HUD ISSUES NEW GUIDANCE ON FAIR HOUSING PROTECTIONS FOR PEOPLE WITH LIMITED ENGLISH PROFICIENCY

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today issued “Limited English Proficiency” (LEP) guidance that addresses how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. More than 25 million people in the United States do not communicate proficiently in English. Read the new limited English proficiency guidance here.

The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect. People with limited English proficiency are not a protected class under the Fair Housing Act. However, the Fair Housing Act prohibits discrimination on seven protected bases, including national origin, which is closely linked to the ability to communicate proficiently in English. 
Housing providers are therefore prohibited from using limited English proficiency selectively or as an excuse for intentional housing discrimination. The law also prohibits landlords from using limited English proficiency in a way that causes an unjustified discriminatory effect.

“Having a limited ability to speak English should never be a reason to be denied a home,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Every family that calls this nation home has the same rights when it comes to renting or buying a home, regardless of where they come from or language they speak.”

Nearly 9 percent of the U.S. population is limited in English proficiency. Approximately 16,350,000 (or 65 percent) of these individuals speak Spanish, while 1,660,000 (7 percent) speak Chinese, 850,000 (3 percent) speak Vietnamese, 620,000 (2 percent) speak Korean and 530,000 (2 percent) speak Tagalog. Housing decisions that are based on limited English proficiency may have a greater impact on these and other groups because of their nationality.
The guidance addresses how various legal approaches, such as discriminatory effects and disparate treatment, apply in Fair Housing Act cases in which a housing-related decision – such as a landlord’s refusal to rent or renew a lease – involves a person’s limited ability to speak, read, write, or understand English.

Discriminatory practices, for example, could include applying a language-related requirement to people of certain races or nationalities; posting advertisements that contain blanket statements, such as “all tenants must speak English;” or immediately turning away applicants who are not fluent in English. Targeting racial or national origin groups for scams related to housing also constitutes intentional discrimination.

A housing provider also violates the Fair Housing Act when the provider’s policies or practices have an unjustified discriminatory effect, even when the provider had not intended to discriminate. Determining whether a practice has a discriminatory effect involves a three-step legal evaluation of the statistical evidence of a discriminatory effect; whether the housing provider’s policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest; and, if so, whether there is a less discriminatory alternative policy or practice.

In addition to the new LEP guidance, which is limited to the Fair Housing Act, HUD published a “Notice of Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons” in 2007.

Single Family Rentals: What Does the Future Look Like?

In June, the NRHC and Green Street Advisors’ Advisory and Consulting Group together published an in-depth research paper packed with stats that illuminate the current market for home rentals and projections for the coming years. Their findings should be of interest (and quite encouraging) to people in the business of renting single family properties.
In short, a number of factors point to a bullish market for single family home rentals over the next five years, including the modest growth in supply of homes; strong demand due to demographics and the growing attractiveness of homes relative to apartments; and a greatly tightened lending environment that has made buying homes (vs. renting) more difficult for many.

Today, according to the report, around 13% of all occupied single family homes are rentals, constituting about 37% of the total residential rental market. That’s more than most people would guess, and testament to the strong role single family homes now play in housing renters. In fact, the ownership of rental homes could even become an asset class for institutional investors betting on large portfolios of homes – though today their portfolios still represent only around 1% of the total single family rental market, with the other 99% being owned by “Moms and Pops.”

Single family homes are still 11% below their peak values in 2006, while apartments are now priced 38% above the peak they reached in 2007. The report suggests that this leaves lots of room for a rise in home values vs. apartments, so the good news isn’t only about the strength of the rental market – it’s also about the potential value of the underlying assets, the homes themselves.

Growing Demand

The report posits household formation as the chief driver of housing demand, and goes on to estimate that 6.6 million households will be created over the next five years. Over half these households will rent, a percentage exceeding the historical norm; of these, around 1.5 million will choose single family homes – an increase of around 9% over the next five years.

Job creation is another demand driver for rental housing, and a post-recessionary job market that continues to improve should add around 156,000 jobs per year over the next five years if the report’s projections are correct.

Demographics figure into demand as well. People under 35 represent the most important renter base, and this base is expected to grow faster than the population as a whole over the next five years. These days, carrying lots of debt and finding it hard to come up with down payments, they’re likely to delay buying homes until later in life than ever. Until that time, they’ll remain in the renter pool.

Then too, there’s the fact that every demographic group has seen an increase in desire for homes over apartments, particularly those needing three or more rooms – a feature homes are much more likely to provide than apartments or townhomes. The large millennial generation will soon be creating families that need more room than many apartments can offer them.
Limited Supply

The economy has for over seven years now been absorbing the many foreclosed houses that came on the market as a result of the Great Recession. Where once they might have been rented at bargain prices, many have now been purchased out of the rental market, and the others are more highly valued than they were when empty houses were abundant.

At the same time, the building of single family homes has lagged far behind the development of new apartments, and virtually nobody today builds homes from scratch specifically as rentals.

The changing ratio of supply and demand has led to a favorable situation for owners of rental homes, leaving plenty of room for rent growth. The occupancy rate has been climbing since 2009, and is expected to rise even more quickly over the next five years, while apartment occupancy is already at historic highs and doesn’t leave as much room for growth.

The upshot of this eye-opening report is that it’s a good time to own single family rental properties, and it’s likely to get better – perhaps a lot better. Keep an eye on our blog to pick up tips on how to squeeze the most from your investments!
Source: “Single-Family Rental Primer,” June 6, 2016, Green Street Advisors in partnership with National Rental Home Council.

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