Chairperson Bonds and members of the Committee, thank you for the opportunity to testify today. My name is Kate Coventry, and I am a Senior Policy Analyst at the DC Fiscal Policy Institute. DCFPI is a nonprofit organization that promotes budget choices to address DC’s economic and racial inequities and to build widespread prosperity in the District of Columbia, through independent research and policy recommendations.
I am here today to express strong support for B24-0106, the “Fair Tenant Screening Act of 2021.” B24-0106 sets tenant eligibility screening standards for landlords. Given overwhelming evidence that current tenant-screening processes are rife with errors, this legislation is needed to ensure fairness in this process.
Research Finds High Number of Errors in Tenant Screening Tools, the District Should Act to Protect Rental Applicants
Tenant screening is the process by which landlords accept and review rental applications to determine whether to offer a unit to an applicant. B24-0106 sets tenant eligibility screening standards for landlords to improve fairness in this process. Among other things, it requires landlords to:
- provide, in writing, the specific process and criteria used for tenant screening and information on rights under this law and the criminal record screening law;
- state in writing the specific reasons for any denial, including providing a copy of any records used, and inform the applicant how to appeal; and,
- allow denied applicants to provide information that the records were wrong or to provide evidence of mitigating circumstances, like an explanation for negative history, or provide information to show that the situation will not reoccur.
Requiring reasons and documentation for denials, and providing an opportunity to appeal, is very important because of the frequency of errors in the records that are used for tenant screening. Seventy-nine percent of respondents in one study found there were errors in one of their three major consumer credit reports. One in four of these errors were significant enough to cause a wrongful denial of credit. There have been dozens of lawsuits against criminal record database companies alleging that their records contain inaccurate information. And state sex offender registries are “notorious” for reporting inaccurate and outdated information.
Common types of error include:
- overreporting—when a record is about a different person with the same name as the applicant;
- criminal identity theft—where a person claims to be the applicant;
- including records that have been expunged; and,
- clerical errors.
The bill also limits what information the landlords can consider, particularly limiting consideration of court cases or lease violations that happened more than two years ago. Under the proposal, landlords could not consider past court cases in which a landlord did not get a judgment or when the tenant filed a case against the landlord. Additionally, they could not consider a lease violation that was related to domestic violence, disability, or being the victim of a crime.
The bill also requires all applicant screening companies to register in the District and to comply with the above provisions. This is important because although they can research applicants themselves, the majority of private housing providers now purchase tenant screening reports that combine the information cited above that is already riddled with errors.
The weight of the evidence “suggests that the chance of finding significant errors in a tenant-screening report is at least as high as the combined likelihood of finding errors in each particular component and additional opportunities for clerical errors and other mistakes tend to arise any time an agency interprets, repackages, abridges or otherwise modifies information in a component part. This is especially true of scores or recommendations based on criminal and civil litigation records, which may require substantial skills to properly interpret.”
Of particular concern is that some tenant screening reports only contain their opinion of whether the landlord should accept or reject the applicant without providing the underlying data for this decision. This means that when applicants ask why they received a rejection, the landlord honestly cannot tell them, and applicants have no means of disputing the rejection.
Another major issue is that unlike credit reports, applicants have no practical method to check tenant-screening reports or challenge inaccurate information prior to applying for housing. Federal law allows individuals to request a free credit report from the three major consumer credit bureaus each year, and there is a formal dispute process. In contrast, there are an estimated 2,000 companies that offer tenant-screening services and disputing an incorrect report only affects the report of the company involved. Thus an applicant may have to challenge the same error over and over again with no way to affect future reports, essentially locking them out of the rental market.
Current Practices Are Not Sensible for Applicants with Vouchers
Finally, the bill sets sensible parameters for applicants who are tenant voucher holders. Currently these applicants can be denied based on rental payment history, income, or credit requirements that do not take into account that the government will be paying all or the majority of the rent. The DC Interagency Council on Homelessness has recognized this as a barrier to ending homelessness, finding that “clients with no or poor credit or rental history…face especially steep barriers” to securing a unit. B24-0106 forbids these practices and should lead to more units being available to voucher holders.
DCFPI strongly supports B24-0106 and urges the Committee to work with legal advocates to resolve their concerns.
 Eric Dunn and Marina Grabchuk. “Background Checks and Social Effects: Contemporary Residential Tenant-Screening Problems in Washington State,” Seattle Journal for Social Justice, Volume 9: Issue 1.
 Anna C. Reosti, “Tenant Screening and Fair Housing in the Information Age,” 2018.
 Eric Dunn and Marina Grabchuk.
 Lauren Kirchner and Matthew Goldstein, “How Automated Background Checks Freeze Out Renters,” New York Times, Mary 28, 2020.
 Eric Dunn and Marina Grabchuk.
 The DC Interagency Council on Homelessness, “Looking Back to Move Forward: Progress and Lessons Learned During the First Four Years of Homeward DC,” revised September 2019, p. 36.