Image showing house keys is used to illustrate study on how landlords discriminate against tenants

How Do Landlords’ Screening Processes Discriminate Against Tenants?

Image of Eva Rosen and Philip Gaborden is shown

June 25, 2024

Most studies of discrimination in the rental market focus on the outcomes of landlord behavior—testing to discover how often landlords discriminate against a particular group of people, for example. However, less research has focused on what motivates landlords’ decisions and behavior. In a recent study titled Racial Discrimination in Housing: How Landlords Use Algorithms and Home Visits to Screen Tenants, 157 landlords from Baltimore, Maryland; Cleveland, Ohio; Dallas, Texas; and Washington, D.C. were interviewed to explore how different processes for screening tenants shed light on discrimination in the rental market.  

We spoke with authors Eva Rosen and Philip Garboden about their study, coauthored with Jennifer Cossyleon, to gain insights into their findings on racial discrimination from landlords’ perspectives. 

Here’s an edited version of our conversation: 

Your paper addresses how discrimination and biases are intersectional and play out in complex ways. Can you explain this and share what drew you to this question?

Eva: We started off by studying how landlords make decisions about who to rent to and what role they play more broadly in the low-end housing market. One thing that was quickly obvious is that, while landlords are business owners, they are also human beings. They are not always perfectly rational actors, and they do often act on biases and prejudicial beliefs, including racism. While we might think, in an abstract sense, that they’re just responding to market factors and making rational decisions for their businesses, they are also weighing other kinds of biases as they interact with tenants. 

To understand discrimination, we need to take landlords into account. A lot of the literature on landlords and discrimination has used audit studies to measure to what degree we see landlords, for example, choosing a white tenant over a Black tenant, assuming the two applicants are similar in all other respects. That’s an important form of discrimination that we measure and quantify, but there’s more to it than that. So, we asked other questions: What’s happening in markets that are segregated before tenants even arrive at the landlord’s door, and how do landlords decide between two tenants of color? What does race mean to them? How do they think about race in the context of making decisions about a tenant? How does race factor into their decision-making in contexts where all the applicants are the same race?

What's happening in markets that are segregated before tenants even arrive at the landlord’s door, and how do landlords decide between two tenants of color? What does race mean to them?

Your study found that landlords use two sets of tools to screen tenants, referred to as “algorithmic proxies” and “gut proxies.” Can you describe them, explain the differences, and comment on which kinds of landlords tend to use which?

Philip: Most landlords want to screen tenants in a way that identifies the most profitable tenant: Who’s going to stay in the unit the longest, pay rent reliably, or cause minimal wear and tear to the space? We found a strong difference between large, professionally managed properties and landlords with small portfolios. They operate their screening approaches differently in ways that have a complicated and interesting set of outcomes for tenants. 

Large professional property managers who manage onsite, for example, a 200-unit building, are structured and algorithmic about how they screen tenants. They put all the pieces of information about a tenant, such as credit score or income, into a computer that identifies which tenant is eligible or not. The property manager, in that case, doesn’t have a lot of authority to supersede that because the computer makes the determination. Indeed, if the manager did supersede the computer, they could be vulnerable to fair housing lawsuits. Large professional management companies do get evaluated for fair housing issues frequently, so they institute systems that are designed to prevent that. That’s the “algorithmic proxy.” You’re using these measurable and observable features of a tenant’s characteristics to try to predict their behavior in the future. 

Landlords with small portfolios operate differently. They feel that these observable measures, like credit score and whatnot, are useless. They don’t really differentiate, especially in the low-income market, between tenant behaviors, and they trust their own “gut” much more. So, they meet the tenants face-to-face. They have a conversation with them, look at how the tenant is dressed, how they comport themselves, how rapidly they return various application materials, or how they parent their children. These landlords use these hard-to-quantify approaches to determine whether they think the tenant is a reliable person. So, that’s what we call the “gut proxy.” It’s using subjective measures to determine the same outcome: Is this going to be a tenant that’s profitable to house down the line for that landlord?

Your study also found that both kinds of screening methods result in racial discrimination. Can you expand on this?

