[Federal Register Volume 89, Number 70 (Wednesday, April 10, 2024)]
[Proposed Rules]
[Pages 25332-25375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06218]



[[Page 25331]]

Vol. 89

Wednesday,

No. 70

April 10, 2024

Part II





Department of Housing and Urban Development





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24 CFR Parts 5, 245, 882, et al.





Reducing Barriers to HUD-Assisted Housing; Proposed Rule

  Federal Register / Vol. 89 , No. 70 / Wednesday, April 10, 2024 / 
Proposed Rules  

[[Page 25332]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 245, 882, 960, 966, and 982

[Docket No. FR-6362-P-01]
RIN 2501-AE08


Reducing Barriers to HUD-Assisted Housing

AGENCY: Office of the Secretary, U.S. Department of Housing and Urban 
Development (HUD).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the regulations for certain HUD 
Public and Indian Housing and Housing Programs. The proposed amendments 
would revise existing regulations that govern admission for applicants 
with criminal records or a history of involvement with the criminal 
justice system and eviction or termination of assistance of persons on 
the basis of illegal drug use, drug-related criminal activity, or other 
criminal activity. The proposed revisions would require that prior to 
any discretionary denial or termination for criminal activity, PHAs and 
assisted housing owners take into consideration multiple sources of 
information, including but not limited to the recency and relevance of 
prior criminal activity. They are intended to minimize unnecessary 
exclusions from these programs while allowing providers to maintain the 
health, safety, and peaceful enjoyment of their residents, their 
staffs, and their communities. The proposed rule is intended to both 
clarify existing PHA and owner obligations and reduce the risk of 
violation of nondiscrimination laws.

DATES: Comments are due no later than June 10, 2024.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule. Communications must refer to the above docket number and 
title. There are two methods for submitting public comments. All 
submissions must refer to the above docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
http://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt by HUD, and enables HUD to make them immediately 
available to the public. Comments submitted electronically through the 
http://www.regulations.gov website can be viewed by other commenters 
and interested members of the public. Commenters should follow the 
instructions provided on that website to submit comments 
electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All comments and 
communications properly submitted to HUD will be available for public 
inspection and copying between 8 a.m. and 5 p.m. weekdays at the above 
address. Due to security measures at the HUD Headquarters building, an 
advance appointment to review the public comments must be scheduled by 
calling the Regulations Division at (202) 708-3055 (this is not a toll-
free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as from 
individuals with speech or communication disabilities. To learn more 
about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
    In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed 
rule may be found at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Danielle Bastarache, Deputy Assistant 
Secretary for Public Housing and Voucher Programs, Room 4204, U.S. 
Department of Housing and Urban Development, 451 Seventh Street SW, 
Washington, DC 20410; telephone (202) 402-1380 (this is not a toll-free 
number) for the Public Housing and Section 8 programs. Ethan Handelman, 
Deputy Assistant Secretary for Multifamily Housing, Room 6106, U.S. 
Department of Housing and Urban Development, 451 Seventh Street SW, 
Washington, DC 20410; telephone (202) 402-2495 (this is not a toll-free 
number) for Multifamily Housing programs. HUD welcomes and is prepared 
to receive calls from individuals who are deaf or hard of hearing, as 
well as individuals with speech or communication disabilities. To learn 
more about how to make an accessible telephone call, please visit 
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

    Everyone deserves to be considered as the individual they are, and 
everyone needs a safe and affordable place to live. For people with 
criminal records, having a stable place to live is critical to 
rebuilding a productive life. Yet too many people who apply for housing 
opportunities are not given full consideration as individuals, but 
instead are denied opportunities simply because they have a criminal 
record. Criminal records are often incomplete or inaccurate, and 
criminal conduct that occurred years ago may not be indicative of a 
person's current fitness as a tenant. These unnecessary exclusions 
disproportionately harm Black and Brown people, Native Americans, other 
people of color, people with disabilities, and other historically 
marginalized and underserved communities. In April 2016, HUD issued 
guidance to all housing providers cautioning that unnecessary and 
unwarranted exclusions based on criminal records may create a risk of 
Fair Housing Act liability because they can have an unjustified 
disparate impact based on race.\1\ That guidance advised housing 
providers that individualized assessments that take into account 
relevant mitigating information are likely to have a less 
discriminatory effect than categorical exclusions based on criminal 
record.
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    \1\ Application of Fair Housing Act Standards to the Use of 
Criminal Records by Providers of Housing and Real Estate-Related 
Transactions (April 4, 2016), available at https://www.hud.gov/sites/documents/HUD_OGCGUIDAPPFHASTANDCR.PDF.
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    Yet too often, people still are being excluded from HUD-assisted 
housing for convictions that do not reflect at all on current fitness 
for tenancy, such as stale convictions that date back more than a 
quarter century, or those for low-level nonviolent offenses, such as 
riding a subway without paying a fare. Such exclusions do little to 
further legitimate interests such as safety, as mounting evidence shows 
and an increasing number of housing providers and public housing 
agencies (PHAs) now recognize.
    This proposed rule would help standardize practices within HUD 
programs with respect to prospective tenants. It would provide clearer, 
common-sense rules and standards to help HUD-subsidized housing 
providers and PHAs carry out the legitimate and important ends of 
maintaining the safety

[[Page 25333]]

of their properties and the surrounding communities and following 
federal law (which requires exclusion from HUD-assisted housing of 
people who are engaged in certain conduct or have certain criminal 
history), but without engaging in overbroad or discriminatory denials 
of housing. This proposed rule would establish in HUD program 
regulations a set of practices that already are required of housing 
providers under state and local law in much of the country; that are 
consistent with guidance HUD has provided to all housing providers to 
comply with the Fair Housing Act and to HUD-subsidized providers and 
PHAs to comply with program rules; and that, as HUD has heard from its 
industry partners, are already being used and work in practice to 
effectively balance various equities. In doing so, the proposed rule 
would clarify a legal landscape that many HUD-subsidized housing 
providers and PHAs find confusing, leading to divergent practices 
within HUD programs. While existing HUD regulations generally permit a 
fact-specific, individualized assessment approach, they have not been 
updated to clearly require it.
    This proposed rule would cover various HUD programs, including 
public housing and Section 8 assisted housing programs, as well as the 
Section 221(d)(3) below market interest rate (BMIR) program, the 
Section 202 program for the elderly, the Section 811 program for 
persons with disabilities, and the Section 236 interest reduction 
payment program, and in doing so would amend existing programmatic 
regulations. A summary of some of the ways in which these changes would 
impact different program rules are explained below:
    Clarifying what counts as relevant criminal activity and how 
recently it must have occurred: Existing regulations permit an assisted 
owner or PHA (for voucher applicants) to prohibit admission when the 
household has engaged in, ``in a reasonable time prior to admission,'' 
(1) drug-related criminal activity; (2) violent criminal activity; (3) 
other criminal activity that would threaten the health, safety, or 
right to peaceful enjoyment of the premises of other residents; or (4) 
other criminal activity that would threaten the health or safety of the 
PHA or owner or any employee, contractor, subcontractor or agent of the 
PHA or owner. While public housing regulations do not have a similar 
``reasonable time prior to admission'' qualifier, there is a 
``relevancy'' qualifier preceding these same four substantive 
categories of criminal activity. Under the proposed rule, PHAs and 
assisted owners would still be able to deny admission for these four 
categories of criminal activity; however, the proposed rule would 
clarify that assisted owners and PHAs may not deny admission for 
categories of criminal activity beyond those which are specified in the 
regulations. The proposed rule would require the establishment of a 
``lookback period'' limiting the reliance on old convictions and would 
provide, for all programs, that prohibiting admission for a period of 
time longer than three years following any particular criminal activity 
is ``presumptively unreasonable.'' The general rule would be that PHAs 
and assisted owners cannot make decisions based on criminal history 
that research indicates is not predictive of future criminal activity; 
that is irrelevant to safety, health, or fitness for tenancy; or that 
is based on incomplete or unreliable evidence of criminal activity 
(e.g., a record for an arrest that has not resulted in a conviction).
    Specifying procedural requirements before denying admission: At 
present, program regulations require PHAs and assisted owners to follow 
various procedural steps before denying admission based on a criminal 
record but do not provide important specifics. For example, PHAs and 
assisted owners must notify the household of the proposed denial, 
supply a copy of a criminal record, and provide an opportunity to 
dispute the accuracy and relevancy of the record before denial of 
admission. However, the current regulations do not specify how much 
notice a household must receive or the meaning of the opportunity to 
dispute the accuracy and relevancy of the record prior to a denial of 
admission. The proposed rule would clarify that tenants shall be given 
at least 15 days to challenge the accuracy and relevance of the 
information and to provide any relevant mitigating information prior to 
an admissions decision.
    Requiring a fact-specific and individualized assessment before 
making a discretionary decision to deny tenancy or admission based on 
criminal history: Current program regulations note that PHAs and 
assisted owners ``may consider'' certain circumstances prior to making 
a discretionary denial of admission or termination decision, and the 
different program regulations provide incomplete and inconsistent lists 
of appropriate considerations.\2\ HUD is proposing amended language 
that would make clear that for all discretionary admission and 
termination determinations, PHAs and assisted owners must consider 
relevant mitigating circumstances. With respect to admissions 
decisions, the proposed rule would require a fact-specific and 
individualized assessment of the applicant, adopting a term and concept 
that is familiar in the industry but has not previously been required 
in HUD programs. The proposed rule would harmonize the non-exhaustive 
list of relevant considerations across programs, setting out some 
specific factors that will frequently be considered relevant, such as 
how long ago the offense or incident occurred, mitigating conduct that 
has taken place since (e.g., evidence of rehabilitation and successful 
reentry, including employment and tenancy), and completion of drug or 
alcohol treatment programs. So long as housing providers consider the 
circumstances relevant to the decision, the ultimate decision as to 
whether to deny tenancy or admission would remain within their 
discretion.
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    \2\ See 24 CFR 5.852(a), 966.4(l)(5)(vii)(B), and 
982.552(c)(2)(i) and (iii).
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    Revising and making available tenant selection plans and PHA 
administrative plans: Under existing rules, owners participating in 
certain assisted housing programs must have a written tenant selection 
plan. The proposed rule would require these owners to update their 
tenant selection plans to reflect the relevant policies they employ 
within six months following this rule's effective date. The proposed 
rule would also require PHAs and owners to make PHA administrative 
plans and tenant selection policies more widely available.
    Providing additional guidance for PHAs and owners conducting 
screenings: When PHAs access criminal records from law enforcement 
agencies, existing regulations require PHAs to obtain consent from 
families before accessing their criminal records, require them to be 
kept confidential, and permit disclosure under limited circumstances. 
The proposed rule would broaden these protections to be applicable to 
all criminal record searches conducted by PHAs, as well as to assisted 
owners where appropriate. The proposed rule also would specify that, 
except in circumstances where housing providers and PHAs rely 
exclusively on an applicant's self-disclosure of a criminal record, 
they may not bar admission for failure to disclose a criminal record 
unless that criminal record would have been material to the decision.
    Clarifying mandatory admission denial standards: Language 
concerning mandatory admission denials based on criminal activity and 
alcohol abuse which are required by federal statute is largely left 
unchanged by the proposed

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rule. For example, the requirement that an assisted owner or PHA 
prohibit admission of individuals ``if any household member has been 
evicted from federally assisted housing for drug-related criminal 
activity'' in the last three years unless the ``the circumstances 
leading to the eviction no longer exist'' has not been modified.\3\ Nor 
have any modifications been made to the prohibition on admission to 
HUD-assisted housing to those who are ``subject to a lifetime 
registration requirement under a State sex offender registration 
program.'' The requirement that assisted owners or PHAs must establish 
standards to prohibit admission of individuals ``currently engaged in'' 
illegal use of a drug and in situations where individuals' pattern of 
illegal drug use or alcohol abuse may interfere ``with the health, 
safety, or right to peaceful enjoyment of the premises by other 
resident[s]'' would remain substantively unchanged.
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    \3\ HUD is proposing an amendment to these provisions which 
would clarify that current participation in a substance use 
treatment program may constitute a changed circumstance allowing for 
waiver of this 3-year-bar. This amendment and other proposed changes 
are explained in more detail later in this proposed rule.
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    However, HUD proposes adding greater clarification to the 
definition of ``currently engaging in,'' which as described above 
triggers a mandatory exclusion with respect to the use of illegal drugs 
and triggers discretionary exclusion authority with respect to certain 
criminal activity. The existing regulations provide only that currently 
engaging in ``means that the individual has engaged in the behavior 
recently enough to justify a reasonable belief that the individual's 
behavior is current.'' The proposed rule would provide that a PHA or 
assisted owner may not rely solely on criminal activity that occurred 
12 months ago or longer to establish that behavior is ``current.'' The 
proposed rule would also require that any such determination be based 
on a preponderance of the evidence standard and that such a 
determination take into account mitigating evidence, for example that 
the individual has successfully completed substance use treatment 
services.
    Specifying standards of proof in admissions and terminations 
decisions based on criminal activity: Existing regulations are largely 
silent on the standards of proof that must be met for admissions and 
terminations decisions based on criminal activity. Where they speak to 
the subject at all, they state broadly that an assisted owner or PHA 
may terminate a tenancy when a household member engaged in certain 
criminal activity, regardless of whether they have been arrested or 
convicted for such activity, and without satisfying the heightened 
standard of proof necessary to support a criminal conviction. There is 
no similar provision in existing regulations regarding admission 
decisions; nor do existing rules specifically discuss how PHAs and 
assisted owners may or may not consider arrest records in making either 
admissions or termination determinations. The proposed rule would (1) 
prohibit the consideration of arrest records standing alone (in the 
absence of other reliable evidence of criminal conduct) for any 
exclusion from housing; and (2) provide that criminal conduct or any 
other finding on which such an exclusionary decision is made must be 
based on a preponderance of the evidence. This would establish and 
clarify certain evidentiary standards and requirements for making key 
determinations in a manner that is largely consistent with what HUD 
already recommends in guidance for its housing providers and PHAs.
    Implementing limited changes affecting owners accepting Housing 
Choice Vouchers (HCVs) and Project Based Vouchers (PBVs): Most of the 
changes in the proposed rule would not apply to owners who participate 
in the HCV or PBV programs. The proposed rule would not apply most of 
the changes to owners who participate in the HCV or PBV programs, in 
order to avoid discouraging owner participation. Those owners who 
participate in the HCV or PBV programs would still be able to screen 
for drug-related criminal activity and other criminal activity that is 
a threat to the health, safety or property of others. The proposed rule 
would add language to clarify that this includes ``violent'' criminal 
activity and that owners in the HCV and PBV program must also conduct 
any screening consistent with the Fair Housing Act, which was not 
previously spelled out in program regulations. Additionally, for 
terminations of tenancy, HUD proposes the same standards regarding 
preponderance of evidence and arrest records as would apply for PHAs 
and assisted owners. Finally, existing regulations note that owners 
``may consider'' certain mitigating circumstances when terminating a 
tenancy. HUD proposes that, where a termination is based on criminal 
activity, illegal drug use, or alcohol abuse, an owner may consider an 
updated set of circumstances--the same circumstances, including 
mitigating and contextualizing evidence, that that PHAs and assisted 
owners would be required to consider in the context of admissions and 
termination decisions.
    Collectively, the principles embodied by this proposed rule are 
meant to ensure that people are considered as individuals in HUD-
assisted housing. Requiring housing providers and PHAs to make fact-
specific determinations based on the totality of the circumstances, 
rather than denying opportunities based solely on criminal history, 
would help ensure that stale, inaccurate, and/or incomplete evidence 
and stigma surrounding people with criminal justice system involvement 
do not create unnecessary and counterproductive barriers to safe and 
affordable housing. Research shows that expanding access to such 
housing reduces the risk of future criminal justice system involvement 
and, in doing so, strengthens public safety. To be sure, that does not 
mean that everyone with a criminal history will satisfy legitimate 
tenant screening criteria that apply to all applicants equally. Housing 
providers would retain the authority to screen out individuals who they 
determine, based on consideration of relevant information, pose a 
threat to the health and safety of other tenants. What the proposed 
rule would bar is the categorical, blanket exclusion of people with 
criminal records without regard to all relevant and contextualizing 
evidence and consideration of the full life someone has lived.

II. Background

A. Statutory Authority for This Rulemaking

1. HUD's General Statutory Authority To Promulgate Regulations
    Federal agencies derive their authority to regulate from Congress. 
Such authority may be provided through a specific law or from an 
agency's organic statute. HUD's authority to issue regulations, section 
7(d) of HUD's organic statute, the Department of Housing and Urban 
Development Act, provides: The Secretary may delegate any of his or her 
functions, powers, and duties to such officers and employees of the 
Department as he or she may designate, may authorize such successive 
redelegations of such functions, powers, and duties as he or she may 
deem desirable, and may make such rules and regulations as may be 
necessary to carry

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out his or her functions, powers, and duties.\4\
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    \4\ 42 U.S.C. 3535(d). HUD relied, inter alia, on this authority 
in promulgating the 2001 rulemaking that implemented QHWRA. See 66 
FR 28792.
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2. HUD's Specific Statutory Authority Relevant to This Rulemaking
a. HUD's Authority To Establish Criteria for Selection of Tenants, 
Occupancy, and Lease Provisions
    In 1992, Congress enacted section 13603 of the Housing and 
Community Development Act (HCDA). (Oct. 28, 1992, Pub. L. 102-550, 
Title VI, Subtitle C, 643, 106 Stat. 3821). Section 13603 sets forth 
the authority and standards by which HUD may enact rules to establish 
criteria for occupancy and provides that the Secretary shall promulgate 
regulations that establish criteria for selection of tenants and lease 
provisions in federally assisted housing. The Act requires that ``the 
criteria provide sufficient guidance to owners and managers of 
federally assisted housing to enable them to (A) select tenants capable 
of complying with reasonable lease terms, (B) utilize leases 
prohibiting behavior which endangers the health or safety of others or 
violates the right of other tenants to peaceful enjoyment of the 
premises, (C) comply with legal requirements to make reasonable 
accommodations for persons with disabilities, and (D) comply with civil 
rights laws.'' \5\
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    \5\ 42 U.S.C. 13603(b).
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b. HUD's Authority To Mandate Lease Terms and Conditions
    The United States Housing Act of 1937 (42 U.S.C. 1437a, et seq.) 
(``USHA'' or ``the 1937 Act'') provides HUD with authority to include 
language in contracts with PHAs that require PHAs (and owners) to add 
specific requirements in lease agreements for federally assisted 
housing (e.g., 42 U.S.C. 1437d(l), 42 U.S.C. 1437f(d)(o)(6)).
c. HUD's Authority To Establish Evidentiary Standards for Applicants 
Previously Denied Admission Based on Criminal Activity
    The Quality Housing and Work Responsibility Act of 1998 (Pub. L. 
105-276, approved Oct. 21, 1998, 112 Stat. 2634-2643) (``QHWRA'') 
provides that for applicants who have been previously denied admission 
for criminal activity, PHAs or owners may impose a requirement that 
such applicants provide ``evidence sufficient'' to show that they have 
not engaged in that criminal activity within a ``reasonable period'' of 
time. The statute explicitly outlines that ``the [HUD] Secretary shall 
by regulation provide'' to PHAs what ``evidence is sufficient.'' 42 
U.S.C. 13661(c)(2).
d. HUD's Authority To Make Rules To Carry Out the Fair Housing Act and 
Other Civil Rights Laws
    As noted above, the proposed rule is also an effort to advance 
compliance with nondiscrimination statutes directed at housing and 
programs and activities receiving federal financial assistance. The 
Fair Housing Act of 1968 (42 U.S.C. 3601, et seq.) provides that ``the 
Secretary [of HUD] may make rules (including rules for the collection, 
maintenance, and analysis of appropriate data) to carry out this 
subchapter [Fair Housing Act]. The Secretary shall give public notice 
and opportunity for comment with respect to all rules made under this 
section.'' 42 U.S.C. 3614(a).
3. Statutory History With Regard to Criminal History
a. U.S. Housing Act of 1937 \6\
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    \6\ As discussed more fully below, the USHA (or the 1937 Act) 
has been amended on several occasions with respect to criminal 
history, including by the Anti-Drug Abuse Act of 1988; the 1990 
National Affordable Housing Act amendments; the Housing Opportunity 
Program Extension Act of 1996; and the Quality Housing and Work 
Responsibility Act of 1998.
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    Section 1437d(l)(6) of title 42, United States Code, applicable to 
public housing, requires that PHA leases include a provision stating 
that any member of a tenant's household may be evicted for drug-related 
or certain other criminal activity.\7\ This section was originally 
enacted in the Anti-Drug Abuse Act of 1988 (102 Stat. 4181), and was 
retained in the 1990 National Affordable Housing Act amendments, which 
redefined the classes of criminal activity to which this prohibition 
applies (Pub. L. 101-625, section 504, amending section 6(1)(5) of the 
U.S. Housing Act).
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    \7\ ``Each public housing agency shall utilize leases which . . 
. (6) provide that any criminal activity that threatens the health, 
safety, or right to peaceful enjoyment of the premises by other 
tenants or any drug-related criminal activity on or off such 
premises, engaged in by a public housing tenant, any member of the 
tenant's household, or any guest or other person under the tenant's 
control, shall be cause for termination of tenancy . .''.
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    With respect to Section 8 housing leases, the USHA contains 
language similar to 1437d(l)(6). See, e.g., 42 U.S.C. 
1437f(d)(1)(B)(iii), which applies to both project-based and tenant-
based section 8.\8\ See also section 1437f(o)(7)(D), which applies to 
tenant-based and project-based voucher assistance specifically and 
mandates virtually identical language in all housing assistance 
payments contracts between a PHA and an owner.\9\ Additionally, section 
1437f(o)(6)(C) allows a PHA to elect not to enter into a Housing 
Assistance Payments contract with an owner who, among other things, 
``[R]efuses, or has a history of refusing, to take action to terminate 
tenancy for activity engaged in by the tenant, any member of the 
tenant's household, any guest, or any other person under the control of 
any member of the household that (i) threatens the health or safety of, 
or right to peaceful enjoyment of the premises by, other tenants or 
employees of the public housing agency, owner, or other manager of the 
housing; (ii) threatens the health or safety of, or right to peaceful 
enjoyment of the residences by, persons residing in the immediate 
vicinity of the premises; or (iii) is drug-related or violent criminal 
activity.''
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    \8\ ``[D]uring the term of the lease, any criminal activity that 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other tenants, any criminal activity that threatens the 
health, safety, or right to peaceful enjoyment of their residences 
by persons residing in the immediate vicinity of the premises, or 
any drug-related criminal activity on or near such premises, engaged 
in by a tenant of any unit, any member of the tenant's household, or 
any guest or other person under the tenant's control, shall be cause 
for termination of tenancy . . .''
    \9\ ``[D]uring the term of the lease, any criminal activity that 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other tenants, any criminal activity that threatens the 
health, safety, or right to peaceful enjoyment of their residences 
by persons residing in the immediate vicinity of the premises, or 
any violent or drug-related criminal activity on or near such 
premises, engaged in by a tenant of any unit, any member of the 
tenant's household, or any guest or other person under the tenant's 
control, shall be cause for termination of tenancy . . .''
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b. Housing Opportunity Program Extension Act
    In 1996, the Housing Opportunity Program Extension Act (Pub. L. 
104-120, 110 Stat. 834-846, approved March 28, 1996) (``the Extension 
Act'') amended the United States Housing Act. The Extension Act made an 
individual who has been evicted from public housing or any Section 8 
program for drug-related criminal activity ineligible for admission to 
public housing and the Section 8 programs for a three-year period, 
beginning from the date of eviction, unless the individual who engaged 
in the activity has successfully completed a rehabilitation program 
approved by the PHA or if the PHA determines that the circumstances 
leading to the eviction no longer exist.
    The Extension Act also required PHAs to establish standards that 
prohibit occupancy in any public housing unit or participation in a 
Section 8 tenant-based program by any person the PHA

