Portland might try to push landlords to be more forgiving of a potential tenant’s criminal history or credit dings through a set of new rental screening regulations.

The proposal, brought by Commissioner Chloe Eudaly and headed to the City Council next week, encourages landlords to use prescribed criteria that could double the number of renters getting approved compared with the industry standard.

If landlords chose not to follow the looser checks, they could do their typical tenant review but then would have to jump through some extra city hoops that add costs and processing time.

Beyond long-standing fair housing laws that bar discrimination against protected classes such as race, sex and familial status, few other U.S. cities have waded as far as this into how property owners may choose occupants for their housing.

Eudaly, who won her seat on a campaign that focused on tenant protections based on her own experience as a renter, has long sought to address screening criteria. She was set to bring forward a proposal in September but withdrew it for further development.

“It doesn’t solve all the problems,” said Jamey Duhamel, Eudaly’s policy director. “This is our best foot forward based on what we know: Housing is a basic need and a human right.”

Tenant activists say good renters increasingly bump up against barriers that keep them from finding a home, and the problem’s only gotten worse with the city’s recent rental housing shortage.

“Not a day goes by that we don’t hear from somebody who doesn’t make enough money to qualify or their credit’s not high enough, but of course their credit’s not high enough because they’re paying the rent first,” said Margot Black, an organizer for Portland Tenants United.

Landlords say the new rules will force some small operators out of the business, worsening the housing shortage. And the lower screening bar could put their properties or other tenants at risk, they say.

But Eudaly staffers say many common tenant screening principles — including criminal and credit history — actually have little bearing on whether renters pay rent on time or are ultimately evicted for bad behavior.

The proposal offers landlords two choices:

A “low-barrier” screening regimen that’s more forgiving of older criminal convictions or past credit issues;

or the landlord’s own screening but with new demands. The landlord would, for example, have to weigh “supplemental evidence” submitted by the prospective tenant, say participation in credit counseling. If landlords deny the application, they must outline the reason for denying the application, specifically addressing any supplemental evidence.

Regardless of screening technique, the ordinance would require all landlords to advertise vacancies 72 hours before they begin accepting applications and to evaluate applications in the order they’re received, both new requirements.

They also can’t require tenants to earn more than two times the monthly rent in income. Many landlords today require renters to make three times the monthly rent.

And it also restricts the extent to which landlords can dig into the criminal history of adult tenants who live in an apartment but aren’t responsible for paying rent. They can consider only one year of criminal and rental history.

The two-tiered proposal puts landlords in a tough situation, said Deborah Imse, the director of the landlords’ association Multifamily Northwest.

On the one hand, landlords can choose to use the city’s low-barrier criteria. That could mean accepting renters with criminal convictions including some sex offenses, arson or burglary.

“If you’re letting folks with those kinds of backgrounds into the property, you’re also putting the other 98 percent of residents that are in the property at risk,” Imse said.

Black, the tenant organizer, dismissed those concerns as fearmongering.

“The people who we know are more likely to reoffend in a way that poses a risk to the community still will not be in our apartment communities” under the policy, Black said.

The low-barrier screening would limit checks to felony convictions within the past 7 years and misdemeanors within the last 3 years. Renters wouldn’t be rejected for credit scores above 500, a court eviction order older than 3 years or insufficient credit history.

On the other hand, landlords can do their own assessment. But that could add costs for further background checks to review the supplemental evidence, for instance, and completing a required written notice describing why an applicant was denied, Imse said.

The written notice could introduce legal risks, she said.

“You’re going to have to have an attorney, because how you write that denial and how you provide it is not something that somebody is going to take a risk doing on their own,” she said.

Duhamel said the policy requires landlords to provide only a non-discriminatory business reason for an application denial and introduces no additional legal liability.

“It ultimately makes discrimination harder to achieve,” she said.

The low-barrier screening criteria’s timeline for the limits on criminal records were decided based on studies that showed recidivism declined after those periods of time, Duhamel said.

She also pointed to a later study of more than 10,000 households, funded by Minnesota affordable housing providers, that found criminal convictions were unlikely to predict evictions after two years for misdemeanors and five years for felonies.

Landlords who use the city’s low-barrier tenant screening could find twice as many applicants would be approved, an analysis completed for Eudaly’s office found.

Lisa Bates, an associate professor of urban studies and planning at Portland State University, ran a database of local renters culled from the OneApp rental application portal through the proposed screening criteria.

The experiment found that at least 70 percent of applicants would clear that level of scrutiny, compared with 39 percent that would be approved by an industry standard developed by the landlords’ membership association Multifamily Northwest.

That didn’t take into account income requirements, which vary based on the price of the rental.

The most common flags that accounted for the difference between the two screening approaches were credit scores, eviction history and criminal history, Duhamel said.

The proposal, if approved, would almost certainly face legal challenges.

The Seattle City Council in 2016 approved a first-come, first-served policy similar to part of Eudaly’s proposal. It was ultimately struck down under Washington state’s Constitution, with a judge’s finding that “choosing a tenant is a fundamental attribute of property ownership.”

Another Seattle law barring the use of arrest and conviction records altogether in tenant screening faces a court challenge.

A companion proposal going before the Portland City Council at the same time would restrict how landlords account for security deposits when the tenant moves out, and it would allow tenants to pay security deposits in installments over three months rather than entirely up front.

-- Elliot Njus

enjus@oregonian.com; 503-294-5034; @enjus

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