizing the caller is of a particular race or nationality, then offers it to a caller of a different race.
• A real estate agent refuses to show a house in a certain neighborhood or steers a buyer away based on their race, religion, or ethnicity.
• A homeowner advertises a house for rent or sale but explicitly states they won't rent or sell to families with young children, violating familial status protections.
• A mortgage lender applies unfavorable terms or higher interest rates based on neighborhood demographics or borrower characteristics like sex, race, or nationality.
• A newly constructed condominium complex lacks accessibility features required for wheelchair users.
• A rental agent denies an apartment to a single woman with children.

Less obvious violations may include:

• Unequal negotiation terms or housing provision between protected and non-protected classes.
• Deliberately making housing unavailable or unappealing.
• Falsely claiming housing is unavailable for inspection.
• Failure to provide reasonable accommodations or timely repairs.
• Pressuring homeowners to sell due to an impending arrival of a particular protected class (known as blockbusting).

Awareness of these scenarios is crucial for landlords, agents, lenders, and developers to prevent discrimination against protected classes.

Exemptions To The Fair Housing Act

There are several exemptions to the Fair Housing Act. However, even those who are exempt should do their best to follow the guidelines of the Fair Housing Act closely.

The exemptions include:

• Single-family homes that are rented out or sold through a broker.
• Owner-occupied homes with no more than four units
• Members-only private clubs or organizations
• Religious organizations, as long as the property is not commercially available
• Senior housing due to the Housing for Older Persons Exemption

Fair Housing Act Enforcement

It is primarily the duty of the U.S. Department of Housing and Urban Development (HUD) to enforce the Fair Housing Act. However, the U.S. Department of Justice (DOJ) also has the authority to bring legal action against defendants accused of engaging in a "pattern or practice" of discrimination or discriminating in a manner that raises issues of "general public importance." The determination of what constitutes a matter of "general public importance" is at the discretion of the U.S. attorney general, as affirmed by various court rulings.

Specifically, the DOJ can initiate lawsuits under the Fair Housing Act in cases involving systematic discrimination in the provision of houses or home loans and has the authority to pursue criminal charges in instances where discrimination involves the use of force or threats.

How is the Fair Housing Act Enforced?

The Fair Housing Act is enforced in several ways.

The first is through fair housing testers. These are sort of like secret shoppers. They hire people to pose as renters or home buyers to see if any discriminatory practices are being used. This means that they will not only be looking at written examples such as property listings but also talk to people in person, or on the phone.

The second tactic they employ is to investigate any discriminatory claims. Any individuals who feel that they have been unfairly discriminated against can file a claim with the HUD, and it is their responsibility to investigate and decide if there is any merit to the claim and if further legal action needs to be taken.

If the complaint cannot be resolved through conciliation, HUD determines whether there is reasonable cause to believe that federal laws were violated. Upon establishing such reasonable cause, HUD issues a Charge of Discrimination. Within 30 days, either the individual alleging discrimination or the respondent can opt to have the charge adjudicated in federal court or before a HUD administrative law court.

U.S. Department of Housing and Urban Development. "Learn About the FHEO Complaint and Investigation Process."

What Landlords Need to Know About The Fair Housing Act

To ensure you stay compliant with the Fair Housing Act you should assume that everyone you deal with is a fair housing tester working for the HUD.

As such, assume you will be called out if you do not adhere to the terms of the act.

When deciding whether or not to rent to a tenant you can decide on the following grounds:

• Poor credit
• Insubstantial money
• Bad rental history, eg. previous evictions on their record.

Be consistent with your tenant screening process, treating every prospective tenant the same way. Require the same documents, referrals, and fees.

Some states have additional protected classes, such as sexual orientation, age, and even student status. So, make sure to check your local and state fair housing laws to ensure you are following them exactly.

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Fair Housing Act FAQs

What are the most common fair housing violations?

The most common fair housing violations can vary based on factors such as location, demographics, and prevailing attitudes. However, some commonly recurring violations include:

1. Discriminatory Advertising: This involves advertisements that explicitly or implicitly discriminate against protected classes, such as stating preferences for certain races or religions.
2. Steering: This occurs when real estate agents or landlords guide individuals toward or away from certain neighborhoods based on their race, ethnicity, religion, or other protected characteristics.
3. Refusal to Rent or Sell: Denying housing opportunities to individuals based on their race, ethnicity, religion, familial status, disability, or other protected characteristics is a direct violation of fair housing laws.
4. Unequal Terms and Conditions: Providing different terms, conditions, or privileges to tenants or buyers based on their membership in a protected class constitutes discrimination.
5. Retaliation: Taking adverse actions against individuals who assert their fair housing rights, such as filing complaints or participating in investigations, is prohibited.
6. Failure to Accommodate: Landlords and housing providers must reasonably accommodate individuals with disabilities, such as allowing service animals or making reasonable modifications to the property.
7. Harassment: Subjecting individuals to harassment or creating a hostile environment based on their protected characteristics violates fair housing laws.
8. Failure to Provide Reasonable Accommodations: Failing to make reasonable accommodations for tenants or buyers with disabilities, as required by law, is a common violation.