[[Page 25336]]

determines to be using a controlled substance, or whose pattern of 
illegal use of a controlled substance or pattern of alcohol abuse would 
interfere with the health, safety, or right to peaceful enjoyment of 
the premises by other residents of the development. The Extension Act 
states that in determining whether a person's use of a controlled 
substance or pattern of alcohol abuse may interfere with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents of the development, the PHA administering the program may 
consider whether an applicant has been rehabilitated from drug or 
alcohol abuse. In addition, the Extension Act provides PHAs the 
opportunity to access criminal conviction records from law enforcement 
agencies for public housing applicants and residents. It also requires 
that the public housing agency provide the tenant or applicant with a 
copy of the criminal record and an opportunity to dispute the accuracy 
and relevance of that record before an adverse action is taken on the 
basis of that criminal record.
c. Quality Housing and Work Responsibility Act of 1998
    In 1998, Sections 575-579 of the Quality Housing and Work 
Responsibility Act (Pub. L. 105-276, approved Oct. 21, 1998, 112 Stat. 
2634-2643) (QHWRA) revised sections 6 and 16 of the 1937 Act and 
created statutory authority to expand the drug abuse and criminal 
activity requirements already applicable to public housing to most 
federally assisted housing. Sections 42 U.S.C. 13661-63 apply to all 
federally assisted housing; they contain provisions applicable to 
illegal drug use, alcohol abuse, individuals who are subject to a 
lifetime registration requirement under a State sex offender 
registration program, and other criminal activity.
    QHWRA expanded the prohibition on admitting families for three 
years because of eviction from public housing or Section 8 units for 
drug-related criminal activity to cover admissions to (and evictions 
from) Section 202, Section 811, Section 221(d)(3) BMIR, Section 236, 
and Section 514/515 rural housing projects. In addition, QHWRA (section 
578(a)) added the obligation for project owners--including PHAs that 
administer public housing--to deny admission to sex offenders who are 
subject to a lifetime registration requirement under a State sex 
offender registration program.
d. Related Rulemaking
    HUD issued a variety of guidance on implementing the Extension Act 
(PIH Notice 96-16, issued April 12, 1996, and PIH Notice 96-27, issued 
May 15, 1996) and published proposed rules for the Section 8 tenant-
based and moderate rehabilitation programs on March 31, 1997 (62 FR 
15346) and for the public housing program on May 9, 1997 (62 FR 25728).
    Because of the timing of the 1998 Act and the related nature of its 
drug abuse and criminal activity requirements, HUD published a proposed 
rule (64 FR 40262; July 23, 1999) on the provisions as they existed 
after the revision to the drug abuse and criminal activity requirements 
made by QHWRA, rather than issuing a final rule on the admission and 
eviction provisions of the earlier Extension Act.\10\ HUD published its 
Final Rule implementing the relevant provisions of both the Extension 
Act and QHWRA on May 24, 2001.\11\
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    \10\ The FY 1999 appropriations act (section 428 of Pub. L. 105-
276, 112 Stat. 2511) added a new paragraph (f) to section 16 of the 
1937 Act to bar persons convicted of manufacturing or producing 
methamphetamine on the premises of federally-assisted housing from 
public housing and Section 8-assisted housing where the PHA 
determines who is admitted.
    \11\ Screening and Eviction for Drug Abuse and Other Criminal 
Activity (66 FR 28775; May 24, 2001). An additional relevant 
provision was added to the 1937 Act by the Personal Responsibility 
and Work Opportunity Act of 1996 (Pub. L. 104-193, approved August 
22, 1996; 110 Stat. 2105, 2348). Section 903 of that Act amended the 
1937 Act (42 U.S.C. 1437f(d)(1) and 1437d(l)) to add as grounds for 
termination of tenancy in the public housing and Section 8 
assistance programs fleeing to avoid prosecution, or custody or 
confinement after conviction, for a felony (or a high misdemeanor in 
New Jersey). Violating a condition of probation or parole imposed 
under Federal or State law is also grounds for termination of 
tenancy under that provision. That provision also created the 
obligation (in a new section 27 of the 1937 Act) for PHAs to provide 
Federal, State or local law enforcement officials with information 
concerning assisted recipients whom the officials are pursuing for 
violating parole or fleeing to avoid prosecution. These provisions 
are not affected by this proposed rule.
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B. HUD's Post-Rulemaking Efforts With Respect to Criminal Histories

    In the 20-plus years since the publication of the final rule 
implementing statutory drug abuse and criminal activity provisions, 
HUD's experience has been that some PHAs and HUD-assisted housing 
owners are unnecessarily restrictive in their use of criminal records 
background screening in their tenant selection practices. This may be 
partly due to mistaken beliefs that HUD still advocates use of ``One 
Strike'' admissions policies, as it did in the 1990s.\12\ Rather than 
viewing criminal records as just one part of what should be an 
individualized determination of whether prospective tenants are likely 
to engage in future criminal activity that may endanger the health and 
safety of others, many have used ``blanket bans'' to turn away 
prospective tenants with any criminal records, no matter how far in the 
past that criminal justice system involvement was and its relation, if 
any, to the applicant's current fitness as a tenant based upon public 
safety, public health, and right to peaceful enjoyment concerns.\13\ 
Some owners and PHAs, especially in recent years, have begun taking an 
individualized approach to tenant screening. Others, however, consider 
the mere presence of certain convictions or criminal records automatic 
grounds for denial, without regard to how far in the past that criminal 
justice system involvement may have occurred, the type of criminal 
history involvement and the circumstances surrounding it, including any 
mitigating factors, such as a subsequent record of rehabilitation. As a 
result, subsidized housing opportunities are denied to a group of 
people that need them the most and whom research demonstrates can most 
benefit from them to reduce the risk of homelessness and recidivism. In 
this

[[Page 25337]]

regard, the Department notes that there are only two statutorily 
required exclusions for federally assisted housing: persons who are 
subject to a lifetime registration requirement under a State sex 
offender registration program and persons convicted of producing 
methamphetamines on federally assisted property.\14\ Other than these 
two statutorily required exclusions, PHAs and HUD-assisted housing 
owners are not statutorily required to deny housing assistance to 
people with prior criminal convictions.
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    \12\ On March 28, 1996, President Clinton announced a ``One 
Strike and You're Out'' policy for public housing residents and 
signed into law the ``Housing Opportunity Program Extension Act of 
1996,'' providing additional authority to PHAs in the areas of 
screening, lease enforcement, and eviction with the aim of reducing 
crime in public housing. In Notice PIH 96-16, HUD recommended that 
PHAs adopt ``One Strike'' policies with stricter screening at 
admissions and lease provisions that offered ``zero tolerance'' for 
public housing residents who engage in criminal activity. Available 
at https://www.hud.gov/program_offices/administration/hudclips/notices/pih/96pihnotices.
    \13\ Blanket ban policies are presumptively inconsistent with 
current HUD regulations, and HUD's proposed changes should not be 
construed to indicate otherwise. For example, when making a 
discretionary (or ``permissive'') admission denial to the voucher 
program, a PHA must show that the criminal activity falls within 
specific categories listed in HUD's regulations. Specifically, the 
criminal activity must be current or have happened a reasonable time 
before the admission decision, and must be either drug-related, 
violent, or criminal activity that may threaten the health, safety, 
or right to peaceful enjoyment of others (i.e., other residents, 
persons residing in the immediate vicinity, the owner, property 
management staff, or persons performing a contract administration 
function or responsibility on behalf of the PHA. 24 CFR 
982.553(a)(2)(ii)(A)(1)-(4). See Hartman v. Hous. Auth. of Cnty. of 
Lawrence, No. 164 C.D. 2021, 2023 WL 7218096, at *4 (Pa. Commw. Ct. 
Nov. 2, 2023)(unpublished)(upholding trial court's opinion that the 
PHA exceeded its authority under HUD regulations and abused its 
discretion when it denied admission to the Section 8 voucher program 
based on a charge of welfare fraud, with no evidence that such 
activity threatened the health, safety, or right to peaceful 
enjoyment of others).
    \14\ There are two ``qualified'' (i.e., not absolute) 
exclusions: (1) a PHA must prohibit admission for three years from 
date of eviction if a household member has been evicted from 
federally assisted housing for drug-related criminal activity (the 
PHA may admit if the PHA determines the member successfully 
completed a supervised drug rehabilitation program approved by the 
PHA, or the circumstances leading to the eviction no longer exist) 
and (2) a PHA must prohibit admission of households with a member 
who: (a) the PHA determines is currently engaging in illegal use of 
a drug, or (b) the PHA determines that it has reasonable cause to 
believe that a household member's illegal drug use, pattern of 
illegal drug use, abuse of alcohol, or pattern of abuse of alcohol 
may threaten the health, safety, or right to peaceful enjoyment of 
the premises by other residents.
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    In addition to admissions, similar patterns exist in the eviction 
and termination context notwithstanding regulatory provisions and 
judicial precedent that should restrain PHAs and assisted housing 
providers. For example, in situations where PHAs and assisted owners 
are granted discretion to evict or terminate for criminal activity, 
some have failed to exercise such discretion in a thoughtful, 
analytical manner and have instead engaged in automatic eviction and 
termination of tenants and participants simply because some criminal 
activity occurred or was alleged to have occurred, with no 
consideration of relevant mitigating circumstances outlined in the 
current regulations. This has led to unnecessary evictions and 
homelessness, including of vulnerable individuals and families who pose 
no danger to others. HUD notes that engaging in automatic evictions and 
terminations where regulations grant PHAs or owners discretion is 
contrary to the regulations currently in place. Courts have adopted the 
view that HUD's eviction and termination regulations already require 
PHAs and owners to consider relevant mitigating circumstances prior to 
an eviction or termination, and HUD agrees with this view.\15\ This 
proposed rule is intended to be consistent with existing law and does 
not intend to suggest that a lesser degree of consideration for 
mitigating circumstances should be given in evictions or terminations 
than in admissions. HUD specifically seeks comment on whether the 
language of the proposed rule makes clear and effective the necessity 
to consider relevant mitigating circumstances prior to eviction or 
termination (see ``Questions for public comment,'' infra, Section VII, 
#4).
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    \15\ See, e.g., E. Carolina Reg'l Housing Authority v. Lofton, 
789 S.E.2d 449, 451 (N.C. 2016) (PHAs attempt to evict tenant and 
her family for her babysitter committing marijuana offenses in her 
unit ``failed to exercise its discretion'' under 24 CFR 
966.4(l)(5)(vii)); City of Charleston Hous. Auth. v. Brown, 878 
S.E.2d 913, 920 (S.C. Ct. App. 2022) (reversing an eviction because 
there was no evidence that the PHA properly exercised its discretion 
by considering mitigating factors as required by Sec.  
966.4(l)(5)(vii)); Carter v. Lynn Hous. Auth., 880 N.E.2d 778, 785 
(Mass. 2008) (reversing termination of voucher where hearing officer 
failed to consider mitigating circumstances required by 24 CFR 
982.552(c)(2), noting that ``failure to exercise discretion is 
itself an abuse of discretion''); Oakwood Plaza Apts. v. Smith, 800 
A.2d 265, 270 (N.J. Super. Ct. App. Div. 2002) (holding that 24 CFR 
982.310(h), ``involve[s] [t]he same degree of discretion'' as in 
public housing evictions, and ``the federal statutory framework 
therefore does not permit a Section 8 landlord to act in an 
arbitrary or capricious fashion.''). HUD is unaware of any judicial 
precedent interpreting HUD regulations as making the consideration 
of relevant mitigating circumstances optional in the eviction 
context; indeed at least one circuit court decision interprets the 
statutory language underlying these regulations as requiring a 
consideration of relevant circumstances. Campbell v. Minneapolis 
Pub. Hous. Auth. ex rel. City of Minneapolis, 168 F.3d 1069, 1076 
(8th Cir. 1999). However, HUD is aware of a split in court decisions 
on this issue in the voucher termination context. HUD agrees with 
those decisions which read the voucher termination regulations as 
requiring the consideration of mitigating circumstances, in line 
with the majority of case law on these issues. See, e.g. Lynn Hous. 
Auth., 880 N.E.2d at 785; Lipscomb v. Hous. Auth. of Cnty. of Cook, 
45 N.E.3d 1138, 1147 (Ill. Ct. App. 2015) (a discretionary 
termination of benefits under 24 CFR 982.552(c) requires the agency 
to consider the ``relevant circumstances'' before making its 
determination); Matter of Gist v. Mulligan, 886 N.Y.S.2d 172, 173 
(App. Div. 2009) (finding the PHA's decision to terminate a tenant's 
voucher was an abuse of discretion based on the circumstances in the 
case, even though the participant violated the program rules); 
Blitzman v. Mich. State Hous. Dev. Auth., Nos. 330184; 334484, 2017 
WL 3044129, at *5-7 (Mich. Ct. App. Jul. 18, 2017) (unpublished) 
(holding that, although ``may consider'' is usually permissive 
language, in the context here, it becomes a command to consider 
mitigating circumstances); Hicks v. Dakota Cnty. Comm. Dev. Agency, 
No. A06-1302, 2007 WL 2416872, at *4 (Minn. Ct. App. Aug. 28, 2007) 
(unpublished) (the PHA must consider the mitigating circumstance in 
the case at hand, even though the regulation used the permissive 
term ``may'') compare to Peterson v. Washington Cnty. Hous. & 
Redevelopment Auth., 805 N.W.2d 558, 563-64 (Minn. Ct. App. 2011) (a 
hearing officer is not required to consider mitigating factors when 
deciding whether a participant's violation of a reporting rule is a 
terminable offense); Bowman v. City of Des Moines Mun. Hous. Agency, 
805 N.W.2d 790, 799 (Iowa 2011) (the words ``may consider'' in Sec.  
982.552(c)(2)(i) give the hearing officer discretion about whether 
to consider mitigating factors).
---------------------------------------------------------------------------

    HUD is committed to ensuring that PHAs and owners retain the 
ability to make admission and termination decisions to protect the 
peaceful enjoyment of all residents and employees at their properties. 
At the same time, HUD seeks to ensure that its grantees make those 
decisions consistent with a growing body of case law, evidence, and 
best practices. PHAs and assisted housing owners should have clarity 
about their obligations so they can have clear, predictable processes 
for screening prospective residents. Effective applicant screening 
entails more than simply reviewing an applicant's criminal record, 
since having a criminal record in and of itself is not a reliable 
indicator that an individual is unsuitable for tenancy in HUD-assisted 
housing. For the same reason, PHAs and owners must consider all 
relevant mitigating circumstances when making termination and eviction 
decisions, rather than basing such decisions solely on a tenant's 
criminal record.
    HUD-assisted properties benefit from having long-term residents who 
pay their portion of the rent and do not interfere with the peaceful 
and quiet enjoyment of other residents. HUD believes that the type of 
screening being proposed in this rule, which aims to determine whether 
people are able to comply with lease terms, would ensure that selected 
residents meet those resident criteria. It would further ensure fewer 
inappropriate denials are made, avoiding the time and expense of re-
reviews or defending challenges.
1. HUD Guidance and Secretarial Letters
    For two decades, HUD has issued letters and guidance in an attempt 
to encourage PHAs and owners of HUD-assisted housing to reconsider and 
revise unnecessarily restrictive criminal record screening and eviction 
policies. In April 2002, former HUD Secretary Mel Martinez urged PHAs 
to use the public housing lease provision that allows for eviction 
based on certain criminal activity (often referred to as the ``one 
strike'' lease provision) only as ``the last option explored, after all 
others have been exhausted,'' and a ``tool of last resort'' in cases 
involving the use of illegal drugs.\16\ In June 2011, former HUD 
Secretary Shaun Donovan issued a letter to PHAs across the country, 
emphasizing the importance of providing ``second chances'' for formerly 
incarcerated individuals.\17\

[[Page 25338]]

Secretary Donovan urged PHAs to adopt admission policies that achieve a 
sensible and effective balance between allowing individuals with a 
criminal record to access HUD-subsidized housing and ensuring the 
safety of all residents of such housing. A year later, Secretary 
Donovan encouraged owners of HUD-assisted multifamily properties 
(``owners'') to do the same,\18\ noting that ``people who have paid 
their debt to society deserve the opportunity to become productive 
citizens and caring parents, to set the past aside and embrace the 
future.'' He also reiterated HUD's goal of ``helping ex-offenders gain 
access to one of the most fundamental building blocks of a stable 
life--a place to live.''
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    \16\ Letter from Mel Martinez to Public Housing Authority 
Executive Directors (April 16, 2002), available at https://www.nhlp.org/wp-content/uploads/Ltr-from-Mel-Martinez-HUD-Secy-to-Pub-Hous-Dirs-Apr.-16-2002-1.pdf.
    \17\ Letter from Shaun Donovan to Public Housing Authority 
Executive Directors (June 17, 2011), available at https://perma.cc/L5QM-MSMX.
    \18\ Letter from Shaun Donovan to Assisted Housing Owners (March 
14, 2012). https://nhlp.org/files/HUD%20Letter%203.14.12.pdf.
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    In 2013, HUD again noted the troubling relationship between housing 
barriers for individuals with criminal records and homelessness. In PIH 
Notice 2013-15,\19\ which focused on housing individuals and families 
experiencing homelessness, HUD stated ``the difficulties in 
reintegrating into the community increase the risk of homelessness for 
released prisoners, and homelessness in turn increases the risk of 
subsequent re-incarceration.'' The notice reminded PHAs of the very 
limited circumstances under which exclusion related to criminal 
activity is mandated by statute and exhorted PHAs to consider amending 
their discretionary admissions and occupancy policies to be more 
inclusive of vulnerable populations who may have criminal backgrounds 
or histories of incarceration.
---------------------------------------------------------------------------

    \19\ Guidance on housing individuals and families experiencing 
homelessness though the Public Housing and Housing Choice Voucher 
programs, HUD PIH Notice 2013-15 (HA), (June 10, 2013), available at 
https://www.hud.gov/sites/documents/PIH2013-15.PDF.
---------------------------------------------------------------------------

