How to Plan for Long-Term Tenants In Compliance with Fair Housing Regulations
Every apartment manager and leasing agency look for ideal tenant leads. You want reliable people and, hopefully, tenants planning to stay for the long term. In most industries, you could follow your analytics to the demographics most likely to plan for long-term housing. However, fair housing laws and regulations change the playing field when it comes to targeting in real estate – and rightly so.
How can you manage your tenant leads fairly and strategically at the same time? Can you provide fair and completely bias-free housing while also targeting responsible tenants with potentially long-term tenants? The housing industry has tackled this problem with our usual enthusiasm and there is a selection of strategies you can use for fair lead management.
The Fair Housing Act
The Fair Housing Act is a set of laws that regulates how both home sellers and rental investors choose who lives in homes. This ensures that key factors have been used prejudicially in the past. The fair housing act prevents screening residents unfairly based on a legal definition of unfair screening factors.
What You Can’t Screen For
When targeting clients of any type, demographics are often the first data point to track. However, demographic information is where fair housing limits targeting. The reason for this is rooted in a history of unfair and prejudiced housing decisions. Today, few of us still have the biases of the past but the laws serve to prevent unconscious bias, unfair economic standards, and the occasional bad apple from souring the housing market.
Here are tenant facts you legally cannot ask about or screen for:
- Race or Color
- Ethnicity or National Origin
- Family Status or Family Members
- Disability Status
How to Screen for Long-Term Tenants
What are the key factors you can screen for to identify long-term tenants? While you can’t ask some personal questions relating to family or background, you can both ask and investigate the stability, financial prospects, and long-term plans of your applicants to find the most potentially long-term tenants.
Here are the key indicators for long-tenancy:
- Stable Job History
- High Credit Rating
- Good Rental History
- Income and Count of Adult Earners
- Reasons for Moving – Work-Related
- Long-Term Plans in the Area
Assess Your Application Questionnaire
The first step is to make sure that your application content is compliant with Fair Housing. If you started with a template or an expert on your team, chances are you are already in compliance as standard practices naturally stay within regulations. However, it is important to screen out any dangerous personal questions. You can ask if a tenant has pets and the number of people in their household, but you can’t ask if they have children or if they are applying with a spouse.
The more personal your approach to applications, the more careful you will need to be with content. If you have a detailed questionnaire, be sure that no question crosses one of the protected lines or facts about your applicants.
Work Through a Property Management Service
Real estate professionals with experience in the industry already know the fair housing act and how to work within it. Property managers specialize in providing compliant, expert services for apartments and For many investment property owners, the process of tenant turnover is the most challenging part of the process. Attracting tenants, carefully screening them, and choosing the best new resident for the property. If you want to provide fair housing but worrying about the detailed fair housing laws and avoiding violations sounds like more than you want to handle, a property management service will ensure that every tenant recruitment is both smooth and perfectly in compliance with the fair housing act regulations.
Use Screening Software to Prevent Bias Factors
One of the best ways to guarantee that no human bias – intentional, accidental, or subconscious – is statistically impossible is with software. Tenant screening software can accept applications that may include personal information that indicates things you should not judge a tenant by. A tenant’s name alone is enough to indicate their background or ethnicity. They may mention family details without being asked. But the details you should be screening for like income and work history can be read by the computer. Applications can be scored by the perfect neutral party – a computer – without any personal information being considered.
Of course, screening software can’t perfectly choose your new residents. But it can help pre-screen applications so that initial rejections are fair and your top finalists are statistically your top finalists and not an emotionally personal favorite.
Train Your Team in Fair Housing Interview Strategy
The final piece of the puzzle is, of course, your team. Whether you screen alone or with a team that helps you filter applications and interview tenants, the human contact part of renting an apartment must be handled with care. It’s those personal moments where fair housing violations are most likely to occur – even if every interview is warm, friendly, and completely bias-free. The reason is this: Your team can’t ask about family or background.
The interviewer can’t ask if a potential tenant is married or getting married. They can’t ask about children or where tenants plan to go to church. While your interviewers can’t stop tenants from sharing this information spontaneously, they also can’t encourage the sharing or ask for more information. No matter how friendly the interview, digging into protected status details can become a violation risk, whether the tenants are approved or denied.
What interviewers can ask about is long-term plans, career plans, and intention to stay in the area. If you’re looking for long-term tenants, income and plans matter more than the demographics of any of the protected statuses.
Strategizing for Long-Term Tenants While Being Fair-Housing-Compliant
Every apartment brand and leasing agency can (and should!) target your best possible tenants. Fair housing laws help you streamline your decision-making based on the facts that matter and ignore false-economy decisions based on demographics or history. By using these strategies, you can guarantee that every tenant turnover is fair-housing compliant while also targeting your best potentially long-term tenants applicants. Contact us today to explore more tenant turnover success strategies.