Philip: I think there are interesting ways in which both screening methods reproduce patterns of racial inequality in the country. Sometimes, it depends on how narrowly you define discrimination. If it’s based on this idea of, “I don’t like this particular racial group and so I’m not going to rent to them,” then that’s different than how we define it, which is: using approaches that exacerbate structural inequalities within society. Landlords are using observable features which are all predicated on a tenant’s lived experience. Tenants facing challenges with their housing also face challenges in the labor market. They’re less likely to have good credit, high levels of income, and so on. So, despite these objective measures and these technical tools—where the race of the tenant is blinded to these algorithms—the algorithms are more likely to reward tenants who have rarely experienced discrimination, hardship, and structural marginalization.

I think it’s easier to see why the “gut proxy” results in discrimination. Landlords have pre-existing beliefs about low-income minority and female tenants. Often, their gut is checking to what degree the tenant aligns with those stereotypes or how much they’re able to “perform respectability” beyond what that landlord sees. Again, tenants who can make the effort to perform characteristics that defy a landlord’s stereotypes are more likely to be housed. The amount of scrutiny that’s placed on women and tenants of color is much higher than the scrutiny of more advantaged demographics.

It seems that some landlords use algorithms to reduce bias and avoid violating fair housing laws. Were some aware that these methods can still be biased?

Eva: Maybe. Maybe not. I think avoiding bias is not the priority for most landlords. Their top concern for their business is paying their mortgages. 

We met some landlords who talked about wanting to reduce bias. It’s hard to know exactly how much of that is related to a true commitment and how much it is just a part of their business spiel, but that’s a different study to figure out exactly how deeply those beliefs run.

We talked to a few landlords who use specialized algorithms. When it came to the Housing Choice Voucher program, these landlords were creating algorithms, specifically to account for the fact that rent would be paid reliably and directly to the landlord. In those cases, we did find that reliable payment could reduce bias on the basis of race and gender, as these payments helped landlords to overcome some of the biases that they might otherwise have. The value of reliable rent coming from the voucher program was baked into that algorithm. But I think the landlords’ main concern here is getting their rent paid so that they can pay their mortgages.

Some landlords who use gut proxies to find a good tenant conduct home visits with potential renters. How prevalent is this across the country?

Philip: That’s a great question and, obviously, our data cannot make any claims of prevalence across the country. Our paper quantifies home visits within our random sample, but that’s the best we can do. This practice was much more common among small amateur landlords compared to property managers of professionally managed complexes, where they are less likely to implement home visits because of potential fair housing violations. Also, it’s a logistical burden to go out to do these visits.

The fact that landlords would go through and make the effort to make these home visits in places like Baltimore and Cleveland did surprise us. It was a sizable number of our sample. A key thing we learned here in our landlord research is that landlords, while they all share similar goals and utilize similar tools to achieve those goals, are going to be responding to market features and factors. When you look at housing and landlords in California versus Baltimore versus Chicago versus Washington D.C., we see so much heterogeneity. It did surprise us that home visits would be less common in other contexts.

Your study draws on interviews with landlords from cities with varied housing markets. How do these practices change in strong versus soft markets, or areas with varying degrees of racial segregation?

Eva: It’s challenging, in a qualitative research study like this, to tease out these different market factors. The four cities vary on some of these characteristics. Broadly speaking, we can say that in tighter housing markets, landlords have more choices about who they rent to and tenants have less choice. There are more opportunities for landlords in tighter housing markets to discriminate and to wait for the next application in their pile. Some of that might be based on bias, which is more prevalent among the smaller landlords than the larger landlords. The latter are much more likely to be submitted to a fair housing audit. 

We found that there were pockets and neighborhoods in each city that were more like neighborhoods in other cities than other neighborhoods in their own cities. For instance, the rental market in South Dallas, which is a neighborhood that has a high population of African American renters, is much like much of the city of Baltimore, which looked a lot like neighborhoods east of the river in D.C. There were other neighborhoods in D.C. with a lot of students and a lot of corporate housing that looked very much like other parts of Dallas. 

One of the things we ask is how markets vary across cities and how there are micro-markets within cities where landlords often specialize within certain types of neighborhoods. When you have neighborhoods that are already highly racially segregated and already have high poverty rates, landlords have a different set of strategies than they might be using in a more heterogeneous or more affluent neighborhood.

It is not reasonable to expect any private, for-profit landlords to utilize an affirmative screening tool that would help account for the structural disadvantages faced by low-income tenants of color. Which leads to the second stage question turning to: How can public policy create more equal treatment within the housing market?