    In November 2015, HUD went on to issue more comprehensive guidance 
to both PHAs and assisted housing owners on the proper use of criminal 
records in housing decisions.\20\ The guidance made clear, among other 
things, that arrest records may not be the basis for denying admission, 
terminating assistance, or evicting tenants; that HUD does not require 
the adoption of ``One Strike'' policies; and that PHAs and assisted 
housing owners must be cognizant of their obligation to safeguard the 
due process rights of both applicants and tenants. The Notice also 
explicitly reminds PHAs and owners of their obligation to ensure that 
all admissions and occupancy requirements comply with applicable civil 
rights requirements contained in the Fair Housing Act, Title VI of the 
Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 
1973, Titles II and III of the Americans with Disabilities Act of 1990, 
and all other equal opportunity provisions listed in 24 CFR 5.105.
---------------------------------------------------------------------------

    \20\ Guidance for Public Housing Agencies (PHAs) and Owners of 
Federally-Assisted Housing on Excluding the Use of Arrest Records in 
Housing Decisions, PIH Notice 2015-19 (November 2, 2015), available 
at https://www.hud.gov/sites/documents/PIH2015-19.PDF (Identical 
guidance was issued at the same time by HUD's Office of Housing as 
Housing Notice 2015-10).
---------------------------------------------------------------------------

    With respect particularly to ``One Strike'' policies, HUD stated 
that PHAs and owners are not required to adopt or enforce rules that 
deny admission to anyone with a criminal record or that require 
automatic eviction any time a household member engages in criminal 
activity in violation of their lease. Rather, in most cases, PHAs and 
owners may exercise discretion in these situations, and in exercising 
such discretion they may consider all of the circumstances relevant to 
the particular admission or eviction decision. Additionally, when 
specifically considering whether to deny admission or terminate 
assistance or tenancy because of illegal drug use by a household member 
who is no longer engaged in such activity, a PHA or owner may consider 
whether the household member is participating in or has successfully 
completed a substance use rehabilitation program or has otherwise been 
rehabilitated successfully.
    HUD followed this up with guidance from the Office of General 
Counsel (OGC) in 2016 that clarified that housing providers who use 
overbroad criminal record exclusions risk violating the Fair Housing 
Act.\21\ HUD's Office of General Counsel advised that in order to avoid 
such risk, screening policies based on criminal records should be 
narrowly tailored to exclude only to the extent necessary to achieve a 
substantial interest. To meet this standard, housing providers should 
make an individualized assessment that takes into account relevant 
mitigating information beyond that contained in an individual's 
criminal record before making any adverse decision based on criminal 
activity. HUD's Office of General Counsel instructed that this 
individualized assessment should consider factors such as the facts or 
circumstances surrounding the criminal conduct; the age of the 
individual at the time of the conduct; evidence that the individual has 
maintained a good tenant history before and/or after the conviction or 
conduct; and evidence of rehabilitation.
---------------------------------------------------------------------------

    \21\ See fn.1 supra.
---------------------------------------------------------------------------

    The guidance also clarified that housing providers must be able to 
prove through reliable evidence that their policies actually assist in 
protecting resident safety and peaceful enjoyment; therefore, they 
should not exclude individuals because of one or more prior arrests 
(without any conviction), impose ``blanket bans'' that exclude anyone 
with a conviction record or even certain types of convictions, or 
utilize policies that fail to distinguish between criminal conduct that 
indicates a demonstrable risk to resident safety and/or property and 
criminal conduct that does not. While this OGC guidance was not 
directed specifically to PHAs or HUD-assisted housing providers, it 
applies to them as it does to all other entities who engage in actions 
covered by the Fair Housing Act.\22\
---------------------------------------------------------------------------

    \22\ Id. at 3 (clarifying that the 2016 Guidance ``applies to a 
wide-range of entities covered by the Act, including private 
landlords, management companies, condominium associations or 
cooperatives, third-party screening companies, HUD-subsidized 
housing providers, and public entities that operate, administer or 
fund housing or that enact ordinances that restrict access to 
housing based on criminal involvement''), https://www.hud.gov/sites/dfiles/FHEO/documents/Implementation%20of%20OGC%20Guidance%20on%20Application%20of%20FHA%20Standards%20to%20the%20Use%20of%20Criminal%20Records%20-%20June%2010%202022.pdf.
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    On June 23, 2021, HUD Secretary Marcia Fudge issued a letter to 
PHAs, Continuums of Care, Multifamily Owners, and HUD Grantees,\23\ 
reiterating the theme of HUD's earlier secretarial-issued letters and 
clarifying that people exiting prisons and jails who are at-risk of 
homelessness due to their low incomes and lack of sufficient resources 
or social supports are among the eligible populations for Emergency 
Housing Vouchers under the American Rescue Plan. Secretary Fudge's 
letter also emphasizes HUD's commitment to taking a comprehensive 
approach to addressing reentry housing needs, including developing 
tools and guidance to ensure that applicant screening and tenant 
selection practices avoid unnecessarily overbroad denial of housing to 
applicants on the basis of criminal records; reviewing existing HUD 
policies and regulations that limit access to housing and HUD 
assistance among those with criminal histories; and publishing findings 
regarding the best practices on reentry housing programs.\24\ Following 
the June letter,

[[Page 25339]]

HUD held a series of listening sessions with stakeholders, housing 
residents, and people with lived experience of criminal justice system 
involvement and learned that there continue to be numerous instances of 
people being denied HUD program access for years-old criminal 
convictions or convictions that do not pose a current risk or threat.
---------------------------------------------------------------------------

    \23\ Letter from Marcia L. Fudge to Public Housing Authorities, 
Continuums of Care, Multifamily Owners, and HUD Grantees (June 23, 
2021), https://www.hud.gov/sites/dfiles/PA/documents/SOHUD_reentry_housing_letter.pdf.
    \24\ Id.
---------------------------------------------------------------------------

    Partially as a result of those listening sessions, in April 2022, 
Secretary Fudge issued an internal directive to principal staff to 
conduct an agency-wide review of all existing regulations, guidance, 
and subregulatory policy documents and to propose amendments that will 
reduce barriers to housing for persons with criminal histories and 
their families and make HUD programs as inclusive as possible. This 
review identified opportunities to apply to HUD programs' core 
principles informed by evidence-based research, e.g., that criminal 
records should not be taken as indicating that the person is engaged in 
or at-risk of engaging in current or future criminal activity or used 
in an overbroad manner to deny access to HUD-assisted housing; that 
stable housing reduces recidivism and increases public safety; and that 
overly broad exclusions of people with criminal records do not increase 
public safety.\25\ This proposed rule would implement many of the 
changes that were proposed as part of that review effort.
---------------------------------------------------------------------------

    \25\ U.S. Dept. of Housing and Urban Development, Why Housing 
Matters for Successful Reentry and Public Safety, THE EDGE, (Apr. 
19, 2022), https://www.huduser.gov/portal/pdredge/pdr-edge-frm-asst-sec-041922.html.
---------------------------------------------------------------------------

2. Interagency Coordination Efforts
    HUD has been involved since 2011 in various coordinated 
intergovernmental efforts to address larger issues of reentry of 
formerly incarcerated individuals, as part of both the Federal 
Interagency Reentry Council (FIRC) and the more recently convened 
Reentry Coordination Council (RCC).
    In January 2011, then U.S. Attorney General Eric Holder established 
the Cabinet-level FIRC, representing a significant executive branch 
commitment to coordinating reentry efforts and advancing effective 
reentry policies. From 2011 to 2016, HUD worked with more than 20 other 
federal agencies to reduce recidivism and improve housing, employment, 
education, health, and child welfare outcomes. Following up on the work 
of the FIRC, in October 2021 U.S. Attorney General Merrick Garland 
convened the federal Reentry Coordination Council (RCC). The creation 
of the RCC--which largely mirrors the work of its FIRC predecessor, but 
with an added focus on the impacts of COVID--stems from the First Step 
Act of 2018 (section 505 of Pub. L. 115-391), which reauthorized the 
Second Chance Act and requires the Attorney General to ``coordinate on 
Federal programs, policies, and activities relating to the reentry of 
individuals returning from incarceration to the community, with an 
emphasis on evidence-based practices'' and to ``submit to Congress a 
report summarizing the achievements'' of the agency collaboration, 
including ``recommendations for Congress that would further reduce 
barriers to successful reentry.'' The RCC is composed of 
representatives from six federal agencies in addition to the Department 
of Justice; it issued its first report in April 2022.\26\
---------------------------------------------------------------------------

    \26\ Coordination to Reduce Barriers to Reentry: lessons learned 
from COVID-19 and beyond (April 2022), available at https://www.justice.gov/opa/press-release/file/1497911/download.
---------------------------------------------------------------------------

    In May 2022, President Biden issued Executive Order 14074,\27\ 
which, among other things, mandated the establishment of an interagency 
Alternatives and Reentry Committee, with HUD as an enumerated member, 
to develop a comprehensive evidence-based federal strategic plan to 
improve public safety while safely reducing federal strategy to reduce 
unnecessary criminal justice interactions, to support and improve 
rehabilitation while people are incarcerated, and to facilitate and 
support successful reentry. One of the specific charges of that 
committee is to identify ways to reduce barriers to federal programs, 
including housing programs, for individuals with criminal records.\28\ 
The White House Alternatives, Rehabilitation, and Reentry Strategic 
Plan mandated by the Executive Order was published on April 28, 
2023.\29\
---------------------------------------------------------------------------

    \27\ E.O. 14074 Advancing Effective, Accountable Policing and 
Criminal Justice Practices To Enhance Public Trust and Public Safety 
(May 25, 2022).
    \28\ Id.
    \29\ https://www.whitehouse.gov/briefing-room/statements-releases/2023/04/28/fact-sheet-biden-harris-administration-takes-action-during-second-chance-month-to-strengthen-public-safety-improve-rehabilitation-in-jails-and-prisons-and-support-successful-reentry/.
---------------------------------------------------------------------------

3. HUD's Engagement of Stakeholders and People With Lived Experience of 
Criminal Justice System Involvement
    Prior to and after the Secretary's internal directive to conduct a 
comprehensive internal review of HUD policy and guidance regarding the 
use of criminal records in housing decisions, HUD staff engaged in 
extensive conversations with a variety of stakeholders on these issues. 
In particular, HUD staff has held multiple listening sessions that 
included representatives of public housing agencies, HUD-assisted 
housing providers, community organizers, legal services organizations, 
providers of reentry services and other services for formerly 
incarcerated people, as well as formerly incarcerated individuals and 
other people with criminal records. HUD held three such sessions in 
early April 2022 that were attended by over 100 people. Although they 
were invited to all three sessions, HUD held one of these three 
sessions exclusively for formerly incarcerated people and others who 
have been involved in the criminal justice system. The listening 
sessions revealed several independent insights, including:
     There is wide variation among HUD-assisted housing 
providers in their use of criminal records in screening, admission, and 
tenancy policies.
     Following HUD's issuance of fair housing guidance from the 
Office of the General Counsel, some public housing agencies and HUD-
assisted housing providers proactively made changes in their use of 
criminal records, such as limiting ``lookback'' periods, limiting their 
review to only a certain set of convictions, and also reviewing 
mitigating factors as part of an individualized assessment.
     Many other HUD-assisted housing providers appear to be 
unaware of the 2016 guidance from HUD's Office of General Counsel or 
expressed uncertainty regarding how to apply fair housing principles. 
Some expressed concern that the fair housing guidance applicable to all 
housing providers was difficult to reconcile with HUD program 
regulations and sub-regulatory guidance materials.
     Many people continue to be denied access to HUD housing 
assistance programs for criminal records that appeared to indicate 
little risk to the health, safety, welfare, and peaceful enjoyment of 
housing by other residents.
     Owners and PHAs who provide HUD-assisted housing would 
like clear guidance on how to screen applicants appropriately.
    The information gathered from these listening sessions helped 
inform the Secretary's decision to mandate a comprehensive review, as 
well as this proposed rulemaking.

III. Need for the Regulation

    In addition to creating clarity and standardizing variegated 
admission and termination practices regarding individuals with criminal 
records across

[[Page 25340]]

the country, the proposed rule is needed to address several discrete 
issues.

A. Prevalence of Criminal Justice System Involvement in General 
Population

    In a typical year, approximately 600,000 people in the United 
States enter prisons; at the same time, people are sent to jails across 
our country over 10 million times.\30\ Individuals returning to their 
communities after a term of imprisonment face a number of barriers to 
success, including housing insecurity, inability to access health care, 
food insecurity, and barriers to education and employment. These 
longstanding barriers were exacerbated during the COVID-19 pandemic and 
compounded by additional hurdles, including limited access to 
government and community-based services and support.\31\
---------------------------------------------------------------------------

    \30\ Wendy Sawyer & Peter Wagner, Mass Incarceration: The Whole 
Pie 2022, PRISON POLICY INITIATIVE (Mar. 14, 2023), https://www.prisonpolicy.org/reports/pie2023.html. During the pandemic the 
American correctional system experienced a 20 percent reduction in 
the prison population and a 25 percent reduction in the jail 
population. This is largely due to the ``pandemic-related slowdowns 
in the criminal justice system.''
    \31\ See Ripper, B. (2023). Flyers, fighters, and freezers: how 
formerly incarcerated women coped with reentry and the job search 
during the COVID-19 pandemic. Journal of Offender Rehabilitation, 
62(3), 137-156 and Kramer, C., Song, M., Sufrin, C.B., Eber, G.B., 
Rubenstein, L.S., & Saloner, B. (2023). Release, Reentry, and 
Reintegration During COVID-19: Perspectives of Individuals Recently 
Released from the Federal Bureau of Prisons. Health Equity, 7(1), 
384-394.
---------------------------------------------------------------------------

    The criminal justice system affects a large segment of the U.S. 
population. The U.S. population has less than 5% of the world's 
population but represents over 20% of the world's prisoners. Between 70 
million and 100 million--or as many as one in three Americans--have a 
criminal record.\32\ Approximately 5.5 million people in the United 
States--1 in 48 adult U.S. residents--were under the supervision of 
adult correctional systems at the end of 2021,\33\ and as many as one 
in three adult Americans has been arrested at least once.\34\ In 2021, 
nearly 445,000 people were released from prison.\35\ Individuals in 
prison and jail are disproportionately poor compared to the overall 
U.S. population.\36\ The impact of this mass incarceration is 
disproportionate, with historically marginalized groups being most 
impacted. Moreover, people of color are overrepresented in the nation's 
prisons and jails: for instance, Black Americans make up thirty-eight 
percent of the incarcerated population despite representing only twelve 
percent of the U.S. population. Black men are incarcerated at nearly 
six times the rate of White men. Black men with disabilities account 
for less than 2% of the overall U.S. population but more than 18% of 
the state prison population. Hispanic men are incarcerated at nearly 
two-and-a-half times the rate of White men. Native Americans overall 
are incarcerated at more than twice the rate of White Americans.\37\
---------------------------------------------------------------------------

    \32\ Sent'g Proj., Americans with Criminal Records (Aug. 2022), 
https://www.sentencingproject.org/app/uploads/2022/08/Americans-with-Criminal-RecordsPoverty-and-Opportunity-Profile.pdf.
    \33\ Carson, E. Ann and Kluckow, Rich. (February 2023). 
Correctional Population in the United States, 2021--Statistical 
Tables. Bureau of Justice Statistics. In 2019, an estimated 6.3 
million people in the United States (1 in 40) were under the 
supervision of the adult correctional system. During the first year 
of the pandemic in 2020, the number dropped by 11 percent to 5.5 
million--a level not observed in nearly 25 years. (Minton, Beatty, 
and Zeng, 2021; Kluckow and Zeng, 2022). The decrease between year 1 
and 2 of the pandemic was only 1 percent. (Carson and Kluckow, 2023)
    \34\ See Lucius Couloute, Nowhere to Go: Homelessness among 
formerly incarcerated people, PRISON POLICY INITIATIVE (Aug. 2018), 
https://www.prisonpolicy.org/reports/housing.html; Shawn Bushway et. 
al., Barred from employment: More than half of unemployed men in 
their 30s had a criminal history of arrest, 8 Science Advances No. 7 
(Feb. 18, 2022), https://www.science.org/doi/10.1126/sciadv.abj6992.
    \35\ Carson, E. Ann (December 2022). Prisoners in 2021--
Statistical Tables. Bureau of Justice Statistics.
    \36\ Sawyer & Wagner, supra fn.30.
    \37\ Id. Since the writing of the article, the U.S. Census 
Bureau reported the percent Americans reporting race as ``Black or 
African American alone'' increased to 13.6 percent.
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    The nation as a whole faces a severe shortage of affordable housing 
and rental assistance relative to need; federal housing assistance is 
not an entitlement and serves only one in five eligible renter 
households.\38\ However, certain populations, including those with 
criminal justice system involvement, face even greater challenges with 
obtaining and maintaining housing and housing assistance. The shortage 
of affordable housing during the COVID-19 pandemic placed persons with 
criminal histories and with limited or no credit histories (which is 
often a byproduct of incarceration) at a particular disadvantage. In 
some jurisdictions, the lack of safe, stable housing also delayed 
approval for discretionary early or compassionate release from prison, 
leading those without housing to serve more time behind bars than those 
with stable housing available to them.\39\ Even fewer housing options 
are affordable and accessible for individuals with disabilities, making 
it more difficult for these individuals to successfully transition back 
home from jail or prison.
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    \38\ Corianne Payton Scally, et al., The Case for More, Not 
Less: Shortfalls in Federal Housing Assistance and Gaps in Evidence 
for Proposed Policy Changes, URBAN INST., at 1, (Jan. 2018), https://www.urban.org/sites/default/files/publiction/95616/case_for_more_not_less.pdf; G. Thomas Kingsley, Trends in Housing 
Problems and Federal Housing Assistance, URBAN INST., (Oct. 2017), 
https://www.urban.org/sites/default/files/publication/94146/trends-in-housing-problems-and-federal-housing-assistance.pdf.
    \39\ Letter from Marcia L. Fudge, Secretary, U.S. Dept. of 
Housing and Urban Development, supra at fn 23.
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    Even prior to the pandemic, formerly incarcerated people were 
almost ten times more likely to experience homelessness than the 
general public. The rates are significantly higher among those released 
from incarceration within the prior two years. Using HUD Point-in-Time 
estimates and the National Former Prisoner Survey, academic Lucius 
Couloute \40\ estimates that the sheltered homeless rate is 98 per 
10,000 for formerly incarcerated individuals compared to 13 per 10,000 
for the general public. The unsheltered homeless rate is 105 per 10,000 
for formerly incarcerated individuals compared to 8 per 10,000 in the 
general public. An additional 367 per 10,000 formerly incarcerated 
individuals have marginal housing insecurities, living in rooming 
houses, hotels, or motels. Moreover, studies have calculated that a 
person experiencing chronic homelessness can cost taxpayers between 
$30,000 and $100,000 per year.\41\
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    \40\ See U.S. Dept. of Justice, Bureau of Justice Statistics, 
Correctional Populations in the United States, 2020--Statistical 
Tables (Mar. 2022), https://bjs.ojp.gov/content/pub/pdf/cpus20st.pdf; Lucius Couloute, Nowhere to Go: Homelessness among 
formerly incarcerated people, Prison Policy Initiative (Aug. 2018), 
https://www.prisonpolicy.org/reports/housing.html; Shawn Bushway et. 
al., Barred from employment: More than half of unemployed men in 
their 30s had a criminal history of arrest, 8 Science Advances No. 7 
(Feb. 18, 2022), https://www.science.org/doi/10.1126/sciadv.abj6992; 
see also Saneta deVuono-powell, et al., Who Pays? The True Cost of 
Incarceration on Families, Ella Baker Center, Forward Together, 
Research Action Design (Sept. 2015), at 26-27, https://www.whopaysreport.org/wp-content/uploads/2015/09/Who-Pays-FINAL.pdf 
(stating that in one study, 79 percent of survey respondents 
reported being ineligible for or denied housing due to their 
criminal conviction history or that of a family member).
    \41\ See National Alliance to End Homelessness, Ending Chronic 
Homelessness Saves Taxpayers Money (June 2017), http://endhomelessness.org/wp-content/uploads/2017/06/Cost-Savings-from-PSH.pdf (``A chronically homeless person costs the tax payer an 
average of $35,578 per year''); United States Interagency Council on 
Homelessness, Ending Chronic Homelessness in 2017 (2017), https://www.usich.gov/resources/uploads/asset_library/Ending_Chronic_Homelessness_in_2017.pdf (``Some studies have found 
that leaving a person to remain chronically homeless costs taxpayers 
as much as $30,000 to $50,000 per year); What is the Cost of 
Homelessness?, Father Joe's Villages (Mar. 8, 2022), https://my.neighbor.org/what-is-the-cost-of-homelessness/ (describing how 
top homeless users of public services in San Diego cost tax payers 
nearly an average of $111,000 per year); Malcolm Gladwell, Million 
Dollar Murray, New Yorker (February 5, 2006), https://www.newyorker.com/magazine/2006/02/13/million-dollar-murray 
(describing how one man experiencing homelessness and alcohol use 
disorder used about $1 million dollars in public services over his 
10 years of homelessness); Kathleen Miles, Housing the Homeless Not 
Only Saves Lives--It's Actually Cheaper Than Doing Nothing, HuffPost 
(Mar. 25, 2014), https://www.huffpost.com/entry/housing-first-homeless-charlotte_n_5022628 (describing study finding that program 
that housed 85 chronically homeless adults saved $1.8 million in 
health care costs and reduced emergency room visits and days in the 
hospital by nearly 80 percent).

