As a property manager, you're not just overseeing a building—you're providing real people with a place to live, raise their families, and come home to at the end of a long day. 

This responsibility comes with an important obligation: when someone meets your financial and background criteria, you must accept their application based on those standards alone. Fair housing laws exist to ensure additional demographic factors like race, gender, or religion aren't introduced into the process, keeping the playing field level for all qualified applicants.

"Fair housing laws were put in place to ensure that property managers, landlords, and sellers did not make housing decisions based on demographic differences," explains Sangeetha Raghunathan, General Counsel at Findigs. "If you as an individual have the income and meet the requirements with regards to financial ability to pay, which is really the most important thing, then you should have a chance to live in that house and you shouldn't be rejected because of socioeconomic or other conditions."

While following these laws, you still need to evaluate important factors like rental history and qualifying criminal convictions to maintain a stable community. This is where automated screening tools add enormous value. By applying the same criteria to every application, you can identify qualified tenants while reducing the risk of discrimination that might lead to violations. And fair housing violations carry serious consequences—HUD penalties range from $24,793 for first-time offenses to $123,965 for repeat violations, not including potential damages and legal fees.

When you let technology handle initial screening with clear guidelines, you create a process that protects both your renters and your business. This approach allows you to focus on filling more units with qualified applicants and building positive housing experiences for your community. 

Let’s take a closer look at the connection between screening automation and your ability to uphold fair housing laws within your company.

What is the Fair Housing Act?

The Fair Housing Act of 1968, passed in the wake of Martin Luther King Jr.'s assassination and representing a major part of his civil rights legacy, made it illegal to discriminate in housing transactions. The law specifically prohibits:

• Refusing to rent or sell housing based on protected characteristics
• Setting different terms, conditions, or privileges for different groups
• Making discriminatory statements or advertisements
• Falsely denying housing availability to members of protected groups
• "Steering" people toward or away from neighborhoods based on their characteristics

These protections ensure that housing decisions are based solely on relevant factors like ability to pay and rental history—not on who someone is or where they come from. The Act has been strengthened over the years to include additional protections, reflecting our growing understanding that fair access to housing is essential for building strong, diverse communities.

As Raghunathan points out: "Fair housing laws apply to individuals with disabilities who may need the assistance of a service animal or emotional support animal. It applies to military families and individuals who may be unexpectedly deployed and then often have challenges getting housing because property managers may not want to manage the attrition associated with that type of job."

A history of housing discrimination

Before the Fair Housing Act, housing discrimination was widespread and often legally sanctioned - a practice known as redlining. Black Americans were systematically excluded from many neighborhoods through various mechanisms.

Housing discrimination took many forms: restrictive covenants preventing property sales to minorities, redlining practices that denied mortgages in certain neighborhoods, and steering by real estate agents who would guide people to different areas based on their race.

These practices created extreme segregation in American cities. The dissimilarity index, which measures how evenly distributed two groups are across neighborhoods (with 0 representing complete integration and 100 representing complete segregation), stood at 78 for Black and white Americans. The isolation index, which measures the average percentage of same-group neighbors, was at 66 for Black Americans at the time of the Act’s passing.

Even after fair housing laws passed, enforcement remained weak, allowing discriminatory practices to continue in less visible ways.

How manual screening introduces risk

This history of segregation continues to impact housing today, with traditional tenant screening practices potentially perpetuating discrimination. Traditional tenant screening involves leasing agents reviewing applications, calling references, verifying employment, checking credit reports, and making judgment calls about applicants' suitability. Through this process:

• A leasing agent might scrutinize an applicant's documentation more closely based on their name or accent
• Agents might make different assumptions about temporary gaps in employment for different demographic groups
• Face-to-face interactions during the application process can trigger unconscious stereotypes

The subjective nature of these interactions creates opportunity for bias. When human judgment enters the equation, even well-intentioned property managers might inadvertently let personal perceptions affect their decisions. 

According to the 2024 Fair Housing Trends Report, rental-related housing discrimination complaints were the most prevalent of any complaint transaction type. In 2023, there were 28,343 complaints of discrimination in the rental market reported across all agencies, accounting for 83.38% of all transaction types reported.

The basis of automated screening

Automation can help you do right by your renters by ensuring qualification criteria are applied consistently across all applications. When implemented thoughtfully, this approach combines technology with necessary human involvement: 

1. Property managers establish clear qualification criteria (income requirements, credit thresholds, etc.)
2. These criteria are programmed into an automated system
3. When applicants submit information, the system evaluates it against these fixed criteria
4. The system generates consistent recommendations based purely on the established rules

Unlike traditional processes where individual leasing agents can make subjective decisions, automated screening technology can apply a "central process, localized knowledge" approach. While the core evaluation follows one unified system, the criteria smartly adapt to local regulations and market realities.

Property managers using this approach ensure fair application processing everywhere, recognizing important differences—Seattle's stricter screening laws require different parameters than Miami's more relaxed regulatory environment. And practically speaking, apartments in high-cost areas naturally need stronger financial qualifications than more affordable markets.

This combination of standardized evaluation with regional flexibility means property managers can eliminate inconsistent practices while still applying each market's specific requirements.

Why automation supports Fair Housing

Automated screening systems apply the same criteria consistently to every applicant, eliminating the potential for unconscious bias. 

Raghunathan highlights this benefit: "Automation is extremely beneficial because it runs all the applications that come in against the same rule set. We know that in every instance... everyone's evaluated against the same standard."

She continues with a crucial point about objectivity: "We don't have any sense of any demographic data when we do our automated screening. So I don't know that you're a female. I don't know that you’re a male. There's no human being looking and thinking, 'Oh, I think I'd rather have a woman here.' Automation makes you blind to those differences."

