TWO BLACK WOMEN from Massachusetts are at the center of what could become a landmark federal case about whether software that screens potential tenants is illegally biased against Black and Hispanic applicants.
Rachael Rollins, the US attorney for Massachusetts, weighed in on the case, Louis vs. SafeRent Solutions, in a court brief this week, arguing that the technology used by tenant screening companies must comply with anti-discrimination rules. “Algorithms are written by people. As such, they are susceptible to all of the biases, implicit or explicit, of the people that create them,” Rollins said in a statement. Rollins said her filing “recognizes that our 20th century civil rights laws apply to 21st century innovations.”
SafeRent Solutions is a company used by landlords to screen potential tenants. SafeRent gives rental applicants a risk score based on their credit history, other credit-related information including non-tenancy debts, and eviction history.
Mary Louis, 54, of Malden, and Monica Douglas, 65, of Canton, both Black women with subsidized housing vouchers, are the plaintiffs, along with the Community Action Agency of Somerville, which helps people with vouchers find housing. They sued SafeRent and Metropolitan Management Group, a Boston-based apartment management company, in August in US District Court in Massachusetts. Both women were denied apartments by Metropolitan because of SafeRent scores. The plaintiffs are represented by attorneys from Greater Boston Legal Services, Washington, DC-based firm Cohen, Milstein, Sellers & Toll, and the Boston-based National Consumer Law Center.
The lawsuit alleges that SafeRent “assigns disproportionately lower SafeRent Scores to Black and Hispanic rental applicants compared to White rental applicants,” partly because it measures credit history, which includes non-tenant-related debt.
“SafeRent Scores cause Black and Hispanic rental applicants to be disproportionately likely to be denied housing,” attorneys for Louis, Douglas, and the housing agency wrote in their court brief. They argue that for tenants who hold housing vouchers, there is no legitimate reason to evaluate their credit scores since payment of much of their rent is guaranteed by the voucher.
The lawsuit argues that credit histories are an incomplete record that do not accurately predict how likely a tenant will be to pay rent on time. Using credit histories hurts Black and Hispanic consumers, who have median credit scores of 612 and 661, respectively, compared to 725 for White consumers.
SafeRent and Metropolitan Management Group are seeking to have the case dismissed. Attorneys for SafeRent wrote in their brief that credit checks of prospective tenants are routine and well-accepted, and there is no statistical evidence of a disparate impact on Black, Hispanic, or voucher-holding applicants. SafeRent does not know an applicant’s race.
SafeRent says credit checks are relevant, because even tenants with housing vouchers must pay a portion of their rent, and poor credit suggests a tenant may have trouble paying rent on time.
SafeRent says it should not be held liable for decisions made by landlords, who decide what scores they will accept and how they will use scores to make decisions on tenants.
Lawyers for Metropolitan Management Group say a property management group has a responsibility to assess the risks of accepting each tenant “including attempting to determine whether a given tenant is likely to make timely payments, likely to abide by all other terms of the lease, and unlikely to engage in criminal behavior that could compromise the safety of other tenants.”
“Credit history is both a common and legally accepted tool used by housing providers to assist in their decision process, because it provides a window into the potential risk of default associated with an applicant,” Metropolitan Management Group’s attorneys wrote.
The Metropolitan brief says Louis’s claim “is a generalized but understandable grievance with the historical inequities in American society and the consequential results of these inequities,” but does not prove discrimination by Metropolitan. “Put another way, Louis seeks to hold Metropolitan accountable for disparities it didn’t create: longstanding inequities in access to wealth and wealth-building mechanisms that have contributed to racial and income disparities in credit scores and credit histories.”
The US Department of Justice, through the US Attorney’s office, opposes efforts to dismiss the case. The Department of Justice says the Fair Housing Act, which prohibits discrimination, does apply to tenant screening companies like SafeRent. Rollins’ office does not weigh in on whether discrimination occurred in this case.