Fair Chance Housing Act: Impact on Rental Properties and Investors
In recent years, there has been a growing national discussion surrounding criminal justice reform and how it affects various aspects of society. One significant piece of legislation that has been implemented to address these issues is the Fair Chance Housing Act. This law aims to provide individuals with a criminal record equal opportunities in the housing market and protect them from discrimination. While this legislation has undoubtedly been a step in the right direction, it has also potentially impacted rental properties and investors. In this article, we will explore the impact of the Fair Chance Housing Act on rental properties and investors and the changes that have been observed since its enactment.
What is the Fair Chance Housing Act?
The Fair Chance Housing Act, also known as Ban the Box, is a federal law that was passed in 2016. It prohibits landlords and property managers from inquiring about an individual’s criminal history on rental housing applications. This law also prohibits discriminatory rental housing practices based on an individual’s criminal record. Essentially, the Fair Chance Housing Act aims to remove barriers for individuals with a criminal record from obtaining housing and promote fair and equal access to housing opportunities.
Impact on Rental Properties
Rental Criteria Changes
One of the primary ways the Fair Chance Housing Act has impacted rental properties is through changes in rental criteria. Before the enactment of this law, many landlords and property managers routinely screened potential tenants for criminal history as part of their rental criteria. However, after the implementation of the Fair Chance Housing Act, these individuals are now required to remove any questions related to criminal history from their rental applications.
Increased Tenant Pool
Another significant impact of the Fair Chance Housing Act on rental properties is the potential increase in the tenant pool. With the removal of criminal history from rental criteria, individuals with a criminal record have a fair chance of being considered for a rental property. This means that landlords and property managers may now have access to a more diverse pool of potential tenants, increasing their chances of finding suitable and reliable renters for their properties.
Potential Challenges for Landlords
While the Fair Chance Housing Act has undoubtedly had a positive impact on rental properties, it has also presented some challenges for landlords and property managers. With the removal of criminal history from rental criteria, it may be more challenging for landlords to assess the risk of potential tenants accurately. For landlords, this may also mean the need for additional due diligence when screening applicants to ensure the safety and security of their property and existing tenants.
Impact on Investors
Investors who own rental properties have also been impacted by the Fair Chance Housing Act. With changes in rental criteria and an increased tenant pool, investors may need to adapt their investment strategies to remain competitive in the housing market.
Higher Demand for Rental Properties
The Fair Chance Housing Act has the potential to increase the demand for rental properties, particularly in areas where individuals with a criminal record may be more likely to reside. For investors, this presents an opportunity to generate higher rental income and potentially increase the value of their properties.
Possible Increase in Turnover
On the other hand, the influx of potential tenants with a criminal record may also lead to higher turnover for investors. With a higher demand for rental properties, tenants may be less likely to renew their leases as they have more options available to them. This could result in higher turnover costs for investors, such as cleaning and repairs, which can impact their return on investment.
Legal Ramifications
Investors may also need to be mindful of potential legal ramifications that may arise due to the Fair Chance Housing Act. For instance, investors must ensure that their rental policies and procedures are compliant with the law to avoid any discrimination lawsuits. Failure to do so could result in costly legal fees and damage to their reputation as a landlord.
In conclusion
The Fair Chance Housing Act has undoubtedly had a significant impact on rental properties and investors. As society continues to push for criminal justice reform and equal opportunities for individuals with a criminal record, it is essential for landlords and investors to be aware of the changes and adapt their practices accordingly. While there may be some challenges in implementing this law, it ultimately promotes fair and equal access to housing for all individuals, regardless of their past mistakes.