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[[Page 25341]]

    The nexus between criminal justice system involvement and 
homelessness is clear. Those who have been incarcerated once are seven 
times more likely to experience homelessness than the general 
population; this rises to thirteen times more likely for those arrested 
more than once.\42\ Moreover, research shows that the lack of stable 
housing following incarceration leads to a higher likelihood of 
rearrest and reincarceration.\43\Additionally, there is a growing body 
of evidence that shows that the provision of housing assistance, 
particularly when accompanied with supportive services, can help reduce 
the risk of recidivism and homelessness and decrease the risk of future 
involvement in the criminal justice system.\44\ Blanket bans and other 
restrictive criminal records policies and practices affect more than 
just the individual with a history of criminal activity, but rather 
they can affect an entire family, e.g., when the criminal history of 
one member leads to the denial or termination of housing for all 
members. Studies show that housing instability can have harmful and 
long-lasting consequences for children,\45\ potentially affecting a 
child's educational outcomes, access to medical care, food security, 
and health outcomes.\46\
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    \42\ Id.
    \43\ Id.
    \44\ See, e.g., Kimberly Burrowes, Can Housing Interventions 
Reduce Incarceration and Recidivism? HOUSING MATTERS (Feb. 27, 
2019), https://housingmatters.urban.org/articles/can-housing-interventions-reduce-incarceration-and-recidivism; Leah A. Jacobs & 
Aarton Gottlieb, The Effect of Housing Circumstances on Recidivism: 
Evidence from a Sample of People on Probation in San Francisco, 47 
CRIM. JUST. BEHAV. 1097-1115 (Sept. 2020), ncbi.nlm.nih.gov/pmc/articles/PMC8496894/pdf/nihms-17434785.
    \45\ Rebecca Vallas et al., Removing Barriers to Opportunity for 
Parents with Criminal Records and their Children, Center for 
American Progress (Dec. 2015) at 10, https://americanprogress.org/wp-content/uploads/2015/12/CriminalRecords-report2.pdf?_ga=2.8340081.214011696.1657129695-2105602745.1657129694.
    \46\ Id.
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B. Inaccuracy of Arrest Record as an Indicator of Criminal Activity

    Subject to limitations imposed by program rules, the Fair Housing 
Act, and other civil rights requirements, PHAs and owners generally 
retain discretion in setting admission, termination of assistance, and 
eviction policies for their programs and properties. Even so, such 
policies must ensure that adverse housing decisions based upon criminal 
activity are supported by sufficient evidence that the individual 
engaged in such activity.
    This proposed rule would establish by regulation existing HUD 
guidance that an arrest cannot be the sole basis for a determination 
that an individual engaged in criminal activity. The mere fact that an 
individual has been arrested does not, in and of itself, constitute 
evidence that he or she has engaged in criminal activity. Accordingly, 
the fact that there has been an arrest for a crime may not be used as 
the sole basis for the requisite determination that the relevant 
individual engaged in criminal activity warranting denial of admission, 
termination of assistance, or eviction.
    An arrest shows nothing more than that someone had reason to 
suspect that the person apprehended committed an offense.\47\ In many 
cases, arrests do not result in criminal charges, and even where they 
do, such charges can be and often are dismissed or the person is not 
convicted of the crime alleged. Even where an arrest leads to a charge, 
one study found that only 53 percent of charges resulted in conviction 
(43.8 percent among felony counts), whereas 38.7 percent of all charges 
resulted in non-conviction.\48\
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    \47\ See Schware v. Bd of Bar Examiners, 353 U.S. 232, 241 
(1957); see also United States v. Berry, 553 F.3d 273, 282 (3d Cir. 
2009) (``[A] bare arrest record--without more--does not justify an 
assumption that a defendant has committed other crimes and it 
therefore cannot support increasing his/her sentence in the absence 
of adequate proof of criminal activity.''); United States v. Zapete-
Garcia, 447 F.3d 57,60 (1st Cir. 2006) (``[A] mere arrest, 
especially a lone arrest, is not evidence that the person arrested 
actually committed any criminal conduct.'').
    \48\ Chien, Colleen. (2020). America's Paper Prisons: The Second 
Chance Gap. Michigan Law Review, Volume 119, Issue 3. (computed from 
charge count and conviction tables in the appendix). According to 
the paper, the remaining 8.3 percent of charges were disposed of 
through diversions, deferrals, pending transfers, or the disposition 
of the case was unknown. Id.
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    Moreover, arrest records are often inaccurate or incomplete (e.g., 
by failing to indicate or update the outcome of the arrest or charge 
records or the dispositions of cases presented to the court),\49\ such 
that reliance on arrests not resulting in conviction as the basis for 
denying applicants or terminating the assistance or tenancy of a 
household or household member may result in unwarranted denials of 
admission to or eviction from federally assisted housing.
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    \49\ Wells, M., Cornwell, E.Y., Barrington, L., Bigler, E., 
Enayati, H. & Vilhuber, Y. (2020). Criminal Record Inaccuracies and 
the Impact of Record Education Intervention on Employment-Related 
Outcomes. U.S. Department of Labor; Ariel Nelson, Broken Records 
Redux: How Errors by Criminal Background Check Companies Continue to 
Harm Consumers Seeking Jobs and Housing, National Consumer Law 
Center (Dec. 2019), at 17, https://www.nclc.org/wp-content/uploads/2022/09/report-broken-records-redux.pdf.
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    For these reasons, HUD has explained, and the Supreme Court has 
recognized, that ``[t]he mere fact that a man has been arrested has 
very little, if any, probative value in showing that he has engaged in 
any misconduct.'' \50\ Because arrest records do not constitute proof 
of past unlawful conduct and are often incomplete, the fact of an 
arrest is not a reliable basis upon which to assess the potential risk 
to resident safety or property posed by a particular individual.\51\
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    \50\ Schware, at 241.
    \51\ See, e.g., Conn. Fair Hous. Ctr. v. CoreLogic Rental Prop. 
Sols., LLC, 478 F. Supp. 3d 259, 300 (D. Conn. 2020); U.S. Dep't of 
Justice, The Attorney General's Report on Criminal History 
Background Checks at 3, 17 (June 2006), available at http://www.bjs.gov/content/pub/pdf/ag_bgchecks_report.pdf (reporting that 
the FBI's Interstate Identification Index system, which is the 
national system designed to provide automated criminal record 
information and ``the most comprehensive single source of criminal 
history information in the United States,'' is ``still missing final 
disposition information for approximately 50 percent of its 
records.'' The DOJ has noted that the disposition rates are slightly 
higher today, and this statement doesn't encompass National 
Fingerprint File states that maintain their own criminal history nor 
differentiate between states and federal agencies.).
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    Although a record of arrest itself is insufficient to show that an 
individual engaged in the conduct at question, the conduct underlying 
an arrest--where reliable records of that conduct exist--may indicate 
that the individual is not suitable for tenancy. The conduct, not the 
arrest, is what is relevant for admissions and tenancy decisions. A 
housing provider still must have reliable evidence that the alleged 
conduct reflected in the arrest actually occurred in order to deny 
housing on that basis.\52\

[[Page 25342]]

HUD recognizes that housing providers often lack resources to 
investigate and adjudicate whether criminal conduct occurred in the 
absence of a conviction,\53\ and that a number of PHAs have faced legal 
costs and liability for terminating tenants based on their use of 
unreliable hearsay.\54\ HUD seeks comment on whether it should provide 
further clarification of what evidence may or may not be used to 
determine that criminal activity occurred for admission, denials, 
terminations, and evictions, whether in this rule or in subsequent 
guidance (see ``Questions for public comment,'' infra, Section VII, 
#7).
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    \52\ Analogously, in the employment context, the Equal 
Employment Opportunity Commission has explained that barring 
applicants from employment on the basis of arrests not resulting in 
conviction is not consistent with business necessity under Title VII 
because the fact of an arrest does not establish that criminal 
conduct occurred. See U.S. Equal Emp't Opportunity Comm'n, EEOC 
Enforcement Guidance, Number 915.002, 12 (Apr. 25, 2012), available 
at http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm; see also 
Gregory v. Litton Systems, Inc., 316 F. Supp. 401, 403 (C.D. Cal. 
1970) (holding that defendant employer's policy of excluding from 
employment persons with arrests without convictions unlawfully 
discriminated against African American applicants in violation of 
Title VII because there ``was no evidence to support a claim that 
persons who have suffered no criminal convictions but have been 
arrested on a number of occasions can be expected, when employed, to 
perform less efficiently or less honestly than other employees,'' 
such that ``information concerning a . . . record of arrests without 
conviction, is irrelevant to [an applicant's] suitability or 
qualification for employment''), aff'd, 472 F.2d 631 (9th Cir. 
1972).
    \53\ While a record of conviction will generally serve as 
sufficient evidence to show that an individual engaged in criminal 
conduct, even a guilty plea does not conclusively establish the 
underlying crime. There may be evidence of an error in the record, 
an outdated record, or another reason for not relying on the 
evidence of a conviction. For example, a database may continue to 
report a conviction that was later expunged or pardoned or may 
continue to report as a felony an offense that was subsequently 
downgraded to a misdemeanor. See generally SEARCH, Report of the 
National Task Force on the Commercial Sale of Criminal Justice 
Record Information (2005), available at http://www.search.org/files/pdf/RNTFCSCJRI.pdf. See also Costa v. Fall River Hous. Auth., 903 
NE2d 1098 (Mass. 2009) (noting that ``guilty pleas are not 
conclusive of the underlying facts, but evidence of them).''
    \54\ See, e.g. Woods v. Willis, 825 F. Supp. 2d 893, 901-02 
(N.D. Ohio 2011) (finding that a PHA hearing officer erred for 
terminating Section 8 benefits based solely on hearsay evidence to 
substantiate fraud allegations); Costa v. Fall River Hous. Auth., 
903 NE2d 1098, 1108-12 (Mass. 2009) (holding that a housing 
authority grievance panel could not properly base its decision to 
terminate Section 8 benefits on ``unattributed, multi-level, and 
conclusory hearsay evidence'' from a newspaper); Diaz v. Donovan, 
404959/07, 2008 N.Y. Misc. LEXIS 4570, at *7-8 (Sup. Ct. June 25, 
2008); Basco v. Machin, 514 F.3d 1177, 1182-83 (11th Cir. 2008) 
(hearsay evidence in the form of police reports insufficient to 
create prima facie case for termination) overruled on other grounds 
by Yarbrogh v. Decatur Hous. Auth., 931, 1322, 1323 (11th Cir. 
2019); Escalera v. N.Y.C. Hous. Auth., 425 F.2d 853, 862-63 (2d Cir. 
1970); Edgecomb v. Hous. Auth. of Town of Vernon, 824 F. Supp. 312, 
315-16 (D. Conn. 1993); Loving v. Brainerd Hous. & Redev. Auth., No. 
08-1349 (JRT/RLE), 2009 WL 294289, at *6-7 (D. Minn. Feb. 5, 2009); 
Chase v. Binghamton Hous. Auth., 458 N.Y.S.2d 960, 962-63 (App. Div. 
1983) (holding that unreliable hearsay statements were not 
admissible in an administrative hearing to show that the tenant 
violated her housing agreement); Knox v. Christina, 465 N.Y.S.2d 203 
(App. Div. 1983); Brown v. Winnebago Cty Hous. Auth., 10 C 50027, 
2010 U.S. Dist. LEXIS 144669, at *3-5 (N.D. Ill Apr. 1, 2010); 
Williams v. Hous. Auth. of City of Milwaukee, 779 NW2d 185, 188-90 
(Wis. Ct. App. 2009); Mortle v. Milwaukee County, No. 2007AP166, 
2007 WL 4233007 (Wis. Ct. App. Dec. 4, 2007) (unpublished); Badri v. 
Mobile Hous. Bd., No. 11-0328-WS-M, 2011 WL 3665340, at *5 (S.D. 
Ala. Aug. 22, 2011) (reversing termination based on double hearsay 
contained in letters); Sanders v. Sellers-Earnest, 768 F. Supp. 2d 
1180, 1185-88 (M.D. Fla. 2010) (reversing termination based on 
hearsay statement of ex-boyfriend on police report); Young v. 
Maryville Hous. Auth., No. 3:09-CV-37, 2009 WL 2043891, at *7-*8 
(E.D. Tenn. July 2, 2009) (reversing termination based on double 
hearsay in police report); Willis v. Rice Cty. Hous. & Redev. Auth., 
No. A08-1637, 2009 WL 2225983, at *3-*5 (Minn. Ct. App. July 28, 
2009) (unpublished).
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1. Absence of Empirical Evidence That Having a Criminal Record 
Negatively Affects Success in Tenancy
    Although existence of a criminal record is one of the pieces of 
information used to assess the probability of future criminal 
reoffending, it has not been routinely studied as a predictor of 
housing retention.\55\ One study of a supportive housing program for 
individuals with behavioral health conditions experiencing homelessness 
found that, on average, having criminal history made no difference in 
the ability to successfully stay housed.\56\ Research also shows that 
over time the likelihood that a person with a prior criminal record 
will engage in additional criminal conduct decreases until, by six to 
seven years after the prior offense, it approximates the likelihood 
that a person with no criminal history will commit an offense.\57\
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    \55\ Daniel K. Malone, 2009. ``Assessing criminal history as a 
predictor of future housing success for homeless adults with 
behavioral health disorders,'' Psychiatric Services 60:2, 224-30.
    \56\ See Malone, D.K. (2009). Assessing criminal history as a 
predictor of future housing success for homeless adults with 
behavioral health disorders. Psychiatric Services, 60(2), 224-230. 
The overall housing success rate for continuous residency of at 
least two years was 72 percent among the 332 individuals in the 
sample.
    \57\ See, e.g., id. (citing Title VII cases and Megan C. 
Kurlychek et al., Scarlet Letters and Recidivism: Does an Old 
Criminal Record Predict Future Offending, 5 Criminology and Pub. 
Pol'y 483 (2006) (reporting that after six or seven years without 
reoffending, the risk of new offenses by persons with a prior 
criminal history begins to approximate the risk of new offenses 
among persons with no criminal record).
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    A study of housing outcomes among tenants participating in an 
Intervention based on the Housing First model found that successful 
tenancy by those with a criminal history was similar to that of 
participants without a criminal history.\58\ A national study following 
nearly 15,000 veterans who were transitioned from homelessness to 
housing through the HUD-VA Supportive Housing (HUD-VASH) program found 
that prior incarceration did not impede connection to services or 
success in obtaining or maintaining housing.\59\ A Minnesota study 
examining the relationship between criminal conviction history and 
housing outcomes among over 10,000 households found that 11 out of 15 
conviction types in resident criminal histories show no evidence of 
impact on negative housing outcomes.\60\ The remaining four conviction 
types (property offenses, major drug offenses, fraud, and assault) did 
show an impact on negative housing outcomes, but even they increased 
the probability of negative housing outcomes by only three to nine 
percentage points, which decreased over time.\61\
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    \58\ Id.
    \59\ Tejani N, Rosenheck R, Tsai J, Kasprow W, McGuire JF. 
Incarceration histories of homeless veterans and progression through 
a national supported housing program. Community Ment Health J. 2014 
Jul;50(5):514-9. doi: 10.1007/s10597-013-9611-9. Epub 2013 Jun 1. 
PMID: 23728839.
    \60\ Cael Warren, Success in Housing: How much Does a Criminal 
Background Matter? Wilder Research, at 15(Jan. 2019), https://www.wilder.org/sites/default/files/imports/AEON_HousingSuccess_CriminalBackground_Report_1-19.pdf.
    \61\ Id. Even with this modest impact, the author of this study 
noted that the data limitations--namely the fact that the author 
could not control for residents' employment status, education 
background, disability status, mental health or substance abuse 
diagnoses, or housing history--led him to question the size and 
significance of the impact observed. Id. at 15, 21.
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    HUD is not aware of any empirical evidence that would justify a 
blanket exclusion from housing of people with criminal histories or by 
treating criminal records as per se disqualifying without reference to 
other evidence bearing on fitness for tenancy. Despite this lack of 
empirical basis, many landlords and housing providers continue to deny 
housing or housing assistance to people solely or largely based upon 
their criminal histories. Several studies using paired testers of 
prospective tenants, some with criminal histories and others without, 
found significant differences in success in housing admission.\62\ One 
study found that prospective tenants without criminal records were more 
than twice as likely to have calls returned (96 percent) than those 
with criminal records (43 percent).\63\
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    \62\ Douglas N. Evans, Kwan-Lamar Blount-Hill & Michelle A. 
Cubellis (2019) Examining housing discrimination across race, gender 
and felony history, Housing Studies, 34:5, 761-778, DOI: 10.1080/
02673037.2018.1478069.
    \63\ Evans, Douglas & Porter, Jeremy. (2014). Criminal history 
and landlord rental decisions: a New York quasi-experimental study. 
Journal of Experimental Criminology. 11. 21-42. 10.1007/s11292-014-
9217-4.
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    Many public housing agencies and HUD-assisted housing providers 
recognize that people with criminal records face unnecessary exclusions 
to housing assistance and barriers to housing. A HUD study of public 
housing agency efforts to address homelessness found that PHAs commonly 
identified criminal records as a barrier to assisting people

[[Page 25343]]

experiencing homelessness, and, as a result, many modified their 
screening and admission policies.\64\ Through an initiative supported 
by the U.S. Department of Justice's Bureau of Justice Assistance, 
twenty-two public housing agencies in twelve states voluntarily amended 
their screening and admissions policies to limit the scope of the 
criminal records considered and/or developed programs to increase 
access for people with criminal records.\65\ There is no evidence that 
indicates that the more tailored consideration of criminal records in 
screening and admissions by these public housing agencies negatively 
affected housing outcomes or public safety.
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    \64\ Abt Associates (2014). Study of PHAs' Efforts to Serve 
People Experiencing Homelessness. U.S. Department of Housing and 
Urban Development: Washington, DC.
    \65\ U.S. Department of Justice Bureau of Justice Assistance. 
(2022). ``Opening Doors, Returning Home: How Public Housing 
Authorities Across the Country Are Expanding Access for People with 
Conviction Histories.'' https://bja.ojp.gov/doc/opening-doors-returning-home.pdf.
---------------------------------------------------------------------------

2. Research Demonstrates That Risk of Recidivism and Future Criminal 
Activity Decreases Significantly Over Time and With Age
    Research indicates that a person's prior criminal justice system 
involvement taken at face value is not a reliable or accurate predictor 
of their risk to public safety. Moreover, the relationship between a 
past conviction and the risk of future criminal justice system 
involvement declines over time and with age. Most people who are 
released from incarceration never return to prison.\66\ Studies have 
shown that a person with a prior criminal conviction that has not 
committed a subsequent offense within four to seven years is no more 
likely to be arrested for a crime than a person in the general 
population.\67\ As time passes, a person's criminal history becomes 
less likely to determine their risk of future criminal justice system 
involvement. After a period of time, a person with a criminal history 
is no more likely to commit another offense than a person of the same 
age without a criminal history. Specifically, there is little 
difference in offending likelihood after an individual reaches their 
mid-20's.
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    \66\ Following Incarceration, Most Released Offenders Never 
Return to Prison. Rhodes, W., Gaes, G., Luallen, J., King, R., Rich, 
T., & Shively, M. (2014). https://doi.org/10.1177/0011128714549655.
    \67\ Kurlychek, Megan, et al., Enduring Risk? Old Criminal 
Records and Short-Term Predictions of Criminal Involvement, 53 Crime 
& Delinq. 64.70 (2007).
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    Although 71 percent of state prisoners released from prison were 
arrested within five years following release, half of these arrests 
were for public disorder offenses or associated probation/parole 
violation, failure to appear, obstruction of justice, contempt of 
court, commercialized vice, and disorderly conduct. Nearly all these 
offenses would fall into the category of non-criminal technical 
violations. Research has shown that post-incarceration interventions 
such as housing, social supports, and community-based programs have 
repeatedly shown benefit to enrolled individuals, regardless of the 
severity of their original criminal conduct.\68\ Research indicates 
that recidivism rates drop significantly after three years for all 
types of offenses.\69\
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    \68\ See Recidivism Rates: What You Need to Know. Council on 
Criminal Justice (2021). https://counciloncj.org/recidivismreport/ 
and Reforms without Results: Why states should stop excluding 
violent offenses from criminal justice reforms. Prison Policy 
Initiative (2020). https://www.prisonpolicy.org/reports/violence.html.
    \69\ Bureau of Justice Statistics. ``Recidivism and Reentry'' 
available at https://bjs.ojp.gov/topics/recidivism-and-reentry. 
Accessed on February 22, 2024.
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    Of the small percentage of people who do reoffend, the average time 
from release to the subsequent offense is 18 months. However, it is 
important to keep in mind whether a person receives supportive services 
that address their core needs and their environment affects their risk 
of recidivism.\70\ When a person is released to a higher-risk 
environment, the risk of reoffending increases. Higher-risk 
environments are characterized by instability, such as a shortage of 
affordable, accessible, and quality housing; lack of positive social 
supports; unemployment; and other factors. The risk of recidivism is 
not the same for every person; assessing the likelihood of reoffending 
requires consideration of multiple factors and is highly individual and 
circumstance dependent.
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    \70\ The Limits of Recidivism: Measuring Success After Prison 
(2022). https://nap.nationalacademies.org/read/26459/chapter/1.
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    Another factor to consider is age. Researchers have studied the 
prevalence of offending over the life course. Their studies have shown 
that crime commission typically peaks in the mid-20s and then drops 
sharply as a person ages. Most people will no longer commit crimes by 
their 40s, and desistence from crime overall is the typical 
outcome.\71\ There are a number of reasons why offending decreases with 
age. Studies on brain development suggest that adolescents are more 
likely to take more risks, be more influenced by their peers, and act 
on instant gratification. Human brains do not develop completely until 
approximately age 26, and the rational decision-making centers are the 
last to develop. As people age, they tend to become more future-
oriented, better able to manage their emotions, and more able to assess 
the consequences of their actions.\72\ Of individuals who were 
incarcerated, older individuals are substantially less likely to 
recidivate. If they do recidivate, it is more likely to involve a non-
violent offense or technical violation.\73\ Aging out of the criminal 
justice system altogether, however, is the typical outcome.
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    \71\ A New Lease on Life. The Sentencing Project (2021). https://www.sentencingproject.org/app/uploads/2022/08/A-New-Lease-on-Life.pdf.
    \72\ Adolescent Development and the Regulation of Youth Crime. 
Scott, E. & Steinberg, L. (2008). https://ccoso.org/sites/default/files/import/Adol-dev-and-reg-of-crime.pdf.
    \73\ The Effects of Aging on Recidivism Among Federal Offenders. 
United States Sentencing Commission (2017). https://www.ussc.gov/sites/default/files/pdf/research-and-publications/research-publications/2017/20171207_Recidivism-Age.pdf.
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    Criminal records alone are not reliable, accurate, or sufficient to 
determine a person's risk to public safety or risk of engaging in 
future criminal activity as most people who commit crimes do not engage 
in further criminal activity, recidivism risk is highly individual and 
circumstance dependent, and the risk of reoffending decreases with time 
and age. Additionally, research shows that positive environmental 
factors and supportive services, such as access to housing, decrease 
the risk that a person will reoffend.

