Debate over tenant background checks heats up in Minneapolis

Tenant advocates pushing for solutions to Minnesota's affordable housing shortage say policymakers need to overhaul a process that often blocks people from finding an apartment: tenant screening.

Festering tensions between tenants and landlords are becoming impassioned as the Minneapolis City Council mulls new limitations on landlords' ability to turn away potential renters based on their past.

Background checks are standard practice for landlords to identify a potentially unreliable or troublesome tenant. But advocates say low-income residents who have minor criminal or eviction histories are often unable to convince landlords of their renter worthiness.

Major property owners and companies that perform background checks oppose the restrictions, but some acknowledge that screening relies on government databases that can include incomplete or inaccurate records.

Kadaisha Tolliver spent several months looking for a new apartment for herself and her daughter in Minneapolis. Her applications were denied twice, with no explanation. By the time she found out she was the victim of identity theft, there was no recourse.

"I never got any type of paperwork or anything physically seeing what popped up," Tolliver said. "All I got verbally was 'something came up' on my background and I got denied."

Tenants are legally entitled to know why their applications were denied. Background screening companies are considered consumer reporting agencies because they sell their services around collecting and distributing information about criminal records, credit history and evictions, among other information.

What's more, tenant screening process companies are "that disinterested third party" that never meets prospective tenants and "has no preconceptions about who they are and whether they would be good tenants or not," Buche said.

She said the problem her company often sees is applicants who put false information, wrong addresses, no Social Security number, or are not upfront about prior evictions or convictions.

"If I could say one thing to tenants to help them survive a screening, it's tell the truth; do not lie on the application," Buche said. "I wish I had a nickel for every one of my clients who said 'I would be willing to give them a chance if they hadn't lied to me.' "

Minneapolis City Council President Lisa Bender and Council Member Jeremiah Ellison are pushing a sweeping ordinance that would prevent property owners from denying a renter on the basis of misdemeanors more than two years old, arrests that did not result in a conviction, expunged or vacated convictions, and felony convictions if the cases are more than five years old.

Landlords could still deny an applicant with a felony conviction involving arson, racketeering, manufacturing methamphetamine and being on the sex offender registry. The ordinance would also protect prospective renters from denials over insufficient credit history, credit scores greater than 500 and eviction judgments more than three years old.

That same day, Safe and Affordable Neighborhoods Minneapolis, a campaign to push back against the draft ordinance, released a poll of 500 city residents showing 75% of them agreed property owners should be able to review a prospective tenant's financial, credit and criminal history. The campaign is run by the Minnesota Multi Housing Association, the statewide group that represents property owners.

Tenant screenings can also be another tool for housing discrimination against marginalized communities, particularly people of color, said Myron Orfield, director of the Institute on Metropolitan Opportunity at the University of Minnesota Law School.

"Sometimes landlords have these reports and they use them as a justification to not rent to a black tenant, but they'll have a report that says the exact same thing as a white tenant and they'll rent to that person," Orfield said.

Confusion and time spent disputing inaccurate information on a tenant screening report — such as evictions or criminal records that should have been expunged — is another concern.

Denied applicants are allowed to receive a copy of their tenant screening report and dispute issues with the screening company. The company has up to 30 days to investigate.

"It puts a lot of weight on the consumer or tenants to dispute reports, and a lot of tenants don't have the time to do that," Grundman said. "Their application has been denied and they're waiting for this investigation to be conducted. … There's no incentive for tenant screening organizations to get it right in the first place."

By the time the matter is resolved that apartment may be leased to someone else, he said.

From Buche's perspective, it's the applicants who don't follow through by notifying screening companies of errors.

She said the screening companies are often at the mercy of how recently agencies and courthouses update their databases. That's why Buche's company has court researchers who go to county courthouses and scour records to verify information. But not all tenant-screening companies do this, she said.

Tolliver, 21, points to a case of identity theft as part of her apartment hunting troubles. She found out while fighting for a juvenile record expungement that there was a warrant for her arrest — she was unaware police were looking for her.

Her situation could have been worse, but it "felt like a dark storm that was hanging over my head," she said.

In March, she finally found an apartment, in Brooklyn Park.