Thursday, January 23, 2020

Does this help or hurt Ex-Felons?

The city of Oakland recently voted unanimously to bar landlords from conducting background checks before renting to tenants.
Supporters say the measure will help ensure residents released from prison are able to reintegrate back into society, hold down a job and provide for their families, instead of adding to Oakland’s homeless population. But some landlord groups worry the measure will sacrifice residents’ safety.

Sure, in the short-run ex-felons will be on a more equal footing relative to law-abiding renters. But it is hard to imagine that, on average, they are not worse tenants. That they are more likely to be late with rent, cause faster depreciation of they property, and possibly make other tenants more uncomfortable. Landlords screen out these higher cost individuals with a criminal background check. The absence of the background check does not magically remove the expected costs.

This means landlords will seek out additional screening mechanisms (or law-abiding renters will provide more signals). An easy screen would be to require an even larger security deposit, something ex-felons might have a harder time scraping together. Another might be to more fully scrutinize prospective renters' social media accounts. Landlords might glean troubles with the law but also other behaviors they want to avoid (political or religious affiliation?).

Suppose these alternative screens and signals do not work as well as criminal background checks. This means that the cost to a landlord of doing business in Oakland just went up. Over the longer run, we would expect them to withhold some maintenance until the value of the property is more closely equated with the cost.  Also, with more ex-felons in Oakland, I expect the value of home ownership will fall.

See also, Screening on criminal background and credit history

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