C. Primacy of Stable Housing as It Affects Recidivism Rate and Public 
Safety

    There is compelling evidence that excluding or denying housing or 
housing assistance to people with criminal records can have detrimental 
and counterproductive impacts on the people with criminal records, and, 
by increasing the risk of recidivism, undermine the public safety of 
communities as a whole. Denying housing assistance to people with prior 
criminal justice system involvement can increase the risk of housing 
instability and homelessness, which can, in turn, increase their risk 
of recidivism. As noted earlier, formerly incarcerated individuals are 
nearly ten times more likely to be homeless than the general public, 
and the rates are significantly higher among those released from jail 
or prison within the past two years.\74\ Homelessness and housing 
instability among people returning to the community from prisons and 
jails can increase their recidivism, particularly in the first few 
months and years following release from prison or jails, when the

[[Page 25344]]

need for stabilizing supports is most acute. One study estimated that 
people with unstable housing were up to seven times more likely to 
reoffend.\75\ Housing insecurity also increases the risk of recidivism 
for people on probation.\76\ The type of housing a person is released 
to also affects the risk of recidivism, and release to emergency 
shelters after release from jail or prison increases the odds of 
rearrest.\77\ Research also has found that moving residences increases 
the risk of recidivism by at least 70 percent every time someone who is 
formerly incarcerated changes their residence due to the destabilizing 
impact.\78\
---------------------------------------------------------------------------

    \74\ See fn.40, supra, and the accompanying text.
    \75\ Valerie Schneider, The Prison to Homelessness Pipeline: 
Criminal Records Checks, Race, and Disparate Impact, 93 Ind. L. J. 
421, 432-33 (2018).
    \76\ Jacobs, L.A., & Gottlieb, A. (2020). The Effect of Housing 
Circumstances on Recidivism: Evidence From a Sample of People on 
Probation in San Francisco. Criminal Justice and Behavior, 47(9), 
1097-1115. https://doi.org/10.1177/0093854820942285
    \77\ Clark, V. (2015). The Effect of Community Context and Post-
Release Housing Placements on Recidivism Evidence from Minnesota. 
Minnesota Department of Corrections.
    \78\ Tesfai, A. & Gilhuly, K. (2016). The Long Road Home: 
Decreasing Barriers to Public Housing for People with Criminal 
Records. Human Impact Partners.
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    By contrast, there is compelling evidence that stable housing and 
the provision of housing assistance programs can reduce the risk of 
recidivism, which includes arrests, convictions, and incarceration for 
new offenses. A study by the Urban Institute found that people who 
secured housing within a few months after release from jail or prison 
had better mid-term outcomes than those who had less stable access to 
housing.\79\ Stable housing also increases the ability of formerly 
incarcerated people to find and maintain employment and reestablish 
family ties, both of which have also been shown to reduce 
recidivism.\80\ Numerous studies have found that the provision of 
affordable housing with other supportive services, including permanent 
supportive housing programs, reduced police interactions, arrest rates, 
and admission rates to jail and prison, days spent in jail or prison, 
and increased successful completion of parole.\81\
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    \79\ Yahner, J. & Visher, C. (2008). Illinois Prisoners' Reentry 
Success Three Years after Release. Urban Institute.
    \80\ Baer, D., Bhati, A., Brooks, L., Castro, J., La Vigne, N., 
Mallik-Kane, K., Naser, R., Osborne, J., Roman, C., Roman, J., 
Rossman, S., Solomon, A., Visher, C., & Winterfield, L. (2006). 
Understanding the Challenges of Prisoner Reentry: Research Findings 
from the Urban Institute's Prisoner Reentry Portfolio. Urban 
Institute.
    \81\ See studies identified at https://www.huduser.gov/portal/pdredge/pdr-edge-frm-asst-sec-041922.html.
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IV. State and Local Legislative and Policy Changes To Reduce Barriers 
to Housing for People With Criminal Histories

    Recognizing that people with criminal records face barriers and 
exclusions from rental housing and housing assistance programs, several 
states and localities have enacted legislation or adopted policies that 
regulate the use of criminal records in admissions decisions. Many of 
these laws, including the examples below, apply to providers of 
government- and HUD-assisted housing programs as well as private-market 
rental housing.
    In 2018, the District of Columbia amended its local code to adopt a 
Fair Criminal Record Screening for Housing policy that prohibits any 
landlord or provider of rental housing from accessing applicants' 
arrest records, limits landlords' consideration to 48 specified 
criminal convictions that must have occurred in the past seven years 
and requires landlords to consider mitigating factors prior to denying 
admission to rental housing.
    In 2019, Colorado passed the Rental Application Fairness Act.\82\ 
Under this law, landlords may not consider arrest records or criminal 
conviction records more than five years before the date of housing 
application. There are several exceptions, including for crimes related 
to methamphetamine, crimes requiring registration to the sex offender 
registry, and homicides.
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    \82\ Colorado HB 19-1106(2020), https://leg.colorado.gov/sites/default/files/2019a_1106_signed.pdf.
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    Also in 2019, the Cook County, Illinois, Board of Commissioners 
passed an amendment to its county human rights ordinance that prohibits 
housing discrimination on the basis of a criminal record. Specifically, 
this law prohibits denying admission to rental housing based on a 
criminal history unless there is a conviction within the past three 
years, or the person is subject to a sex offender registry bar. It also 
requires landlords to perform an individualized assessment and to show 
that any denial based on a criminal conviction in the past three years 
is necessary to protect against a demonstrable risk to personal safety 
and/or property.\83\
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    \83\ Cook County Board of Commissioners, https://www.cookcountyil.gov/content/just-housing-amendment-human-rights-ordinance.
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    In 2021, Illinois passed the Public Housing Access Bill, under 
which PHAs are required to limit their lookback period for criminal 
activity to six months prior to the application date (the two federal 
mandates remain in place).\84\
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    \84\ Illinois Public Act 101-0659 (2021), https://ilga.gov/legislation/publicacts/101/PDF/101-0659.pdf.
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    New Jersey's Fair Chance in Housing Act, passed in 2021, places 
limits on housing providers' ability to inquire about arrests, expunged 
criminal records, and records from the juvenile justice system. Only 
after a conditional offer of housing is made may a housing provider run 
a criminal background check and an individualized assessment is 
required prior to any denial based on a criminal record. The law 
includes a tiered system for denial under which certain types of 
conviction records require a longer lookback period than others. For 
example, a six-year lookback period is in place for a first-degree 
indictable offense; that decreases to four years for a second- or 
third-degree indictable offense.\85\
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    \85\ New Jersey Office of the Attorney General, Fair Chance in 
Housing Act What You Need to Know, https://www.njoag.gov/wp-content/uploads/2022/01/FCHA-Flowchart-12.30.21.pdf.
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    New York State's housing agency, Homes and Community Renewal (HCR), 
has adopted a policy that regulates what criminal history information 
may be considered and used in connection with admissions decisions by 
housing providers receiving state funding. HCR's policy limits the 
review of criminal records by applicants to state-funded housing 
providers to misdemeanors within the last year or felonies within the 
last five years and also requires that state-funded housing providers 
conduct an individualized assessment that must take into account 
multiple factors to assess the relevance of the criminal conviction to 
housing suitability.\86\ HCR provides state-funded housing agencies 
with a worksheet to guide this individualized assessment.\87\
---------------------------------------------------------------------------

    \86\ New York State Homes and Community Renewal, https://hcr.ny.gov/system/files/documents/2022/10/doc-y-guidance-for-assessing-justice-involved-applicants_-10.7.2022.pdf.
    \87\ New York State Homes and Community Renewal, https://hcr.ny.gov/system/files/documents/2022/12/doc-x-justice-involved-worksheet_-10.7.2022.pdf.
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    In 2017, Seattle, Washington, enacted the Fair Chance Housing 
Ordinance, which prohibits landlords from inquiring about criminal 
history or taking adverse action based upon criminal history.\88\ Its 
goal is to prevent unfair bias against individuals with prior criminal 
justice system involvement. The ordinance also prohibits advertising 
language that would automatically exclude individuals with arrest 
records,

[[Page 25345]]

conviction records, or criminal histories.\89\
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    \88\ Seattle, Wash., Municipal Code sec. 14.09, et seq.
    \89\ See Yim v. City of Seattle, 63 F.4th 783 (9th Cir. 2023) 
(ruling that the provision preventing landlords from asking about a 
tenant's criminal record violates the First Amendment, but upholding 
the portion of the ordinance that bars a landlord from taking 
adverse action based on a tenant's criminal history).
---------------------------------------------------------------------------

    In 2020, both Oakland and Berkeley, California, enacted Fair Chance 
Housing Ordinances.\90\ The laws prohibit most types of landlords from 
asking about or taking adverse action based on criminal history. There 
are narrow exceptions including one that allows housing providers to 
comply with federal or state laws that require automatic exclusion 
based on specific types of criminal histories.
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    \90\ Berkeley, Cal., Mun. Code sec. 13.106.040, et seq.; 
Oakland, Cal., Mun. Code sec. 8.25.010, et seq.
---------------------------------------------------------------------------

    Ann Arbor, Michigan, enacted its Fair Chance Access to Housing law 
in 2021.\91\ Similar to Oakland and Berkeley, Ann Arbor's law also 
prohibits landlords from asking about or taking adverse action due to 
criminal history with certain narrow exceptions. As with the California 
laws discussed above, even where exceptions do exist, emphasis is 
placed on providing applicants with notice and an opportunity to 
withdraw their applications for tenancy.
---------------------------------------------------------------------------

    \91\ Ann Arbor, Mich., Mun. Code, Title IX, Chapter 122, sec. 
9:600, et seq.
---------------------------------------------------------------------------

    This proposed rule is informed by some of these state and local 
laws, but HUD does not propose to go so far as to bar any consideration 
of criminal history.

Lookback Periods

    As noted above, several of these state and local legislative and 
policy initiatives have involved not only Fair Chance statutes and 
ordinances, but efforts aimed directly at defining and limiting 
lookback periods for criminal activity when such activity may be 
relevant to a potential adverse housing action.
    The issue of limiting lookback periods was specifically raised by 
HUD as an industry best practice in its 2015 notice to PHAs and owners 
of federally assisted housing.\92\ Likewise, many reentry advocates 
point to overly lengthy lookback periods as one of the major 
impediments to successful reentry.\93\ While declining to provide a 
one-size-fits-all solution, HUD itself has suggested in 2001 \94\ that 
five years may be a reasonable period for serious offenses, depending 
on the offense. HUD notes, however, the more recent efforts by states 
and localities across the country and social science research conducted 
since 2001 support further reducing these lookback periods.\95\
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    \92\ See fn.20, supra.
    \93\ See, e.g., When Discretion Means Denial: A National 
Perspective on Criminal Barriers to Federally Subsidized Housing 
(Chicago: Sargent Shriver National Center on Poverty Law, 2015), 
p.12.
    \94\ See, Screening and Eviction for Drug Abuse and Other 
Criminal Activity, 66 FR 28776, 28779 (May 24, 2001).
    \95\ See studies cited in section III, B-C, supra.
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    Recognizing the discretion currently afforded to PHAs and owners to 
establish their own lookback periods and the absence of standard 
practice in this area (with many PHAs or owners operating under 
policies that allow lookback periods of ten years or more), HUD 
proposes that in making admissions decisions a lookback period that 
considers convictions that occurred more than three years prior to an 
application is presumptively unreasonable. The proposed rule would 
permit, however, a PHA or owner to determine a longer lookback period 
for certain crimes if they are able to provide empirical evidence 
justifying such longer period.
    HUD seeks specific comment from the public on the issue of lookback 
periods for criminal activity (see ``Questions for public comment,'' 
infra, Section VII, #2).

V. Need To Bring Regulations Into Alignment With Civil Rights Laws and 
Other Legal Requirements

    HUD has a duty to both administer its programs in a manner that 
affirmatively furthers fair housing (AFFH) \96\ and to ensure that 
PHAs, owners, and grantees do not discriminate in HUD's housing 
programs.\97\ Additionally, even when statutes and regulations grant 
HUD-assisted housing providers discretion to deny admission, terminate, 
or evict, based on certain criminal records, criminal activity, or for 
other reasons, this discretion is necessarily limited by requirements 
for housing providers under civil rights statutes, including the Fair 
Housing Act's mandate to not discriminate.\98\
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    \96\ See 42 U.S.C. 3608(d), (e)(5).
    \97\ See, e.g., San Francisco Housing Auth. v. United States, 
No. C 03-2619 CW, Slip Op. at 14-15 (N.D. Cal. July 29, 2003) 
(noting that ``[t]his affirmative fair housing duty was imposed by 
Congress to correct the longstanding `bureaucratic myopia' of HUD 
and its predecessor agencies regarding civil rights and housing 
discrimination,'' and that ``[t]he public has a vital interest in 
ensuring that the HOPE VI program is administered in accordance with 
the Fair Housing Act.'').
    \98\ See, e.g., Alexander v. Edgewood Mgmt. Corp., Civ. No. 15-
01140 (RCL), 2016 U.S. Dist. LEXIS 145787, at *7 (D.D.C. July 22, 
2016) (noting that although defendant was allowed to deny admission 
to applicants for engaging in certain criminal activity under 42 
U.S.C. 13661(c) (pertinently, for drug-related or violent criminal 
activity or other criminal activity which would adversely affect the 
health, safety, or right to peaceful enjoyment of the premises by 
other residents which was engaged in in a reasonable time prior to 
admission), this ``is still subject to claims of disparate 
impact''); Langlois v. Abington Hous. Auth., 234 F. Supp. 2d 33, 67-
69 (D. Mass. 2002) (explaining how program statutes and the Fair 
Housing Act must be read in harmony, and that the permission the 
Quality Housing and Work Responsibility Act of 1998 grants to PHAs 
to enact local preferences is limited by the Fair Housing Act, 
including its prohibition against policies having an unjustified 
disparate impact); Comer v. Cisneros, 37 F.3d 775, 795 (2d Cir. 
1994) (``Although the U.S. Housing Act, by its terms, does permit a 
local preference, such preference is subject to various limitations 
including that its administration must be consistent with the 
Constitution and civil rights laws.''); Altman v. Eco Vill., Ltd., 
No. C 79-202, 1984 U.S. Dist. LEXIS 24962, at *21 (N.D. Ohio 1984) 
(citing the Fair Housing Act and finding in favor of tenants of a 
Section 8 new construction building and against the owner for 
discriminatory eviction actions taken against the tenants, while 
also finding that the relevant programmatic statute granted the 
owner broad discretion to evict tenants, even without citing any 
cause). See e.g., Operations Notice for the Expansion of the Moving 
to Work Demonstration Program, 85 FR 53458-9 (``Notwithstanding the 
flexibilities described in this notice, the public housing and 
voucher funding provided to MTW agencies remain federal funds and 
are subject to any and all other federal requirements outside of the 
1937 Act . . . As with the administration of all HUD programs and 
all HUD-assisted activities, fair housing, and civil rights issues 
apply to the administration of MTW demonstration. This includes 
actions and policies that may have a discriminatory effect on the 
basis of race, color, sex, national origin, religion, disability, or 
familial status (see 24 CFR part 1 and part 100 subpart G) or that 
may impede, obstruct, prevent, or undermine efforts to affirmatively 
further fair housing.''); 85 FR 53449-50 (``HUD and the MTW agencies 
may not waive or otherwise deviate from compliance with Fair Housing 
and Civil Rights laws''); cases cited in fn.99 (courts consistently 
finding that eviction actions that are not mandatory but are allowed 
by program statutes (i.e. for criminal activity that threatens the 
health, safety, and welfare of other tenants) are subject to 
reasonable accommodation requirements of the Fair Housing Act.)
---------------------------------------------------------------------------

    Criminal record policies that are otherwise lawful are still 
subject to the Fair Housing Act's requirement to provide reasonable 
accommodations for people with disabilities and similar requirements 
under Section 504 of the Rehabilitation Act and the Americans with 
Disabilities Act.\99\ HUD's

[[Page 25346]]

regulations must provide sufficient guidance to owners and managers of 
federally assisted housing to enable them to, among other things, 
comply with civil rights laws. See 42 U.S.C. 13603(b)(2)(D).
---------------------------------------------------------------------------

    \99\ See Hunt v. Aimco Props., L.P., 814 F.3d 1213, 1226 (11th 
Cir. 2016) (finding in favor of tenant and against landlord where 
landlord terminated tenant's lease based on tenant's son threating 
to ``sacrifice [the landlord's staff members] then trap all the 
residents in their apartments and set the property on fire'', where 
the landlord refused to modify its policies to accommodate the 
tenant's son's disabilities); Sinisgallo v. Town of Islip Hous. 
Auth., 865 F. Supp. 2d 307, 341-343 (ED NY May 23, 2012) (PHA's 
attempt to evict a tenant for assaulting his neighbor where the 
tenant's behavior was caused by his disability and where the PHA 
made no attempt to consider reasonable accommodations which would 
eliminate or acceptably minimize the risk the tenant posed violated 
the Fair Housing Act); Roe v. Sugar River Mills Associates, 820 F. 
Supp. 636 (D.N.H 1993) (finding that HUD-funded housing provider 
would violate Act by evicting tenant with a conviction for 
disorderly conduct for threatening elderly neighbor without first 
demonstrating that no reasonable accommodation would eliminate or 
acceptably minimize the risk he posed to other residents at the 
complex); Roe v. Housing Authority of City of Boulder, 909 F. Supp. 
814 (D. Colo 1995) (finding PHA violated the Fair Housing Act by 
attempting to evict tenant without considering accommodating the 
tenant's disabilities where tenant had struck and injured another 
tenant, threatened apartment manager, and created noise disturbing 
neighbor); PIH Public Housing Occupancy Guidebook 2.2 (``A PHA must 
engage in an individualized analysis to determine if it must provide 
a reasonable accommodation to an individual with a disability who 
allegedly is in violation of the PHA's criminal record policies, 
rules, or lease.'') available at https://www.hud.gov/sites/dfiles/PIH/documents/PHOGLeaseRequirements.pdf.
---------------------------------------------------------------------------

    This proposed rule would incorporate changes to program regulations 
that, in addition to furthering the policy aims discussed above, help 
HUD-assisted housing providers ensure they are complying with these 
obligations. Much of the conduct this rule proposes to require has been 
found to be required by courts under the Fair Housing Act and other 
laws. For example, various courts have held that statutory and 
regulatory program rules require an independent assessment--as this 
rule would require--or have held that it is an abuse of discretion for 
a housing provider to fail to consider individual circumstances.\100\ 
HUD believes this proposed rule would help PHAs and HUD-subsidized 
housing providers comply with such case law by providing necessary 
clarity.
---------------------------------------------------------------------------

