As technology evolves, so too must our understanding of how it intersects with regulations. The U.S. Department of Housing and Urban Development (HUD) has recently issued guidance relevant to owners and agents. HUD provides this information specifically to those utilizing artificial intelligence (AI) in tenant screening and advertising.

HUD’s AI in Tenant Screening Guidance

The guidance addresses the application of the Fair Housing Act to the use of AI in two key areas:

1. Tenant Screening: Third-party screening companies increasingly use machine learning and AI to assist landlords in making rental decisions. While these technologies can streamline operations, you must apply them without violating anti-discrimination laws.
2. Advertising of Housing Opportunities: Online advertising platforms often use AI to target ads to specific groups. This guidance ensures that such targeting does not discriminate against protected classes.

Key Points for Owners and Agents

1. Fair Housing Act Compliance
   Both the tenant screening process and housing advertising must comply with the Fair Housing Act. The Act prohibits discrimination based on race, color, national origin, religion, sex, disability, and familial status.
2. Transparency and Accuracy in Screening
   HUD encourages landlords and screening agencies to develop transparent and accurate tenant screening processes. Ensure that any use of AI in tenant screening tools does not unfairly exclude potential tenants based on protected characteristics.
3. Targeted Advertising
   The guidance clarifies the responsibilities of housing advertisers and platforms. It emphasizes that ad targeting that leads to discriminatory outcomes violates federal law. For instance, showing an ad only to certain demographic groups could potentially be discriminatory.

Recommendations for Best Practices

Here’s a quick look at things you can do to remain compliant with Fair Housing laws. Read the tenant screening guidance here.

• Review AI Applications Regularly: Routinely review tenant screening or advertising that use AI tools for compliance with fair housing laws. This includes checking that the algorithms do not inadvertently discriminate based on protected characteristics.
• Educate and Train Staff: Train property managers and real estate agents on the implications of the Fair Housing Act as it relates to AI and digital advertising.
• Document Decisions: Maintain detailed records of how you make decisions, particularly when denying housing based on AI-driven tenant screenings. This documentation should clearly explain the reasons for any adverse action to ensure transparency and fairness.
• Engage with Technology Providers: Work closely with your technology providers to understand how their systems work. Ensure that they are aware of their obligations under the Fair Housing Act. Request transparency about how their algorithms function and how they address potential biases.

Read the guidance for use of online platforms here.

The intersection of AI and housing presents both opportunities and challenges. AI can improve efficiency and decision-making. However, it is crucial that its application does not undermine the rights protected under the Fair Housing Act. If you adhere to HUD’s new guidelines, you and advertisers can use technology responsibly, ensuring fair and equitable treatment for all.

For more insights and detailed analysis of HUD’s guidelines, visit HUD’s official website.