This approach mirrors successful anti-bias initiatives in other fields. Raghunathan references a well-known study of symphony orchestra auditions: "When they had people auditioning for these major orchestras, they put them behind a screen so you didn't know if they were male or female. And all of a sudden you have a ton more women cellists getting positions at orchestras. Automation allows you to be blind to the demographics that lend to subjectivity."

Automated screening systems offer several specific benefits for fair housing compliance:

• Consistent application of criteria: Every applicant is evaluated against identical standards, removing subjective judgment calls that might be influenced by protected characteristics.
• Documented decision trails: Automated systems create clear audit trails showing exactly why each applicant was approved or denied, making it easier to defend decisions if challenged.
• Focus on relevant factors only: By analyzing only the data points specifically allowed by fair housing laws, automated systems avoid considering prohibited factors.

Rule-based automation vs. ‘black box’ AI

Some property managers worry that technology-based screening might introduce new forms of bias. This concern is valid when considering certain types of artificial intelligence systems.

The key distinction is between transparent, rule-based automation and opaque AI systems. "We don't write an algorithm that makes any sort of recommendation or decision around a particular individual's application,” Raghunathan explains. “We're automating a rule set."

In other words, the system simply applies the exact rules that the property manager has established. "The tenant criteria is publicly available,” says Raghunathan. “If the property manager wants to see, we've got an activity log of all the steps that were taken."

This approach differs fundamentally from "black box" AI that might learn patterns from historical data that could inadvertently perpetuate past discrimination. When AI algorithms are trained on historical housing data, they can absorb and replicate existing patterns of discrimination—even without any intentional bias from developers. This "data-driven bias" occurs because the algorithm learns from past decisions that may have been influenced by discriminatory practices.

"It's critical to understand that we don't use historical housing data to train any models for decision-making," Raghunathan emphasizes. "We specifically avoid using data that could contain embedded biases from previous housing decisions. Instead, we simply automate the application of clear, consistent rules that property managers have explicitly approved."

Where humans add value

While automation helps remove bias from the screening process, it actually frees up property managers to focus on the human elements of leasing that matter most.

"One of the added values of our product is that we're getting rid of that huge overhead, that administrative burden, and freeing brain space to do these very human things,” says Raghunathan. “They're spending way less time looking at driver's licenses and being like, 'Is this a fake one?' That kind of stuff that tech can take care of is being taken care of for them, and they can just really focus on the community building aspect of leasing."

This approach supports the individualized assessment that many jurisdictions require as part of fair housing compliance. Individualized assessment means considering each applicant's specific circumstances beyond the standard screening criteria, particularly when reviewing factors like criminal history or past rental issues. 

Raghunathan points out that many states or jurisdictions require this personalized review, so automating the paperwork helps property managers meet their compliance obligations while giving them time to focus on the applicant as a person.

‘Getting more people into homes they love’

The best automated screening systems recognize that properties aren't just assets—they're places where people live. A fair, consistent process benefits both property managers and renters.

From the property manager's perspective, automation reduces vacancy by enabling more thorough but faster reviews. "The goal is to get more people into the home that they love," says Raghunathan. "Screening is a very paper-heavy process where you have to look at so many different reports and pieces of paper. Getting that filing work out of the way so that they can just focus on the person is really the goal here."

For renters, the process becomes more transparent and fair. Everyone is evaluated on the same criteria, and decisions are based on relevant factors rather than subjective impressions.

Fair review of complex applications

While consistent screening rules are essential, applicants' financial and living situations are anything but uniform. As Raghunathan notes, "Not everybody's a W2 worker. What if you're an Uber driver? Traditional screening might presume a white-collar professional who gets paid every two weeks on a schedule into a direct deposit. That's just not reality. And the people that are not in that reality are the ones that have the hardest time getting into housing."

Automated screening can help property managers navigate these complexities more effectively. For example, military veterans often use military ID rather than driver's licenses or passports, which can complicate verification processes. Other applicants might primarily receive income in cash, like restaurant workers who earn tips. Automated systems can be designed to account for these variations fairly.

Local regulations add further complexity. "Screening is so local that states all have different things that you can and can't review," Raghunathan explains. "In some jurisdictions, if someone didn't pay rent during the COVID-19 emergency, then you can't count that. Cities have said you can't penalize an applicant because they didn't pay rent during the pandemic."

With automation, these complex local regulations can be applied consistently and accurately. For example, some cities like Oakland have "ban the box" rules that prohibit checking criminal history until after making a conditional housing offer. 

"That's where this approach adds value," says Raghunathan. "When working with reputable data providers who understand local regulations, the screening process can respect jurisdiction-specific rules. For example, in a city like Oakland with 'ban the box' requirements, the criminal history check isn't accessed until the appropriate stage in the application process."

Building better communities

As fair housing enforcement continues to evolve, automated screening systems provide property managers with a powerful tool to stay compliant while making sound business decisions. By removing human bias from the screening process, these systems help fulfill the original promise of fair housing laws—that everyone, regardless of background, has equal access to housing opportunities they can afford.

Automation directs human judgment to where it counts most: building communities rather than processing paperwork. By embracing automated screening systems that focus on relevant criteria and apply them consistently, property managers can better protect themselves from fair housing complaints while creating more welcoming communities for all.Ready to see how automated screening can improve both compliance and efficiency in your properties? Findigs can help you create a fair, consistent tenant screening process while freeing up your time to connect with residents and provide the kind of housing experience that keeps units filled and tenants happy. Reach out today to learn more.