    \100\ See, e.g. Carter v. Lynn Hous. Auth., 450 Mass. 626, 635, 
880 N.E.2d 778, 785 (2008) (considering 42 U.S.C. 1437 et seq. and 
24 CFR 982.552(c)(2)(i) as requiring the consideration of mitigating 
circumstances) (quoting Commonwealth v. Fredette, 56 Mass. App. Ct. 
253, 259 n.10, 776 N.E.2d 464 (2002) (``Failure to exercise 
discretion is itself an abuse of discretion'')); Singleton v. Bos. 
Hous. Auth., 98 Mass. App. Ct. 1105, 150 N.E.3d 1163 (2020) (due 
process regulations at 24 CFR 982.552(c)(2)(i) require the decision 
maker to weigh the evidence, find facts relating to ``all relevant 
circumstances,'' and to balance them in the decision whether to 
impose a sanction less severe than termination); Matter of Gist v. 
Mulligan, 2009 NY Slip Op 6688, ] 1, 65 A.D.3d 1231, 1232, 886 
N.Y.S.2d 172, 173 (App. Div. 2nd Dept.) (finding the decision to 
terminate a tenant's voucher by the PHA to be an abuse of discretion 
based on the circumstances where the penalty of termination was 
shocking to one's sense of fairness, even though evidence supported 
that the participant engaged in program violations which constituted 
valid bases of termination) (citing Matter of Sicardo v Smith, 49 
AD3d 761, 762, 853 NYS2d 639 [2008]; Matter of Riggins v Lannert, 18 
AD3d 560, 562, 796 NYS2d 93 [2005]; Matter of Brown v Lannert, 272 
AD2d 323, 714 NYS2d 677 [2000]).
---------------------------------------------------------------------------

    Policies or practices that bar persons from housing based on their 
criminal history may have a disparate impact on certain groups of 
persons \101\ and thus implicate the Fair Housing Act and other civil 
rights laws. In particular, given data showing that persons of color 
and persons with disabilities are disproportionately impacted by 
criminal justice system involvement, courts in recent years have 
recognized that criminal records-based policies may discriminate 
because of characteristics protected under the Fair Housing Act.\102\ 
People of color are ``arrested, convicted and incarcerated at rates 
[that are] disproportionate to their share of the general population.'' 
\103\ In 2019, the incarceration rate of Black males was 5.7 times that 
of White non-Hispanic males.\104\ Consistent with longstanding 
jurisprudence, even if a housing provider has no intent to 
discriminate, a criminal records policy can violate the Fair Housing 
Act if it has an unjustified discriminatory effect on a protected 
class.\105\ To adequately justify a criminal records policy with a 
disparate impact on a protected class (such as race or disability), a 
housing provider must be able to demonstrate that it is necessary to 
serve the housing provider's substantial, legitimate, nondiscriminatory 
interest, and that such interest could not be served by another 
practice that has a less discriminatory effect.\106\ While ensuring 
resident safety and protecting property are substantial and legitimate 
interests, they must be the actual reasons for a criminal records 
policy and a housing provider must be able to prove through reliable 
evidence that its policy actually assists in protecting resident safety 
and/or property and that interest could not be served by another policy 
that has a less discriminatory effect.\107\
---------------------------------------------------------------------------

    \101\ See fn.20, supra. See also ``Implementation of the Office 
of General Counsel's Guidance on Application of Fair Housing Act 
Standards to the Use of Criminal Records by Providers of Housing and 
Real Estate-Related Transactions'' at 2 (June 10, 2022).
    \102\ See, e.g., Sams v. GA W. Gate, LLC, No. CV415-282, 2017 
U.S. Dist. LEXIS 13168, at *13-14 (S.D. Ga. Jan. 30, 2017) (finding 
that plaintiffs had successfully plead that a policy banning those 
with certain convictions in the last 99 years would disparately 
impact African Americans based on statistics showing that ``African 
Americans are twice as likely to have criminal convictions as 
caucasians [and that] . . . in 2014, African Americans represented 
36% of the prison population in the United States but only 12% of 
the country's total population''); Jackson v. Tryon Park Apartments, 
Inc., No. 6:18-CV-06238 EAW, 2019 U.S. Dist. LEXIS 12473, at *8-9 
(W.D.N.Y. Jan. 25, 2019) (finding that plaintiff had successfully 
plead that policies excluding people for having a felony conviction 
have a disparate impact on applicants for housing on the basis of 
race and color because ``[e]mpirical evidence shows that nationally, 
and in New York State, blanket bans on eligibility, based on 
criminal history, result in the denial of housing opportunities at a 
disproportionate rate for African Americans and minorities''); La. 
Fair Hous. Action Ctr. v. Azalea Garden Props., LLC, No. 22-74, 2022 
U.S. Dist. LEXIS 77083, at *14 (E.D. La. Apr. 27, 2022) (finding 
that plaintiff's statistical data showing that ``a disproportionate 
number of African Americans are arrested and incarcerated in the 
United States compared to white persons, [which] is particularly 
true at the local level in Jefferson Parish where the apartment 
building was located'', made plausible the allegation that a blanket 
ban (or something short of a blanket ban) excluding all applicants 
with any criminal history disproportionately affects certain 
applicants because of race), rev'd on other grounds, 82 F.4th 345 
(5th Cir. 2023); Jones v. City of Faribault, No. 18-1643 (JRT/HB), 
2021 U.S. Dist. LEXIS 36531, at *55 (D. Minn. Feb. 18, 2021) 
(recognizing that while it is ``of course true that the [defendant] 
did not create the pervasive and well-known racial disparities in 
the criminal justice system . . . if the [defendant's] criminal 
screening policy intersects with a pre-existing, known racial 
disparity in a way that creates a similar racial disparity in 
housing, then it is possible that the [defendant's] policy creates a 
housing disparity and violates the [Fair Housing Act.]''); Conn. 
Fair Hous. Ctr. v. CoreLogic Rental Prop. Sols., LLC, 478 F. Supp. 
3d 259, 291-93 (D. Conn. 2020) (finding plaintiffs' evidence that 
nationally, African Americans and Latinos are more likely to be 
arrested for federal drug crimes than whites, and, in Connecticut, 
African Americans are more likely to be arrested than white, created 
a sufficient issue for trial regarding whether defendants' policy 
created a disparate impact on African Americans and Latinos); 
Alexander v. Edgewood Mgmt. Corp., No. 15-01140 (RCL), 2016 U.S. 
Dist. LEXIS 145787, 2016 WL 5957673, at *2-3 (D.D.C. July 25, 2016) 
(finding plaintiff properly plead that the defendant violated the 
Fair Housing Act where the applicant was rejected based on a seven 
year old misdemeanor conviction and an over 15 year old conviction 
that was later overturned and which the plaintiff alleged created a 
discriminatory effect on African Americans because a 
disproportionate number of individuals arrested, convicted, and 
incarcerated in the District of Columbia are African American); 
Fortune Soc'y v. Sandcastle Towers Hous. Dev. Fund Corp., 388 F. 
Supp. 3d 145, 173 (E.D.N.Y. 2019) (finding plaintiffs presented 
sufficient evidence that defendants had blanket ban on anyone with a 
criminal record and allowing plaintiffs expert witness to testify at 
trial about how disparities in the criminal justice system support 
that defendant's criminal record policy has a disparate impact on 
African American and Latino individuals).
    \103\ See fn.1, supra. See also Report Highlights `Staggering' 
Racial Disparities in U.S. Incarceration Rates (usnews.com) 
(reporting that nationally ``Black Americans are incarcerated at 
nearly 5 times the rate of white Americans, though in some states 
the disparity is far greater.'').
    \104\ Robey, J., Massoglia, M., & Light, M. (2023). A 
generational shift: Race and the declining lifetime risk of 
imprisonment. Demography, p. 1.
    \105\ See 24 CFR 100.500; see also Tex. Dep't of Hous. & Cmty. 
Affairs v. Inclusive Cmtys. Project, Inc., 576 U.S. at 519, 527-28, 
535-36, 541 (upholding disparate impact liability, overviewing HUD's 
regulation which provides this framework to analyze disparate impact 
claims and citing this framework with approval).
    \106\ Id.
    \107\ See fn.1, supra; see also Conn. Fair Hous. Ctr. v. 
CoreLogic Rental Prop. Sols., LLC, 478 F. Supp. 3d 259, 300 (D. 
Conn. 2020) (applying this same principle to its partial grant of 
summary judgment to plaintiff on issue of whether a particular 
criminal records screening policy was necessary to protect health 
and safety and concluding that excluding people from housing based 
on arrests alone cannot serve a legitimate business justification.)

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[[Page 25347]]

    As described above, this proposed rule is intended to address 
certain common practices that HUD believes may sweep too broadly in 
their attempts to serve legitimate interests such as tenant safety and 
so may expose PHAs and HUD-assisted housing providers to risk of 
violating the Fair Housing Act or other civil rights statutes. Non-
discrimination requirements are extensive, and compliance with these 
proposed regulations does not mean that compliance is achieved under 
civil rights laws. However, these regulations should make it clearer 
and easier for program participants such as owners and PHAs to develop 
narrowly tailored policies that fulfill the housing mission of 
providing safe, affordable homes with improved compliance with fair 
housing and nondiscrimination obligations.

VI. Summary of Proposed Rule

    Consistent with HUD's authority and to address the need for the 
regulation discussed above, HUD is proposing changes to 24 CFR parts 5, 
245, 882, 960, 966, and 982. Part 5 applies generally to HUD programs; 
however, subpart I, Preventing Crimes for Federally Assisted Housing--
Denying Admission and Terminating Tenancy for Criminal Activity or 
Alcohol Abuse, does not apply to the Public Housing or HCV programs. 
Program-specific provisions related to denial of admissions and 
termination of tenancy similar to those in part 5, subpart I, are 
included in the Moderate Rehabilitation Program, public housing, and 
HCV regulations (Section 8 Moderate Rehabilitation Program (24 CFR part 
882), Public Housing Program (24 CFR parts 960 and 966), and Section 8 
Tenant-Based Assistance: Housing Choice Voucher Program (24 CFR part 
982)). Part 5, subpart J applies to PHAs that administer public housing 
and Section 8 programs.
    Throughout the proposed changes, HUD, where possible and where not 
contradicted by statute, uses person-centered language that describes 
an individual's behavior rather than labeling that individual. To that 
end, this proposed rule would amend language that references ``alcohol 
abusers'' and ``drug criminals'' and instead use the language ``alcohol 
abuse'' and ``drug-related criminal activity.'' HUD also proposes 
consistent language and cross-references throughout the regulations.
    With respect specifically to the term ``alcohol abuse'', HUD 
recognizes that some agencies, advocates, and members of the disability 
and medical communities have moved away from the term ``alcohol abuse'' 
towards alternatives such as ``alcohol use disorder,'' ``excessive 
alcohol use,'' or ``alcohol use'' due to stigma associated with the 
term ``alcohol abuse.'' \108\ HUD considered these alternatives while 
drafting this proposed rule but has elected not to adopt any of them at 
this time. The term ``alcohol abuse'' is taken directly from statutory 
language in QHWRA, which permits denial of admission or eviction from 
federally assisted housing in a situation where ``abuse (or pattern of 
abuse) of alcohol . . . interfere[s] with the health, safety, or right 
to peaceful enjoyment of the premises by other residents.'' \109\ In 
other words, ``alcohol abuse'' is a term of art used to describe a 
category of conduct that can justify exclusion from housing. It has 
been construed in case law and carried forward in numerous regulatory 
provisions, subregulatory guidance, and leases. Any replacement term, 
unless substantively identical, would alter the scope of the conduct 
that permits exclusion and create questions about how to reconcile the 
rule with the governing statutes.
---------------------------------------------------------------------------

    \108\ Nat'l Inst. on Drug Abuse, Words Matter--Terms to Use and 
Avoid Using When Talking About Addiction (Nov. 29, 2021), https://nida.nih.gov/nidamed-medical-health-professionals/health-professions-education/words-matter-terms-to-use-avoid-when-talking-about-addiction (suggesting that the term ``abuse'' should be 
avoided because it has a high association with negative judgments 
and punishment).
    \109\ 42 U.S.C. 13661(b)(1)(B), 13662(a)(2).
---------------------------------------------------------------------------

    HUD has considered using different terms, for example, ``excessive 
alcohol use'' and ``alcohol use'' in this proposed rule but has 
declined to do so because they are broader than ``alcohol abuse.'' 
Consequently, substituting these terms would expand the category of 
conduct that permits exclusion, contrary to the purposes of this 
proposed rule, and may lead to more admission denials and evictions 
than were intended by QHWRA's statutory language.
    HUD has also contemplated using the term ``alcohol use disorder'' 
as an alternative to ``alcohol abuse,'' as some federal agencies have 
begun using because of its clinical definition.\110\ However, not only 
is this term inconsistent with the statutory language in QHWRA, but it 
also creates confusion in the fair housing context, because individuals 
with alcohol use disorder are people with a disability under the Fair 
Housing Act, Americans with Disabilities Act, and the Rehabilitation 
Act of 1973. Using a term as the standard for permitting exclusion that 
is also a recognized disability could create problems harmonizing this 
standard with the analysis required under the civil rights laws. HUD 
seeks public comment specifically on the issue of the continued use of 
the term ``alcohol abuse'' (see ``Questions for public comment,'' 
infra, Section VII, #11).
---------------------------------------------------------------------------

    \110\ Nat'l Inst. on Alcohol Abuse & Alcoholism, Understanding 
Alcohol Use (Apr. 2023), https://www.niaaa.nih.gov/sites/default/files/publications/Alcohol_Use_Disorder_0.pdf (highlighting that 
``alcohol use disorder'' is a medical condition listed in the 
Diagnostic and Statistical Manual of Mental Disorders, Fifth 
Edition, that encompasses ``alcohol abuse,'' among other 
conditions).
---------------------------------------------------------------------------

    HUD also proposes at various places to include ``PHA employees'' or 
``property employees'' among those meant to be protected from 
threatening activity. The Housing Act of 1937 and QHWRA both evince a 
desire to include these employees among those intended to be protected 
from threatening activity, but they are not uniformly included in the 
existing regulations.
    HUD also proposes to add the following definitions to Sec.  5.100: 
``Criminal history'', ``Criminal record'', ``Currently engaging in or 
engaged in'', ``Individualized assessment'', and ``Preponderance of the 
evidence.'' These terms are discussed throughout this section where 
appropriate. With respect to the term ``Currently engaging in or 
engaged in'', HUD seeks specific comment on certain aspects of the 
proposed definition (see ``Questions for public comment,'' infra, 
section VII, #1).

A. Part 5: Individualized Assessment

    To increase access to covered housing programs, this proposed rule 
would require that housing providers conduct an individualized 
assessment of each individual whose suitability is under question based 
on the existence of a criminal history. Though the individualized 
assessment requirement would apply slightly differently to different 
programs and circumstances due to statutory and programmatic 
differences, HUD intends to increase access to HUD's programs by 
applying the new individualized assessment process.
    This rule proposes to amend 24 CFR part 5 by adding a definition of 
``individualized assessment'' to Sec.  5.100. The definition would 
provide that the purpose of the ``individualized assessment is to 
determine the risk that an applicant will engage in conduct that would 
adversely affect the health, safety, and peaceful enjoyment of the 
premises by other residents, the owner, or property employees.'' As 
proposed, HUD's definition of ``individualized assessment'' would 
require holistic consideration of ``multiple points of information'' 
that may include a criminal history but also relevant

[[Page 25348]]

mitigating factors, including but not limited to those set forth in 
Sec.  5.852(a)(1) and (2), and repeated in the public housing and 
voucher regulations as appropriate. In conjunction with the 
individualized assessment, HUD also proposes to define ``criminal 
history'' in Sec.  5.100 to mean an individual's past involvement with 
criminal activity or the criminal justice system, including but not 
limited to that reflected in a criminal conviction. Criminal history 
may include information that appears in an individual's criminal record 
but may also include information that is not part of that individual's 
criminal record. ``Criminal record'' is proposed to be defined as a 
history of an individual's contacts with law enforcement agencies or 
the criminal justice system. A criminal record may include details of 
warrants, arrests, convictions, sentences, dismissals or deferrals of 
prosecution; acquittals or mistrials pertaining to an individual; 
probation, parole, and supervised release terms and violations; sex 
offender registry status; and fines and fees.
    This proposed rule retains existing requirements in Sec.  5.851 
regarding authority to screen applicants for admissions and terminate 
tenants. HUD is proposing, however, to add a requirement that, where 
discretion exists to deny admission or terminate, a housing provider 
must consider certain circumstances listed in Sec.  5.852 before doing 
so based on the following circumstances: a criminal record, a finding 
of criminal activity, illegal drug use, or alcohol abuse. In the 
admissions context, the considerations listed in Sec.  5.852 must be 
considered as part of an individualized assessment.
    This proposed rule is not intended to affect existing discretion 
with respect to admissions, evictions, and terminations on other bases. 
Section 5.851(a)(1) provides that a criminal record may be considered 
only in the manner and for the purpose described in this regulation. 
Paragraph (a)(2) would require an individualized assessment in every 
instance a housing provider considers criminal activity in an 
admissions decision except in circumstances where a statute requires 
denial of admission based on criminal history. Paragraph (a)(2)(i) 
would provide that such criminal activity, if determined relevant, may 
be considered only alongside the relevant mitigating factors, including 
the factors listed at Sec.  5.852(a). HUD seeks public comment 
specifically on whether it should provide additional specificity in the 
final rule or in subsequent guidance on this requirement (see 
``Questions for public comment,'' infra, Section VII, #5).
    Section 5.851(a)(2)(ii) would provide that an arrest record alone 
may not be the basis for a determination that an individual has engaged 
in criminal activity that warrants denial of admission; however, the 
underlying conduct leading to an arrest may be relevant to determine 
the applicant's risk to engage in such conduct provided there is 
sufficient evidence independent of the arrest itself that the conduct 
occurred.
    Section 5.851(b) would require that any termination based on 
criminal activity, illegal drug use, or alcohol abuse must be in 
accordance with the procedures and requirements of subpart I. Several 
of the specific protections discussed above are proposed to be 
expressly incorporated into relevant provisions in the regulations in 
the public housing and voucher provisions as discussed in more detail 
below.
    HUD's intent is to provide practical guidance to assist housing 
providers with decisions regarding admissions and terminations that 
involve criminal history considerations. To that end, Sec.  5.852(a)(1) 
outlines factors for a housing provider to consider in the admission 
context and the termination or eviction context. The factors listed in 
Sec.  5.852(a)(1) are meant to provide housing providers with a 
holistic view of the individual seeking housing or seeking to maintain 
housing. The factors are not all inclusive, and housing providers may 
consider other relevant mitigating circumstances.
    For an individualized assessment conducted for admissions purposes, 
Sec.  5.852(a)(1), the relevant factors that should be considered 
include, but are not limited to, the nature and circumstances of the 
conduct in question, including seriousness, impact on suitability for 
tenancy, and length of time that has passed since the conduct; the 
extent to which the applicant or relevant household member has 
attempted to mitigate the risk that admission would adversely affect 
the health, safety, and peaceful enjoyment of the premises by other 
residents, the owner, or property employees; whether the applicant 
would like the owner to consider mitigating circumstances related to a 
medical condition of a household member; whether, considering relevant 
evidence, there is reason to believe the conduct will recur and rise to 
the level that it will interfere with the health, safety, or right to 
peaceful enjoyment of the premises by others; and whether further 
considerations must be made in order to comply with the obligation to 
consider and provide reasonable accommodations to persons with 
disabilities.
    For terminations or evictions, relevant factors that housing 
providers should consider under Sec.  5.852(a)(2) include the nature 
and circumstances of the conduct in question, including seriousness and 
impact on fitness for continued tenancy; the effect on the community 
and on other household members not involved in the conduct of 
termination or eviction or of inaction; whether the leaseholder or 
relevant household member was involved in the conduct and whether they 
have taken reasonable steps to prevent or mitigate the conduct; 
whether, considering relevant evidence, there is reason to believe the 
conduct will recur and rise to the level that it will interfere with 
the health, safety, or right to peaceful enjoyment of the premises by 
others; whether the applicant would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member; and whether further considerations must be made in order to 
comply with the obligation to consider and provide reasonable 
accommodations to persons with disabilities.
    The proposed rule provides at Sec.  5.851(a)(2)(ii) that the 
existence of an arrest record alone may not be the basis for a 
determination that an individual has engaged in criminal activity; 
however, actions that resulted in the arrest could be relevant as long 
as there is sufficient evidence, independent of the arrest, that the 
actions occurred, and other mitigating factors are considered.
    HUD also recognizes that there are statutory limits that dictate 
how housing providers treat criminal histories in certain 
circumstances.\111\ Where an individual is statutorily barred from 
admission or continued tenancy in a covered program, a housing provider 
is not required to conduct an individualized assessment or consider the 
above factors before denying them admission or terminating their 
tenancy.
---------------------------------------------------------------------------

    \111\ 42 U.S.C. 13663 bars admission to federally assisted 
housing for individuals who are subject to a lifetime registration 
requirement under a State sex offender registration program; 42 
U.S.C. 1437n(f) bars admission to and requires termination of 
individuals convicted of manufacturing or producing methamphetamine 
from public housing and Section 8-assisted housing.
---------------------------------------------------------------------------

    In Sec.  5.852(b), the proposed rule continues to give the housing 
provider the discretion to exclude a household member that the housing 
provider determined participated in or was culpable for an action or 
failure to act that warrants denial or termination. However, this rule 
would provide clarity that this determination must be

[[Page 25349]]

based on a preponderance of the evidence. HUD proposes to add a 
definition for ``preponderance of the evidence'' at Sec.  5.100, which 
would define the standard as more likely than not that a claim is true 
when all evidence is taken together and its reliability or 
unreliability is considered. This definition responds to the need for 
housing providers to have a clear, uniform standard with which to 
evaluate evidence underlying important decisions that have significant 
consequences on the future housing opportunities of tenants and 
prospective tenants.
    Section 5.852(b) also proposes that the duration of any such 
exclusion must not exceed the time period an individual could be denied 
admission based on the same action or failure to act. In addition, this 
section would provide that such an exclusion may not be based solely on 
the fact of an arrest. The conduct underlying an arrest may provide the 
basis for an exclusion, provided the housing provider can meet a 
preponderance of the evidence standard that the conduct occurred 
independent of the fact of the arrest.
    HUD proposes to remove current Sec.  5.852(c) regarding 
consideration of rehabilitation because it would be redundant with 
paragraphs (a)(1)(iv) and (a)(2)(vi).
    HUD also proposes to remove the language from Sec.  5.852(d) that 
allows an owner to prohibit admission for a period of time longer than 
that authorized by statute. HUD proposes parallel deletions of 
equivalent language in the public housing regulations at Sec.  
960.203(c)(3)(ii) of the current regulation and Sec.  
966.4(l)(5)(vii)(E), as HUD proposes to replace this with the creation 
of a three-year presumptive lookback period for criminal history (see 
discussion of lookback periods under A.2 of this section).
    The proposed paragraph (c) would revise current paragraph (e) and 
clarify that admission and eviction actions be consistent with 24 CFR 
part 5, subpart L, as well as the fair housing and equal opportunity 
provisions of Sec.  5.105 and would clarify that the Fair Housing Act's 
prohibitions against discrimination extend to third-party screening 
services or companies contracted by housing providers.
    Finally, HUD proposes to add a new paragraph (d) to address 
situations where an applicant fails to disclose criminal record 
information. The provision would provide that except in those 
circumstances where a PHA or owner solely relies on self-disclosure in 
reviewing an applicant's criminal record, the PHA or owner may deny 
admission for failure to disclose a criminal record only if that 
criminal record would be material to an admissions decision pursuant to 
this rule and the PHA's or owner's admissions standards. For criminal 
history information that is material to an admissions decision, the PHA 
may take the failure to disclose into account, along with other factors 
set out in this rule, in determining whether that criminal record 
warrants denial of admission. Parallel provisions are proposed to be 
added at Sec. Sec.  960.203(d) and 982.552(f).
1. Drug-Related Criminal Activity and Illegal Drug Use Sec. Sec.  
5.854, 5.858
    Section 5.854 addresses the admission of individuals who have 
engaged in drug-related criminal activity or illegal drug use. However, 
the currently codified title of the section does not include reference 
to ``illegal drug use.'' To provide clarity as to the scope of the 
application of this section, HUD proposes to revise the title of this 
section to add ``illegal drug use.'' Paragraph (a) of this section 
provides that housing providers must prohibit the admission of an 
applicant for three years following an eviction from federally assisted 
housing for drug-related criminal activity as required by 42 U.S.C. 
13661(a). This proposed rule would clarify Sec.  5.854(a)(1), by 
providing that a housing provider may admit a household member who 
engaged in drug-related criminal activity if the person is 
participating in or has successfully completed a substance use 
treatment service. The proposed rule would remove reference to ``an 
approved supervised drug rehabilitation program'' as the only basis for 
admittance so that the language is more closely aligned with the 
statute. HUD also proposes a minor change to paragraph (b) of this 
section to clarify that ``illegal use of a drug'' that threatens the 
health, safety, or right to peaceful enjoyment of the premises by 
``property employees,'' and not only other residents or property 
employees, may be a basis for denying admission.
    HUD proposes to revise Section 5.858, which addresses the eviction 
of tenants who have engaged in drug-related criminal activity or 
illegal drug use, in a number of ways. Because the title of the section 
does not include reference to ``illegal drug use,'' HUD proposes to 
revise the title of this section to add ``illegal drug use'' to clarify 
the scope of the application. HUD proposes to further clarify this 
section by revising Sec.  5.858 into paragraphs (a) and (b) to more 
clearly make the distinction between the relevant lease provisions 
applicable to drug-related criminal activity versus illegal drug use. 
HUD also proposes to insert the word ``potential'' before ``grounds for 
you to terminate tenancy'' to make clear that the stated actions need 
not automatically result in evictions. Finally, HUD proposes to clarify 
that a housing provider may consider the health and safety of 
``property employees'' when determining whether to evict a family based 
on a household member's illegal use of a drug or a pattern of illegal 
use.
2. Other Criminal Activity Sec.  5.855
    Section 5.855 addresses when a housing provider is allowed to 
prohibit admission to a housing program based on criminal activity 
other than that covered in Sec.  5.854. This proposed rule would revise 
Sec.  5.855(a) to clarify that the list of situations in which a 
housing provider has discretion to prohibit admission of a household 
member on the basis of criminal activity is an exclusive list. HUD 
would keep Sec.  5.855(a)(1) and (2) unchanged (drug-related criminal 
activity and violent criminal activity) but would limit the remaining 
activities to situations where the health, safety, and right to 
peaceful enjoyment of residents or the health or safety of the PHA, 
owner, employee, contractor, subcontractor, or agent of the PHA or 
owner who is involved in the housing operations is actually threatened.
    Section 5.855(b) provides that a housing provider may establish a 
reasonable period of time (a so-called ``lookback period'') before an 
admission decision during which an applicant must not have engaged in 
the activities enumerated in paragraph (a). While housing providers 
would continue to exercise discretion in setting lookback periods, this 
rule proposes to place a limit on what would be a reasonable period of 
time for lookbacks. Specifically, HUD proposes that ``prohibiting 
admission for a period of time longer than three years following any 
particular criminal activity is presumptively unreasonable.'' This 
section would also permit a housing provider to impose a longer period 
of time for a lookback, but only after a determination, based on 
empirical evidence, that a longer period of time is necessary to ensure 
the health, safety, and peaceful enjoyment of other tenants or property 
employees. An example of empirical evidence in this context may include 
data gathered through qualitative and/or quantitative research that is 
made the subject of a published, peer-reviewed study. HUD would provide 
other potential examples

[[Page 25350]]

through subregulatory guidance. The proposed rule does not provide that 
three years will always be a reasonable period of time, only that a 
time longer than three years is presumptively unreasonable. Parallel 
provisions are proposed at Sec. Sec.  882.518(b)(2), 882.519(e)(2), 
960.204(c)(2), and 982.553(a)(4)(ii)(B). HUD intends that, under the 
proposed rule, a housing provider may determine that a time less than 
three years is the reasonable lookback period for some or all activity. 
Any discretionary decision to deny admission based on activity 
occurring within the lookback period also would have to occur in 
accordance with the individualized assessment described elsewhere in 
this proposed rule.
    In Sec.  5.855(c), HUD proposes requiring PHAs and HUD-assisted 
housing providers to provide notice of the proposed action and a copy 
of any relevant criminal record to the subject of the criminal record 
and the applicant (except where otherwise prohibited by law) no less 
than 15 days prior to a notification of denial. The notification must 
inform the household that it has the opportunity to dispute the 
accuracy and relevance of the criminal record as well as the 
opportunity to present any relevant mitigating information, which the 
housing provider must consider. HUD specifically seeks comment on the 
proposed 15-day timeframe and whether the proposed process would 
adequately balance the needs of applicants and PHAs and HUD-assisted 
housing providers (see ``Questions for public comment,'' infra, Section 
VII, #3).
    In Sec.  5.855(d), HUD proposes that all determinations to deny 
admission under Sec.  5.855 must be supported by a preponderance of the 
evidence, as defined by Sec.  5.100. This section would also provide 
that the fact of an arrest could not be the basis for determining that 
an individual engaged in criminal activity but the conduct that 
resulted in the arrest can be such a basis provided there is sufficient 
evidence independent of the arrest that the conduct occurred, subject 
to the lookback period. Section 5.855(e) would be revised to make it 
clear that no applicant that was previously denied admission based on 
criminal activity shall be prohibited from applying for assistance, and 
that a HUD-assisted housing provider must not deny the application 
based solely on the prior denial.
3. Alcohol Abuse Sec.  5.857
    In Sec.  5.857, HUD proposes to remove ``you have reasonable cause 
to believe'' from the description of the standard that a housing 
provider must meet to show that a household member's abuse or pattern 
of abuse of alcohol interferes with the health, safety, or right to 
peaceful enjoyment of the premises by other residents. HUD is proposing 
this deletion because it believes it to be consistent with the 
preponderance of the evidence standard used throughout these 
regulations. The proposed deletion would avoid confusion that these 
standards are different. Parallel deletions are proposed at Sec. Sec.  
882.518(a)(1)(iii) and (b)(4), 960.204(a)(2)(ii) and (b), and 
982.553(a)(2)(ii)(B) and (a)(4)(C)(3). HUD also clarifies that the 
health and safety provision applies to a property employee.
4. Evictions on the Basis of Criminal Activity Sec.  5.861
    Currently, Sec.  5.861 provides that in order to evict an existing 
tenant based on criminal activity, a housing provider may do so 
regardless of whether the person has been arrested or convicted of such 
activity and without satisfying a criminal conviction standard of 
proof. This proposed rule would change the focus of this provision to 
the evidentiary standard that the housing provider does have to meet in 
order to evict, namely the preponderance of the evidence standard, 
which HUD believes is a more helpful articulation of the applicable 
rule. HUD continues to believe this standard can be met regardless of 
whether a person has been arrested or convicted, and by definition it 
can be met without satisfying a criminal conviction standard of proof. 
While this proposed rule does not change the substance of this 
pronouncement, in HUD's experience, clarifying specific limits is more 
helpful to ensure compliance with applicable laws than what this 
regulation currently does. Therefore, and also in keeping with the 
principles discussed in the preamble, this proposed rule would change 
the focus of this provision. HUD would eliminate the above-referenced 
language and provide that the housing provider may terminate tenancy 
and evict based on criminal activity if the housing provider determines 
that the covered person has engaged in the criminal activity described 
in subsections 5.858 and 5.859.

B. Part 5: Criminal Records

    As specified in 24 CFR 5.901, part 5, subpart J, of HUD's 
regulations addresses access to and use of criminal conviction records 
and sex offender registry information obtained from law enforcement 
agencies. However, these regulations do not apply to access to and use 
of other criminal records, such as records obtained from third party 
screening companies and records of arrest or other criminal history 
information from law enforcement agencies. HUD is aware that 
increasingly, PHAs and owners are considering records other than 
conviction and sex offender registry records obtained directly from law 
enforcement agencies. Although this information has the potential to be 
less accurate, reliable, and instructive, this information is currently 
the least regulated by HUD's program regulations.
    This proposed rule would therefore amend certain sections of 
subpart J in order to cover all criminal records, emphasize the limited 
circumstances in which HUD believes criminal records should be relevant 
in an admission or termination decision and to strengthen an 
individual's right to dispute their accuracy and relevance in such a 
decision. HUD proposes adding a new definition for ``criminal record'' 
to Sec.  5.100, which would include a variety of interactions with the 
criminal justice system including arrests, warrants, conviction, 
sentencing, dismissals or deferrals of prosecution, not-guilty 
verdicts, and probation, parole, and supervised release violations.
    Section 5.901(a) would be amended to clarify that subpart J applies 
when criminal records are obtained from a law enforcement agency or any 
other source for consideration in admission, lease enforcement, or 
eviction. Language would also be added to emphasize that PHAs and 
owners are not required to review an individual's criminal records 
beyond the extent necessary to satisfy statutory requirements.
    Section 5.903(f) governs an individual's opportunity to dispute the 
accuracy and relevance of a criminal record of conviction obtained by a 
PHA from a law enforcement agency that may be used to deny their 
admission or evict them from federally assisted housing. The proposed 
rule would revise Sec.  5.903 to provide that when a PHA obtains any 
criminal record, either under Sec.  5.901(a) or by request of an owner 
under Sec.  5.903(d), the PHA must notify the subject of the record and 
the applicant or tenant (except where otherwise prohibited by law) of 
the proposed action to be taken based on the record and give them an 
opportunity to dispute the accuracy and relevance of the record. The 
PHA would be required to provide this opportunity at least 15 days 
before a denial of admission, eviction or lease enforcement action 
based on such information. This proposed rule would also add a new 
paragraph (f)(2) to this section that would outline an individual's 
rights when an owner of

[[Page 25351]]

federally assisted housing obtains criminal record information from 
anywhere other than a PHA. Specifically, the owner must notify the 
subject of the record and the applicant or tenant if the owner obtains 
a criminal record relevant to admissions or continued tenancy and 
provide an opportunity to dispute the accuracy and relevance of the 
criminal conviction record before a denial of admission, lease 
enforcement action, or eviction. Such opportunity must be provided at 
least 15 days before any of the three foregoing decisions. Consistent 
with these changes in Sec.  5.903, HUD proposes similar revisions to 
Sec.  5.905(d) concerning notice and opportunity to dispute sex 
offender registration information. Finally, HUD proposes to revise 
Sec.  5.903(g), which deals with records management, by deleting the 
phrase ``from a law enforcement agency,'' since all records should be 
afforded the safeguards set out in paragraph (g), regardless of their 
source.
    This proposed rule would also add a new Sec.  5.906 to ensure 
consistency of tenant selection plans and the regulations proposed in 
this rule and with any non-conflicting state or local law providing 
protections for people with criminal records. Proposed paragraph (a) 
would require owners of federally assisted housing--except owners of 
properties receiving tenant-based assistance and project-based voucher 
and moderate rehabilitation owners--to amend their tenant selection 
plan within six months of the effective date of the final rule to make 
such plan consistent with amended 24 CFR part 5. Under proposed 
paragraph (b), owners would be prohibited from considering the 
existence of a criminal record in the admissions process or in the 
termination of tenancy process except as specified in this proposed 
rule. HUD is proposing this paragraph to make it clear that overall 
compliance is required as of the effective date of the regulation, even 
if the requirement to amend Tenant Selection Plans under paragraph (a) 
is subject to the 6-month delay in effective date. HUD seeks public 
comment specifically on whether the six months proposed for amendment 
of the tenant selection plan is reasonable (see ``Questions for public 
comment,'' infra, Section VII, #6).

C. Part 245: Tenant Organizations

    This proposed rule would amend part 245, subpart B--Tenant 
Organizations. Specifically, the proposed rule would revise existing 
paragraph (b) and redesignate existing paragraphs (b) and (c) of Sec.  
245.115. Paragraph (b)(1) would provide that owners covered under Sec.  
245.10 must make their tenant selection plans available to the public 
and specifies the acceptable manner in which this may be done, 
including by posting on its website or social media account(s), in a 
conspicuous location and accessible format, where applicable. Parallel 
provisions have been proposed at Sec. Sec.  882.514(a)(2), 
960.202(c)(2), and 982.54(b).
    Proposed paragraph Sec.  245.115(b)(2) would require that tenants 
be notified of proposed substantive changes to the tenant selection 
plan and be provided the right to inspect and copy such changes for 30 
days following notification. This opportunity would extend to any legal 
or other representatives acting for tenants individually or as a group. 
During the 30-day inspection period, the owner would be required, 
during normal business hours, to provide a place reasonably convenient 
to the tenants where they may inspect and copy the materials in 
question.
    Paragraph (b)(3) of this section would give tenants the right to 
draft written comments on the proposed changes to the tenant selection 
plan, with or without the help of tenant representatives, and submit 
them to the owner and to the local HUD office. This proposed change is 
consistent with HUD's recognition of the importance of ensuring tenants 
have a voice in how their homes are managed and would increase 
incentives to owners to update their tenant selection plans as needed 
to reflect program requirements and best practices. Additionally, by 
providing tenants with visibility into tenant selection policies, HUD 
believes that tenants will play a role in holding owners accountable 
for policies such as the proposed requirement to perform an 
individualized assessment prior to making a determination based on 
criminal records. HUD seeks public comment on whether owners should be 
required to respond to comments received from tenants (see, ``Questions 
for public comment'', infra, Section VII, #9).

D. Part 882: Moderate Rehabilitation

    This proposed rule would revise the regulations governing the 
Moderate Rehabilitation Program, located in part 882, subpart E, to 
reflect the changes in part 5 above as they apply to the Moderate 
Rehabilitation program. As noted above, Sec.  882.514(a)(2) would be 
revised to provide for transparency with respect to tenant selection 
policies.
1. Individualized Assessment
    The proposed rule would make several changes to Sec.  882.518. 
Paragraph (a)(1) would be redesignated as paragraph (2) and new 
paragraph (a)(1) would clarify that an arrest record alone may not be 
the basis for a determination that an individual has engaged in 
criminal activity that warrants denial of admission; however, the 
underlying conduct leading to an arrest may be relevant to determine 
the applicant's risk to engage in such conduct provided there is 
sufficient evidence independent of the arrest itself that the conduct 
occurred, and would require that where a criminal activity is 
determined to be relevant it must be considered alongside the factors 
in Sec.  882.518(a)(1)(ii) and other relevant mitigating factors. 
Paragraph (a)(1)(ii) of this section would also provide the list of 
mitigating factors related to admissions from Sec.  5.852(a)(1), which 
must be considered as part of an individualized assessment.
2. Admissions
    The proposed rule would amend redesignated Sec.  882.518(a)(2) by 
revising its title to cover drug-related criminal activity rather than 
``drug criminals.'' To align with the revisions proposed to Sec.  
5.854, the language of Sec.  882.518(a)(2)(A) and (B) would be revised 
to substitute ``substance use treatment service'' for ``approved 
supervised drug rehabilitation program'' (in (A)) and ``household 
member who engaged in the criminal activity'' for ``criminal household 
member'' (in (B)). This proposed revision is an expansion of the 
existing statutory provision that allows a PHA to nonetheless admit the 
household if, among other things, the household member who engaged in 
drug-related criminal activity and whose tenancy was terminated has 
successfully completed substance use treatment services.
    HUD is also proposing changes to Sec.  882.518(a)(2)(iii), which 
currently requires that a PHA establish standards that prohibit 
admission of a household to a PHA's program if the PHA determines that 
any household member is currently engaging in illegal use of a drug, or 
if the PHA determines that it has ``reasonable cause to believe'' that 
a household member's illegal use or pattern of illegal use of a drug 
``may'' threaten the health, safety, or right to peaceful enjoyment of 
the premises by other residents. First, HUD proposes to delete the 
phrase ``that it has reasonable cause to believe'' to be consistent 
with the preponderance of the evidence standard used throughout these 
regulations. The proposed deletion would avoid confusion that these 
standards are different. Second, HUD proposes replacing the word 
``may'' in this paragraph with ``would,'' to prevent

