Excerpted from an NBC News article by Gretchen Morgenson
Two large private-equity-backed landlords discriminated against prospective tenants by relying on screening systems reporting inaccurate information about applicants’ previous evictions and criminal histories, according to two lawsuits filed November 20 by an Indianapolis housing nonprofit group. The lawsuits follow complaints by tenants and their advocates about the impact some private-equity-backed landlords have had on residents, including junk fees, reduced property maintenance and frequent evictions.
The new litigation centers on Tricon Residential, a California-based landlord recently acquired by the Blackstone Group of New York City, one of the country’s more prestigious private equity firms, and Progress Residential, a landlord owned by Pretium Partners.
The suits were brought by the Fair Housing Center of Central Indiana, an advocacy group serving residents of 24 counties in the state. Both Tricon and Progress denied tenant applications based on inaccurate information generated by a third-party screening service, the lawsuits say, and they allege that neither landlord verified the information.
“We have such low vacancy rates, coupled with rising housing costs and wages not keeping up, people are struggling to find new housing,” said Amy Nelson, executive director of the Fair Housing Center. “Any sort of barrier can be devastating, and we’ve been doing a lot of outreach to get the word out about tenants’ screening-based barriers.”
A spokesman for Tricon Residential said in a statement: “Tricon adheres to all Fair Housing laws and believes the allegations in this suit are baseless.” The events detailed in the lawsuit occurred before Blackstone purchased the company; a Blackstone spokesman declined to comment. A Progress Residential spokesman provided this statement: “As a leading professional property manager, we are committed to promoting a fair and equitable screening process for all applicants.”
The vast majority of landlords require applicants to undergo third-party background checks, according to a 2019 report from the National Consumer Law Center, a nonprofit organization that advocates for low-income people. But information in background checks can be inaccurate, raising unfair hurdles for renters, advocates say.
Private-equity-backed landlords have bought up large swaths of housing across the country in recent years, acquiring both single-family homes and apartment complexes. Such acquisitions have diminished the supply of affordable starter properties in many communities, research shows. Together, Tricon and Progress own at least 130,000 single-family homes throughout the country.
Both Progress and Tricon ban renters with criminal histories, the Indiana lawsuits contend. Progress denies applicants with felony convictions within the past 10 years, as well as convictions for certain felonies regardless of when they occurred and for certain misdemeanors within the past three years, one lawsuit says.
Federal prosecutors have also alleged that tenant screening checks can be discriminatory. A civil case filed last month in the Eastern District of Missouri alleged that landlords of an apartment complex in Kinloch banned tenants with certain criminal histories from late 2015 to January 2024, a practice the suit said discriminated against prospective Black tenants. Such criminal histories “are known to have significant statistical racial disparities,” the suit said.
The plaintiff in both lawsuits filed by the Indiana nonprofit group, Marckus Williams, tried to rent homes from both Tricon and Progress in November 2022, only to be turned down, he told NBC News. Williams’ convictions for cocaine possession in 2006 and 2012 had been expunged, but they appeared on his tenant screening reports, resulting in rejections from both landlords.
“I sent them my expungement records, but I kept getting denied,” Williams recalled in a phone interview. “It makes you feel bad about yourself. Just give me a chance.”
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