U.S. Attorney's Office Files Statement of Interest in Fair Housing Act Case Alleging Unlawful Algorithm-Based Tenant Screening Practices

BOSTON – Today the Justice Department filed a Statement of Interest to make clear that the Fair Housing Act (FHA) applies to residential screening companies that develop and sell algorithmic-based screening services to housing providers. The Statement of Interest, filed in federal court in Boston, also addresses the appropriate pleading standard for disparate impact claims under the FHA. The statement highlights the United States’ commitment to enforcing the FHA, including in cases involving algorithms and tenant screening software.

The Department’s statement is in response to motions to dismiss filed in Louis et al v. SafeRent et al. – a lawsuit filed in the District of Massachusetts in May 2022. The lawsuit was filed by plaintiffs Mary Louis and Monica Douglas, two Black rental applicants who use housing vouchers to pay part of their rent. Plaintiffs applied for rental housing but allege they were denied due to their “SafeRent Score,” a score derived from SafeRent’s algorithmic-based screening software. The Plaintiffs allege that SafeRent scores result in disparate impact against Black and Hispanic rental applicants because the underlying algorithm relies on certain factors that disproportionately disadvantage Black and Hispanic applicants, such as credit history and non-tenancy related debts, while failing to consider one highly relevant factor, the use of housing vouchers.

“Algorithms are written by people.  As such, they are susceptible to all of the biases, implicit or explicit, of the people that create them,” said United States Attorney Rachael S. Rollins. “As the housing industry and other professions adopt algorithms into their everyday decisions, there can be disparate impacts on certain protected communities. Stable and affordable housing provides a unique pathway to success, opportunity and safety. We must fiercely protect the rights and protections promulgated in the Fair Housing Act. Today’s filing recognizes that our 20th century civil rights laws apply to 21st century innovations.”

“Housing providers and tenant screening companies that use algorithms and data to screen tenants are not absolved from liability when their practices disproportionately deny people of color access to fair housing opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This filing demonstrates the Justice Department’s commitment to ensuring that the Fair Housing Act is appropriately applied in cases involving algorithms and tenant screening software.”

“Tenant screening policies are not exempt from the Fair Housing Act’s protections just because decisions are made by algorithm,” said Damon Smith, General Counsel for the United States Department of Housing and Urban Development. “Housing providers and tenant screening companies must ensure that all policies that exclude people from housing opportunities, whether based on algorithm or otherwise, do not have an unjustified disparate impact because of race, national origin or another protected characteristic.”   

Through the Statement of Interest, the Department seeks to assist the court by addressing two questions of law erroneously represented in the defendants’ motions to dismiss. First, the statement sets out the appropriate standard for pleading disparate impact claims under the FHA. Second, the statement clarifies that the FHA’s text and caselaw support the FHA’s application to companies providing residential screening services.

The Defendants in Louis et al v. SafeRent et al. have moved to have the case dismissed and Plaintiffs oppose defendants’ motions. The Justice Department’s Statement of Interest disagrees with the Defendants’ pleading standard for disparate impact claims and with SafeRent’s assertion that the FHA does not apply to companies like SafeRent. The motions to dismiss are now pending before the court.  

Assistant U.S. Attorney Gregory Dorchak of Rollins’ Civil Rights Unit and Trial Attorney Kinara Flagg of the Justice Department’s Civil Rights Division handled the matter.

The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit https://www.justice.gov/usao-ma/civil-rights