On July 26, 2023, the Honorable Angel Kelley for the United States District Court of Massachusetts denied defendants’ motion to dismiss Fair Housing Act claims, holding that SafeRent Solutions, LLC, a national tenant screening provider formerly known as CoreLogic Rental Property Solutions, is subject to the Fair Housing Act’s ban on racial discrimination in housing. Even though SafeRent is not a landlord, the court determined that the plaintiffs adequately alleged that property owners relied solely on SafeRent’s tenant screening score, and adequately alleged those scores had a disparate impact on Black and Hispanic renters. FHA claims against landlord Metropolitan were also permitted to proceed, while claims under a Massachusetts consumer protection statute were dismissed.
Plaintiffs contend that the SafeRent algorithmic screening score relies in significant part on renters’ credit information, which includes debts unrelated to prior tenancies, disproportionately excluding from housing Black and Hispanic renters who use federally funded housing vouchers to pay the vast majority of their rent.
On January 9, 2023, the U.S. Department of Justice and the U.S. Department of Housing and Urban Development filed a statement of interest in this case.
May 25, 2022, Cohen Milstein and co-counsel, Greater Boston Legal Services and National Consumer Law Center, filed a putative class action lawsuit on behalf of Mary Louis, Monica Douglas, and the Community Action Agency of Somerville against SafeRent Solutions, LLC in the U.S. District Court for the District of Massachusetts. Plaintiffs allege that SafeRent, which provides tenant screening services to landlords and property owners, has been violating the Fair Housing Act and related state laws for years because its tenant screening software algorithm disproportionately gives low scores to Black and Hispanic rental applicants who use federally funded housing vouchers, causing them to be denied housing.
Plaintiffs claim that SafeRent assigns disproportionately lower SafeRent Scores to Black and Hispanic rental applicants compared to white rental applicants, which is due in part to SafeRent’s use of credit history, which includes non-tenancy debts. According to a 2022 study conducted by the Urban Institute, as of October 2021, Black consumers have a median credit score of 612 and Hispanic consumers have a median credit score of 661, as compared to white consumers’ median credit score of 725, leading to unfair bias in accepting an applicant’s lease application. Thus, the Complaint alleges, the inclusion of such credit history information in producing SafeRent Scores causes the SafeRent Scores to be disproportionately lower for Black and Hispanic rental applicants.
SafeRent Scores are designed, marketed, and used to screen prospective tenants for rental housing. These Scores, however, cause Black and Hispanic rental applicants to be disproportionately denied housing. The Score cannot be adjusted by the landlord nor can a variable like a housing voucher be weighted in the Score, yet the Score is used to decide if an applicant will be accepted. SafeRent Score’s algorithm, for instance, does not consider the financial benefits of housing vouchers in assigning Scores. Specifically, when a housing voucher is used, on average over 73% of the monthly rental payment is paid by public housing authorities directly to housing providers.
Plaintiffs seek to end defendants’ tenant screening practices that have an adverse impact on Black and Hispanic rental applicants and create a fair playing field for those using housing vouchers.
The case name is: Louis, et al. v. SafeRent Solutions, et al., Case No. 1:22-cv-10800, United States District Court for the District of Massachusetts
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