Given what you have learned from your work on both proxies, are there better tools landlords could use to avoid racially discriminatory outcomes?

Philip: So, that’s a hard question. I think there’s two stages to the question. First, how do we avoid or minimize explicit discriminatory screening? And second, how do we avoid discriminatory outcomes of screening processes? For the first, let’s say there are three comparable tenants: one of whom is white, one of whom is Latino, one of whom is Black. Of the three, one is a woman. If those tenants have the same financial characteristics, there shouldn’t be a difference in who is able to find housing. For that kind of discrimination, I think some of the algorithmic approaches outperform the gut-level approaches. 

But I think our broader point for this paper is that none of these approaches have any ability to account for structural disadvantage in American society. It is not reasonable to expect any private, for-profit landlords to utilize an affirmative screening tool that would help account for the structural disadvantages faced by low-income tenants of color. Which leads to the second stage question turning to: How can public policy create more equal treatment within the housing market? It’s an imperfect solution, but it’s what we can hope to achieve in a reasonable time frame. 

Relevant to this is the degree to which having a housing voucher—within certain submarkets and contexts—can become this powerful incentive that pushes landlords to overlook the potential downfalls of both the algorithmic approach and the gut approach.

The algorithmic approach famously has these categorical exclusion problems. If you’ve ever been evicted, you can be excluded from huge portions of the housing market. If you have a voucher, then most landlords specializing in voucher housing will have very different screening criteria, like their credit. Why would they care about your credit when they know that most of the rent is coming directly from our government? Similarly, with the gut approach, landlords are going to scrutinize their tenants in less invasive ways if they know that the rent is guaranteed. So, the degree to which housing policy and the voucher program, with some reforms, can help mitigate the consequences of these screening techniques. I have a lot of optimism for that potential.

Eva: The other thing is that using income as a screening tool—which is not without discrimination given what we know about income in this country—is a slightly better metric to measure someone’s ability to pay rent than relying on something like credit score, which is going to have even more structural inequalities baked into it.

Expanding source of income discrimination legislation to a national level to avoid state level preemption is a necessary and yet insufficient step.

I read an article stating that 40 percent of those who receive a housing voucher in California get turned away by landlords or cannot find housing. What do you recommend to localities or housing authorities to ensure low-income tenants of color with vouchers are not turned away by landlords?

Philip: There’s a lot of energy around that question right now. I think, first and foremost, people who are otherwise qualified should not be rejected simply because they have a voucher. Expanding source of income discrimination legislation to a national level to avoid state level preemption is a necessary and yet insufficient step. Beyond that, thinking through how we can make the voucher program work better for landlords without removing the core protections that are inherent in that program around things like housing quality. A lot of that gets into this sort of unsexy world of implementation. The resources that we give public housing authorities to run the voucher program are woefully inadequate. So, if you don’t even have time to serve your clients, thinking about how you can serve landlords better seems like this incredible burden. However, there are ways that basic reforms around customer service and around expediting things like inspections and rent reasonableness can all make the voucher much more attractive. In addition, when combined with source of income legislation, you have landlords who are inherently less resistant and then legally required to take a voucher, you can make a dent on that 40 percent number of rejections that we’re seeing in a lot of contemporary studies.

If we want to make the rental experience a more positive, equitable, and affordable one for tenants, then we need to seriously consider the role that landlords play in this dynamic.

What additional research on this topic do you think would be valuable? What are your next steps?

Eva: We are currently working on a book manuscript about these different aspects of renting in the low-end housing market. The book tries to answer questions about housing discrimination, how landlords engage with the Housing Choice Voucher program, how landlords approach eviction and how they use eviction filings as a rent collection tool, and tenant management and how landlords interact with their tenants. One of the challenges with these questions that are so important for the rental experience in the United States, is that there has not been enough energy focused on bringing landlords into this conversation and including their opinions, views, biases, and needs. If we want to make the rental experience a more positive, equitable, and affordable one for tenants, then we need to seriously consider the role that landlords play in this dynamic. That’s what we’ve been writing about, as comprehensively as we can, in this new book called American Landlord.

How useful was this page?
This field is for validation purposes and should be left unchanged.

Leave a Reply

Stay Informed

Stay up to date on the latest research, events and news from the Local Housing Solutions team:

Sign up for LHS newsletter and register for a free My Account which allows you to save LHS resources and Housing Strategy Review Results: