Attachment C
Analysis of Potential Fair Chance Housing Policy Consequences Note: As requested by City Council, staff prepared this Attachment containing staff analysis of potential Fair Chance Housing Ordinance implementation consequences, both intended and unintended. Accordingly, this Attachment reflects staff analysis to date with the acknowledgement that more information is forthcoming from public input and City Council discussion.
An intended consequence of adopting the draft Fair Chance Housing Ordinance (Attachment A) would be to have a codified, consistent, and clear policy regarding the use of criminal history information in housing decisions for all housing providers in Palo Alto. While it could not be directly measured, another intended consequence would be to reduce the potential for housing discrimination against renters with a criminal history. Pursuing renter protection policy work is consistent with the goals in the City’s 2030 Comprehensive Plan to provide adequate housing for all. Fair Chance Housing policy and other rental policy topics are considered a means to affirmatively further fair housing within Palo Alto, as well as a means by which to promote certainty, stability, and fairness in the rental market. Fair Chance Housing policy work is consistent with Program 6.6: Fair Housing in the 2023-2031 Housing Element.
Given the widespread accessibility of criminal history databases and AI renter screening tools, it is not possible to prevent landlords, or any person, from running a check on another person at any time. However, an intended consequence of adopting the draft Fair Chance Housing Ordinance (Attachment A) is to establish procedural protections, including those involving written communication, that would give applicants and existing renters the opportunity to pursue a private right of action if they believed they were an aggrieved person under the Ordinance.
One of the purposes of local Fair Chance Housing policies is to give persons with criminal history a fair opportunity to compete for rental housing, thus putting them in a better position to reintegrate into the community, obtain gainful employment, and access health and other services. Therefore, an intended consequence of adopting the draft Fair Chance Housing Ordinance (Attachment A) would be that local landlords would no longer be able to initially use criminal history checks as part of making a conditional housing offer. However, a criminal history check could be conducted after an offer is made in accordance with the procedures outlined in the Ordinance. Also, notably, the draft Ordinance would not require or prevent a landlord from running credit checks, income verification, or other standard procedures as part of initial applicant vetting.
From stakeholder interviews, staff learned that Palo Alto landlords often receive numerous applications for rental units. Both landlords and renters are motivated to secure rentals, which could lead to an expedited process. Under the draft Fair Chance Housing Ordinance (Attachment A), the Ordinance would not interfere with a landlord’s ability to collect applications. However, it would establish a code violation if a landlord ran a criminal history check before making a conditional offer to an applicant and receiving their consent. Under the draft Ordinance (Attachment A), landlords would still have the ability to decide who to make a conditional offer to amongst applicants. However, if that person had a criminal history, the draft Ordinance might add to the time it takes to rent individual rental units so that the landlord could follow the renter procedural protections. This also gives an applicant or renter with inaccuracies in their record the opportunity to present mitigating information. It is likely that some landlords already implement procedures as encouraged by California’s FEHA, so it is not anticipated that a local Ordinance would significantly increase the time it takes for those landlords to fill vacancies.
Currently, Palo Alto landlords and housing providers utilize their own policies regarding the use of criminal history information in rental housing decisions. The California Apartment Association (CAA) noted from their preliminary inquiries that some Palo Alto landlords decide not to run criminal history checks, whereas others do and generally tend to consider lookback periods between three (3) and five (5) years with others looking at longer time periods. Under the draft Fair Chance Housing Ordinance (Attachment A), a consequence could be the need for adjustments among landlords who currently use criminal history checks as part of their rental procedures, particularly regarding the length of lookback periods. There would be no adjustments needed for landlords that do not currently utilize criminal history checks or for landlords for which the draft Ordinance (Attachment A) would exempt.