These are just a few examples, and the scope of fair housing violations can be broad. State and local laws might offer additional protections.

What are the 7 personal characteristics that are protected by the Fair Housing Act?

The Fair Housing Act protects individuals from discrimination in housing based on seven personal characteristics, often referred to as "protected classes." These protected classes are:

1. Race: Discrimination based on race, including color, is prohibited.
2. Color: Discrimination based on skin color or complexion is prohibited.
3. Religion: Discrimination based on religious beliefs or practices is prohibited.
4. National Origin: Discrimination based on a person's country of origin, ancestry, or birthplace is prohibited.
5. Sex: Discrimination based on sex, including gender identity or sexual orientation, is prohibited.
6. Familial Status: Discrimination against individuals who have children under the age of 18 or who are pregnant is prohibited.
7. Disability: Discrimination based on disability is prohibited. This includes physical or mental impairments that substantially limit one or more major life activities, a history of such impairments, or being regarded as having such impairments.

What Was The Problem With the Fair Housing Act of 1968?

The Fair Housing Act of 1968 was a landmark piece of legislation aimed at combating housing discrimination based on race, color, religion, and national origin. However, there were a few signifivcant problems with the original Fair Housing Act. These include its limited scope. The Fair Housing Act of 1968 did not provide protections against discrimination based on factors such as sex, familial status, disability, or sexual orientation.

Secondly, there were and remain siginificant challenges to enforcement. Even though the Fair Housing Act prohibited discrimination, enforcement mechanisms were initially weak with few resources dedicated to investigating and prosecuting violations of the Act.

And thirdly, the original Fair Housing Act contained exemptions that allowed certain types of housing, such as single-family homes sold or rented without the use of a broker, to be excluded from its provisions. These exemptions created loopholes that could be exploited to continue discriminatory practices in some situations.

Who Enforces the Fair Housing Act?

The Fair Housing Act is enforced by several federal agencies, primarily:

1. The U.S. Department of Housing and Urban Development (HUD) is responsible for administering and enforcing the Fair Housing Act at the federal level.
2. The U.S. Department of Justice (DOJ) has authority to file lawsuits against individuals or entities engaged in discriminatory housing practices under the Fair Housing Act. The DOJ's Civil Rights Division handles enforcement actions related to fair housing, including prosecuting cases of housing discrimination in federal courts.
3. The U.S. Department of Agriculture (USDA): The USDA's Rural Housing Service administers housing programs in rural areas and is responsible for enforcing fair housing laws in federally-assisted housing programs.
4. The Treasury Department enforces fair housing laws in connection with federally-backed mortgage lending through its oversight of financial institutions and mortgage lenders.

In addition to these federal agencies, many states and local governments have their own fair housing laws and enforcement agencies.

When Did the Fair Housing Act Pass?

The Fair Housing Act was passed by the United States Congress on April 11, 1968, and signed into law by President Lyndon B. Johnson shortly after. This landmark legislation aimed to combat housing discrimination based on race, color, religion, and national origin. The Fair Housing Act was a significant component of the Civil Rights Act of 1968, also known as the Fair Housing Act or the Open Housing Act, which was enacted during a tumultuous period of civil rights activism in the United States.

What Are Penalties for Fair Housing Act Violations?

Penalties for Fair Housing Act violations can vary depending on the severity of the violation and the circumstances involved. Some potential penalties may include:

1. Compensatory Damages: Violators may be required to compensate individuals who have been harmed by their discriminatory actions.
2. Punitive Damages: In cases of intentional or particularly egregious discrimination, violators may be ordered to pay punitive damages in addition to compensatory damages. Starting at $16,000 for an initial violation and escalating to $150,000 for cases prosecuted by the Justice Department.
3. Civil Penalties: Violators may be subject to civil penalties, which are monetary fines imposed by the court.
4. Injunctive Relief: Courts may issue injunctions requiring violators to cease discriminatory practices and take corrective actions. Injunctive relief may include  implementing anti-discrimination policies, providing fair housing training to employees, and making changes to housing policies and practices.
5. Attorney's Fees and Costs: Violators may be required to pay the attorney's fees and costs incurred by the plaintiff in bringing the case to court.
6. Criminal Penalties: In cases of egregious discrimination or where discrimination involves threats, coercion, or violence, violators may be subject to criminal prosecution. Criminal penalties may include fines and imprisonment.

Which Fair Housing Law Added Sex to the List of Protected Classes?

The Fair Housing Amendments Act of 1988 added sex as a protected class to the Fair Housing Act. This amendment expanded the scope of the Fair Housing Act to prohibit discrimination in housing based on sex, in addition to the existing protections against discrimination based on race, color, religion, and national origin. The inclusion of sex as a protected class was a significant step forward in the effort to address gender-based discrimination in housing and ensure equal housing opportunities for all individuals.

Which Act Prohibited Discrimination in the Selling or Renting of Homes?

The Fair Housing Act, passed in 1968 as part of the Civil Rights Act, prohibited discrimination in the selling or renting of homes based on race, color, religion, and national origin. This landmark legislation aimed to combat housing discrimination and ensure equal access to housing opportunities for all individuals, regardless of their race, religion, or national origin.