Regarding the prevalence of persons with criminal history, the National Conference of State Legislatures (NCSL) states that approximately 77 million Americans, or one in every three adults, have a criminal record (which could be an arrest record, criminal charges, or a conviction).1.As a point of comparison, the Brennan Center for Justice cites a similar prevalence noting that the number of Americans with arrest records is similar to the number of persons that have a Bachelor’s Degree.2 In their May 2018 report, Californians for Safety and Justice estimated that eight million Californians, or nearly one in five Californians, were living with a past criminal conviction.3 California Policy Lab also used the estimate of eight (8) million Californians with criminal history in October 2024 as background in their report on automatic record relief in California, which over time could assist with reducing the number of people with records in 1 National Conference of State Legislatures (NCSL), Criminal Records and Reentry Toolkit, March 31, 2023, Accessed March 11, 2025: https://www.ncsl.org/civil-and-criminal-justice/criminal-records-and-reentry- toolkit#:~:text=Approximately%2077%20million%20Americans%2C%20or,housing%2C%20and%20higher%20educa tion%20opportunities.
2 Friedman, M., Brennan Center for Justice, Just Facts: As Many Americans Have Criminal Records as College Diplomas,
November 17, 2015, Accessed March 11, 2025: https://www.brennancenter.org/our-work/analysis-opinion/just- facts-many-americans-have-criminal-records-college-diplomas. 3 Californians for Safety and Justice, Repairing the Road to Redemption in California, May 2018, Accessed March 17, 2025: https://safeandjust.org/interactivereport/repairing-the-road-to-redemption-in- california/#:~:text=1%20in%205%20Californians%20(an,with%20an%20old%20criminal%20conviction; https://safeandjust.org/wp-content/uploads/CSJ_SecondChances-ONLINE-May14.pdf. criminal history databases. 4 An unintended consequence of adopting a Fair Chance Housing Ordinance could be a shift in perceptions of public safety, whether or not a shift is justified, given the already widespread prevalence of persons with criminal histories. While Ordinance consideration and potential adoption might bring attention to this topic, the draft Fair Chance Housing Ordinance (Attachment A) would include recordkeeping and confidentiality provisions to ensure that landlords maintain the confidentiality of obtained criminal history information to the maximum extent permitted by law.
Since Palo Alto began establishing policy regarding rental housing, some landlords have expressed concerns about maintaining the autonomy to make decisions they believe are best for their property and business. In the context of Fair Chance Housing policy, CAA noted from their preliminary inquiries that the ability to run criminal history checks served as indirect mitigation against potential future unit turnover at rental properties, particularly if other residents felt uncomfortable with a new renter. CAA framed this concern within the context of just cause eviction regulations, which limit the ability to terminate occupancy in the event of such issue. A potential unintended consequence of adopting the draft Fair Chance Housing Ordinance (Attachment A), could be the perception that landlords have less autonomy to make decisions affecting the stability of their property and business. However, the draft Ordinance provides a process by which all prospective renters would have a fair chance to compete for housing. Instead of prohibiting landlord consideration of criminal history altogether unless required by State or Federal law, the approach in the draft Ordinance would allow landlords to consider criminal history information with specific procedural protections for renters. This approach gives landlords the opportunity to decide if a directly related conviction warranted revoking of a conditional housing offer, balancing the interests of landlords while also reducing the potential for renter discrimination.
Landlords encounter a wide variety of regulations applicable to rental units. CAA highlighted that new local policies could complicate compliance for rental property owners and property managers, given the overall complexity of regulations at the State and local level. This complexity could also make it challenging for renters and/or their legal representatives to fully understand their rights. In response, the draft Fair Chance Housing Ordinance (Attachment A) includes a requirement for the City to publish and distribute a notice that informs renters of their rights under the Ordinance. That notice would be required to be provided alongside application materials and with leases. Additionally, the City contracts with Project Sentinel to provide renter and landlord education in fair housing, preparation of a renter’s rights guide, and a mediation program; Fair Chance Housing policy would be incorporated into these ongoing efforts. 4 Skog, Castellanos, Lacoe, and Pickard, California Policy Lab, Who Benefits from Automatic Record Relief in California?, October 2024, Accessed March 12, 2025: https://cdn.prod.website- files.com/6706c50505f0ff8dbeaf5682/67ca5375a6982860d5f1e809_Automatic-Record-Relief-in-California.pdf.