[[Page 25352]]

an overly broad reading of ``may'' in this context, which could lead to 
speculative admissions determinations HUD does not believe were 
intended by this language. Third, HUD is incorporating a cross-
reference to the newly proposed definition of ``currently engaging in 
or engaged'' in Sec.  5.100 to clarify when the applicant is currently 
engaging in the use of an illegal drug. Lastly, in this paragraph, HUD 
would add that any determination must take into account any relevant 
information submitted by the household, such as whether the household 
member is currently receiving or has successfully completed substance 
use treatment services.
    Section 882.518(b)(1) addresses the authority a PHA has to deny 
admission on the basis of other criminal activity. The revisions 
proposed by this rule mirror those in Sec.  5.585 and provide that a 
PHA may only deny admission based on criminal activity if it determines 
by a preponderance of the evidence that the individual is currently 
engaging in criminal activity or engaged in criminal activity during a 
reasonable time before the admission decision as those terms would be 
defined in Sec.  5.100. Other criminal activity must be criminal 
activity that would actually threaten residents, owner, employee, 
contractor, subcontractor or agent of the owner who is involved in the 
owner's housing operations. Paragraph (b)(2) of this section, which 
provides that the PHA may prohibit admission based on criminal activity 
only for a reasonable time, would be revised to include the three-year 
presumptively reasonable lookback period previously discussed.
    HUD proposes to revise Sec.  882.518(b)(3) which would provide that 
except in those circumstances where a PHA solely relies on self-
disclosure in reviewing an applicant's criminal record, the PHA may 
deny admission for failure to disclose a criminal record only if that 
criminal record would be material to an admissions decision pursuant to 
this rule and the PHA's or owner's admissions standards. HUD also 
proposes in Sec.  882.518 to redesignate paragraph (b)(4) as paragraph 
(b)(5). New paragraph (b)(4) would explain that no applicant that was 
previously denied admission shall be prohibited from applying for 
assistance, and that PHAs may not deny applications based solely on 
prior denials. This section would be revised, in line with part 5, to 
provide that the fact that there has been an arrest is not a sufficient 
basis for the determination that the relevant individual engaged in 
criminal activity, but the conduct that resulted in the arrest can be 
such a basis provided there is sufficient evidence that it occurred 
independent of the fact of the arrest.
    Redesignated paragraph (b)(5) currently requires a PHA to establish 
standards that prohibit admission on the basis of alcohol abuse. Like 
the changes in part 5, the proposed rule provides that the PHA must 
determine the applicant's abuse of alcohol would threaten the health, 
safety, or right to peaceful enjoyment of the premises of residents or 
PHA employees. Similarly, HUD proposes to make changes to paragraph 
(b)(1)(iv) which currently states that PHAs may prohibit admission of a 
household to a PHA's program if the PHA determines that any household 
member is currently engaging in, or has engaged in during reasonable 
time before the admission, other criminal activity which ``may'' 
threaten the health or safety of the owner or any employee, contractor, 
subcontractor or agent of the owner who is involved in the owner's 
housing operations. HUD proposes replacing the word ``may'' in this 
paragraph with ``would'' to prevent an overly broad reading of ``may'' 
in this context, which could lead to speculative admissions 
determinations HUD does not believe were intended by this language.
    Redesignated paragraph (b)(6), consistent with part 5, subpart J, 
would provide that before a PHA denies admission based on criminal 
activity, it must notify the household of the proposed action and 
provide a copy of any relevant criminal record (except where otherwise 
prohibited by law) no less than 15 days prior to the denial, and 
expressly provides an equivalent protection to that proposed in Sec.  
5.851, that a criminal record may be considered only if it is accurate 
and relevant to determining the risk that an applicant would threaten 
the health, safety, or right to peaceful enjoyment of residents or PHA 
employees. The provision would provide an opportunity to dispute the 
accuracy and relevance of the criminal record and to present any 
mitigating evidence. In addition, paragraph (b)(6) would provide the 
list of mitigating factors related to admissions from Sec.  
5.852(a)(1), which must be considered as part of an individualized 
assessment, and this section would also provide that if the PHA decides 
to deny admission following the individualized assessment, the PHA must 
notify the family of its decision and that the family may request an 
informal hearing in accordance with Sec.  882.514(f).
3. Denial and Terminations
    New paragraph (c)(1) of Sec.  882.518 proposes that for 
terminations or evictions, relevant factors that PHAs should consider 
under Sec.  5.852(a)(2) include the nature and circumstances of the 
conduct in question, including seriousness and impact on fitness for 
continued tenancy; the effect on the community and on other household 
members not involved in the conduct of termination or eviction or of 
inaction; whether the leaseholder was involved in the conduct and 
whether they have taken reasonable steps to prevent or mitigate the 
conduct; whether, considering relevant evidence, there is reason to 
believe the conduct will recur and rise to the level that it will 
interfere with the health, safety, or right to peaceful enjoyment of 
the premises of other residents or property employees; whether the 
applicant would like the owner to consider mitigating circumstances 
related to a medical condition of a household member; and whether 
further considerations must be made in order to comply with the 
obligation to consider and provide reasonable accommodations to persons 
with disabilities.
    The proposed rule would amend redesignated paragraph (c)(2) 
consistent with the changes in Part 5. Specifically, the proposed rule 
would revise the term ``drug criminals'' to ``drug-related criminal 
activity,'' change ``interferes with'' to ``threatens,'' specify when 
the text is discussing illegal drug use, add ``property employees'' to 
the list of individual whom a tenant's illegal drug use may threaten 
and give rise to cause to evict, allow the PHA to admit a household 
member who engaged in drug-related criminal activity if the person is 
participating in or has successfully completed a substance use 
treatment service, and reference the definition of ``currently engaging 
in or engaged in'' at Sec.  5.100. Similar to the proposed revisions in 
Sec.  882.518(a)(1), paragraph (d) would be revised in line with part 
5, to provide that the fact that there has been an arrest is not a 
sufficient basis for the determination that the individual engaged in 
criminal activity, but the conduct that resulted in the arrest can be 
such a basis provided there is sufficient evidence that it occurred 
independent of the fact of the arrest.
    The proposed rule would also revise Sec. Sec.  882.511 and 882.514 
to require that the owner follow Sec.  882.519 for actions or potential 
actions to terminate tenancy, or deny tenancy on the basis of criminal 
activity, illegal drug use, of alcohol abuse. HUD proposes to remove in 
Sec.  882.514(c) the provision that an owner may refuse any family, 
provided that the owner does not unlawfully discriminate. In addition, 
HUD would

[[Page 25353]]

revise Sec.  882.514(a)(2) by clarifying that the PHA's tenant 
selection policies should be publicized by posting copies in each 
office where applications are received and by making available copies 
to applicants or tenants for free upon request. Paragraph (a)(2) would 
also clarify that these policies can be posted on the PHA's website 
and/or its social media account(s), in a conspicuous location and an 
accessible format, where applicable. Lastly, HUD proposes to revise 
Sec.  882.514(f) by removing the outdated reference to the informal 
review provisions for the denial of a Federal selection preference 
under Sec.  882.517(k).
    The proposed rule would also add a new section, Sec.  882.519. 
Proposed Sec.  882.519(a) would reflect changes in part 5 by adding the 
requirement that where discretion exists to deny admission or 
terminate, an owner must consider certain circumstances listed in Sec.  
882.519 before doing so based on the following circumstances: a 
criminal record, a finding of criminal activity, illegal drug use, or 
alcohol abuse. In the admissions context, the considerations listed in 
Sec.  882.519 must be considered as part of an individualized 
assessment. Section 882.519(a)(2) would require an individualized 
assessment in every instance an owner considers criminal activity in an 
admissions decision. Paragraph (a)(2)(i) of this section would provide 
that such criminal activity may be considered only if it is relevant to 
determining the risk that an applicant will interfere with or adversely 
affect the health, safety, or right to peaceful enjoyment of residents 
or property employees. Paragraphs (a)(2)(ii) and (iii) of this section 
would require that where a criminal activity is determined to be 
relevant, it must be considered alongside the factors in Sec.  
882.519(b) and other relevant mitigating factors, and that an arrest 
record alone may not be the basis for a determination that an 
individual has engaged in criminal activity that warrants denial of 
admission; however, the underlying conduct leading to an arrest may be 
relevant to determine the applicant's risk to engage in such conduct 
provided there is sufficient evidence independent of the arrest itself 
that the conduct occurred.
    Like part 5, Sec.  882.519(b)(1) would provide the list of 
mitigating factors related to admissions from Sec.  5.852(a)(1), which 
must be considered as part of an individualized assessment. Paragraph 
(b)(2) of this section would list the circumstances relevant to a 
particular termination or eviction that an owner must take into account 
before exercising discretion to terminate or evict based on a criminal 
record, illegal drug use, or alcohol abuse. Proposed Sec.  882.519(c) 
would give the owner discretion to exclude a household member that the 
owner determined, based on a preponderance of the evidence, 
participated in or was culpable for an action or failure to act that 
warrants denial or termination. In addition, HUD proposes to add Sec.  
882.519(d) which would provide that except in those circumstances where 
a PHA solely relies on self-disclosure in reviewing an applicant's 
criminal record, the PHA may deny admission for failure to disclose a 
criminal record only if that criminal record would be material to an 
admissions decision pursuant to this rule and the PHA's or owner's 
admissions standards.
    Parallel to provisions proposed at Sec. Sec.  5.855(B), 
882.518(b)(2), 960.204(c)(2), and 982.553(a)(4)(ii)(B), HUD also 
proposes to add Sec.  882.519(e) which would provide that an owner may 
establish a reasonable period of time (lookback period) before an 
admission decision during which an applicant must not have engaged in 
the activities enumerated in this paragraph. An owner would continue to 
exercise discretion in setting lookback periods; however, this rule 
proposes to place a limit on what HUD believes is a reasonable period 
of time, which is a period of time no longer than three years following 
any particular criminal activity. The proposed rule does not provide 
that three years will always be a reasonable period of time, only that 
a time longer than three years is presumptively unreasonable. A housing 
provider can, however, overcome this presumption and impose a longer 
period of time but only after a determination, based on empirical 
evidence, that a longer period of time is necessary to ensure the 
health, safety, and peaceful enjoyment of other tenants or property 
employees.
    Section 882.519(e)(3) would be added to require that an owner 
provide notice of the proposed action and a copy of any relevant 
criminal record to the subject of the criminal record and the applicant 
(except where otherwise prohibited by law) no less than 15 days prior 
to a notification of denial. The notification must inform the household 
that it has the opportunity to dispute the accuracy and relevance of 
the criminal record as well as the opportunity to present any relevant 
mitigating information, which the housing provider must consider.
    Lastly, Sec.  882.518(e)(4) and (5) would be added to explain that 
no applicant that was previously denied admission shall be prohibited 
from applying for assistance, and that PHAs may not deny applications 
based solely on prior denials. This section would be added to align 
with part 5, to provide that the fact that there has been an arrest is 
not a basis for the requisite determination that the relevant 
individual engaged in criminal activity, but the conduct that resulted 
in the arrest can be such a basis provided there is sufficient evidence 
that it occurred independent of the fact of the arrest.

E. Part 960: Public Housing Program

    This proposed rule would revise the regulations governing admission 
to the Public Housing Program, codified in part 960, to reflect the 
revisions in part 5.
    The proposed rule would clarify, by adding a new Sec.  960.103(e), 
that nothing in part 960 is intended to pre-empt operation of State and 
local laws that provide additional protections to those with criminal 
records, but that State and local laws shall not change or affect any 
HUD requirement for administration or operation of the program. The 
proposed rule would also redesignate Sec.  960.202(c)(3) as (c)(4) and 
add language to new paragraph (c)(3) that would mirror the tenant 
selection policy transparency provision already discussed (see 
discussion of Sec.  245.118(b)(1)).
    The proposed rule would make several changes to Sec.  960.203. 
Paragraph (b) of this section would remove an obsolete provision that 
PHAs that successfully screen out applicants with criminal histories 
would receive points under Public Housing Assessment System (PHAS). In 
addition to being obsolete, the former provision was fundamentally at 
odds with the purpose of this proposed rule. Paragraph (c) of this 
section would be redesignated as paragraph (b) and revised in several 
ways. Redesignated paragraph (b)(3)(i) currently provides that a PHA 
may require an applicant to exclude a household member from residing in 
the unit in order to be admitted to the housing program where that 
household member has participated in or been culpable for actions 
described in Sec.  960.204 that warrant denial. HUD proposes to temper 
this provision by adding language limiting the duration of such 
exclusion to the time period an individual could be denied admission 
for that action or failure to act and requiring that the time period 
shall be reasonable in light of all relevant circumstances.
    Existing paragraph (c)(3)(ii), which allows a PHA to prohibit 
admission for a period of time longer than that authorized by statute, 
is proposed for deletion for the reasons discussed earlier (see 
discussion of Sec.  5.852(d)).

[[Page 25354]]

HUD proposes to replace it with a new paragraph (b)(3)(ii), which would 
be added to provide equivalent protections to those proposed in part 5 
in the public housing regulations.
    Existing paragraph (d) would be redesignated as paragraph (c) and 
would mirror the requirements of Sec.  5.852(a)(1) with respect to 
admissions decisions on the basis of a criminal record. Finally, 
proposed new paragraph (d) would mirror the provision previously 
discussed at Sec.  5.852(d) regarding an applicant's failure to 
disclose a criminal history.
    The rule proposes several changes to Sec.  960.204. HUD proposes to 
revise paragraph (a)(1)(i) of this section to clarify that a PHA may 
admit a household member evicted from federally assisted housing within 
three years of the date of the eviction if the PHA determines that the 
evicted household member is participating or has successfully completed 
substance use treatment services. HUD is proposing this revision in 
accordance with the waiver provision of 42 U.S.C. 13661(a), which does 
not require the bar when circumstances leading to the eviction no 
longer exist (which could include situations where the person who 
committed the drug offense leading to the eviction is in treatment). In 
addition, the Americans with Disabilities Act, prohibits public 
entities, such as PHAs, from discriminating against applicants with 
substance abuse disabilities who are not currently using illegal drugs 
and are currently participating in a supervised rehabilitation program, 
have successfully completed a supervised drug rehabilitation program, 
or have otherwise been rehabilitated successfully. 28 CFR 35.131; see 
42 U.S.C. 12210.
    HUD is also proposing changes to Sec.  960.204(a)(2)(i) and (ii). 
These provisions currently require that a PHA establish standards that 
prohibit admission of a household to a PHA's program if the PHA 
determines that any household member is currently engaging in illegal 
use of a drug, or if the PHA determines that it has ``reasonable cause 
to believe'' that a household member's illegal use or pattern of 
illegal use of a drug ``may'' threaten the health, safety, or right to 
peaceful enjoyment of the premises by other residents. First, HUD is 
incorporating a cross-reference to the newly proposed definition of 
``currently engaging in or engaged'' in Sec.  5.100 to clarify when the 
applicant is currently engaging in the use of an illegal drug. HUD also 
proposes to delete the phrase ``that it has reasonable cause to 
believe.'' HUD is proposing this deletion because it believes it to be 
consistent with the preponderance of the evidence standard used 
throughout these regulations. The proposed deletion would avoid 
confusion that these standards are different. HUD also proposes 
replacing the word ``may'' in this paragraph with ``would,'' to prevent 
an overly broad reading of ``may'' in this context, which could lead to 
speculative admissions determinations HUD does not believe was intended 
by this language.
    Similarly, HUD is proposing to revise Sec.  960.204(b) by deleting 
the reasonable cause to believe standard and requiring a determination 
that a household member's abuse of alcohol would threaten others for 
the reasons already discussed (see discussion of Sec.  5.857).
    HUD proposes to insert a new Sec.  960.204(c) in order to import a 
structure for permissive prohibition of admissions for criminal 
activities that is present in parts 882 and 982, but not currently in 
part 960. This proposed insertion also would provide a three-year 
presumptively reasonable lookback provision (see discussion of lookback 
periods under A.2 of this section).
    Mirroring the revisions in subpart J, HUD is proposing to revise 
redesignated Sec.  960.204(d) first, to expressly include a protection 
from part 5 (specifically, that a criminal record may be considered 
outside of the context of mandatory denials only if it is relevant to 
determining the risk that an applicant would threaten the health, 
safety, or right to peaceful enjoyment of residents or PHA employees) 
and second, to add additional detail to the notification requirements 
and to make clear that including a brief explanation regarding why the 
record may be relevant to the PHA's admission decision is part of what 
it means to provide an opportunity to dispute the accuracy and 
relevance of that record.
    The proposed rule would make a minor revision to Sec.  960.205; 
specifically, HUD proposes to include a cross reference to the 
definition of ``currently engaging in or engaged in'' at Sec.  5.100.

F. Part 966: Lease Requirements

    Part 966, subpart A, ``Public Housing Lease and Grievance 
Procedure,'' provides the requirements PHAs must include in their 
public housing leases and procedures governing the grievance process. 
This proposed rule would make several changes to this subpart to ensure 
that public housing lease terms and the hearing procedures are 
consistent with the principles and regulatory changes in parts 5, 960 
and 982. HUD also proposes an edit to Sec.  966.4(l)(2)(iv)(A) to 
correct an erroneous cross-reference.
    HUD proposes a number of changes to Sec.  966.4(l), which addresses 
termination of tenancy and eviction. In Sec.  966.4(l)(3), which 
governs lease termination notices, HUD is proposing only slight non-
substantive wording changes. These changes would clarify that the 
timeframes in these regulations specify the outer time limits for such 
notice to be provided and emphasize that the notice that must be 
provided within these timeframes must be ``adequate.'' At (l)(3)(ii), 
the regulation currently requires PHAs to ``state specific grounds for 
termination'' in the lease termination notice. While PHAs should 
already be including the specific lease provision at issue as part of 
stating the specific grounds for termination, the proposed language at 
966.4(l)(3)(ii) would add language ``and the specific lease provision 
at issue'' to make explicit this requirement.
    HUD also proposes to revise paragraph (l)(5)(iii) of this section, 
which deals with termination of tenancy on the basis of criminal 
activity, to incorporate the preponderance of the evidence standard 
discussed earlier to make clear that the fact of an arrest is not a 
basis for termination.
    This proposed rule would remove existing paragraph (l)(5)(vii)(A), 
which provides that PHAs that successfully screen out applicants with 
criminal histories would receive points under PHAS, for the reasons 
previously discussed (see discussion of Sec.  960.203(b) with respect 
to the removal of this language). HUD would revise paragraphs 
(l)(5)(vii)(A) and (B) to provide that a PHA may consider all 
circumstances relevant to a particular case. Again, mirroring part 5, 
the proposed rule would revise this paragraph to provide that an 
exclusion must be based on a preponderance of the evidence and that the 
duration of any exclusion must not exceed the time period an individual 
could be denied admission based on the same action or failure to act. 
The duration shall also be reasonable in light of all relevant 
circumstances, including but not limited to the excluded household 
member's age and relationship to other household members. In addition, 
the amendments would provide that such an exclusion may not be based 
solely on the fact of an arrest, though the conduct underlying an 
arrest may provide the basis for an exclusion. Likewise, the proposed 
rule would remove paragraph (l)(5)(vii)(D), which lists mitigating 
factors already discussed and paragraph (E), which allows extension of 
a statutory period of exclusion, for the same reasons discussed earlier 
regarding Sec.  5.852(d). Redesignated paragraph

[[Page 25355]]

(1)(5)(vii)(C) would be revised to clarify that admission and eviction 
actions must also be consistent with 24 CFR part 5, subpart L.
    Finally, the proposed rule would revise paragraph (m) to provide 
that the cost of copying any document in the PHA's possession that is 
directly relevant to a termination or eviction is on the PHA, and not 
the tenant. Additionally, HUD proposes to require the PHA to provide 
such copy at the PHA's expense. HUD proposes to make a similar revision 
to Sec.  966.56(b)(1).

G. Part 982: Housing Choice Voucher Program

    This proposed rule would revise the regulations governing admission 
to and continued occupancy in the Housing Choice Voucher Program, 
located in part 982, to incorporate and reflect the changes in part 5 
above.
    The proposed rule would make a slight revision to Sec.  982.53(d), 
to make it clear that State or local laws that provide additional 
protections to those with criminal records are among the laws that are 
not preempted by part 982. The proposed rule would revise Sec.  
982.54(b) to add language regarding transparency of tenant selection 
plans.
    The proposed rule would amend Sec.  982.301(b)(4), which governs 
the information required to be supplied to a family selected for 
tenancy, to require that the family be informed of the fact that a 
receiving PHA may not rescreen a family that moves under the 
portability procedures. The proposed revision includes a cross-
reference to Sec.  982.355(c)(9), where this requirement is proposed to 
be codified.
    The proposed rule would amend Sec.  982.306(c)(3), which currently 
provides that a PHA may disapprove an owner if the owner has engaged in 
any drug related or violent criminal activity but does not specify when 
that activity must have taken place. HUD proposes to add the 
requirement that a PHA may disapprove an owner only if the owner is 
currently engaging in the activity or has engaged in the activity 
during a reasonable time before the decision regarding approval. The 
rule would also make clear that a PHA may disapprove an owner for other 
criminal activity that would threaten the health, safety, or right to 
peaceful enjoyment of residents or PHA employees occurring during a 
reasonable time before the decision regarding approval.
    The proposed rule would also amend Sec.  982.306(c)(5), which 
currently allows a PHA to deny an owner based on the owner's history or 
practice of failing to terminate tenancies based on certain criminal 
activity of that tenant. The proposed language provides that a PHA may 
deny approval of an owner if the owner has a history or practice of 
refusing after an appropriate request from the PHA to take action to 
terminate certain tenancies. HUD believes this more limited authority 
better comports with the underlying statutory language, which 
authorizes the disapproval of an owner ``who refuses, or has a history 
of refusing,'' to take such action, 42 U.S.C. 1437f(o)(6)(C), as well 
as HUD's concern that owners not feel obligated to evict where they do 
not believe eviction is warranted and no one has asked them to do so.
1. PHA Admissions and Terminations Generally (Sec.  982.552)
    This proposed rule would make several targeted changes to Sec.  
982.552, which deals with PHAs' denial of admission or termination of 
assistance for a family generally. These proposed changes affect 
denials of admission or termination of assistance on grounds of 
criminal activity, illegal use of drugs, or alcohol abuse, and do not 
affect preexisting PHA discretion to deny admission or terminate 
assistance for other reasons.
    Section 982.552(c)(1) allows PHAs to deny admission or terminate 
assistance on various grounds. HUD would revise paragraph (c)(1) to 
remove the words ``at any time'', which are superfluous to the section. 
HUD would also revise paragraph (c)(1)(v) to clarify that money owed 
that is subject to a payment agreement in good standing is not grounds 
for denial or termination of assistance.
    Paragraph (c)(2)(i) of this section would be revised to require 
that with respect to those grounds that involve criminal activity, 
illegal drug use, and alcohol abuse, the requirements at Sec.  
982.553(a) and (b), which explicitly require the consideration of 
various mitigating circumstances, apply. Paragraph (c)(2)(ii) of this 
section would also be revised to clarify that a PHA's authority to 
exclude an adult family member who participated in the criminal 
activity may not extend beyond a longer time than they would otherwise 
be denied admission for the same conduct. HUD proposes to remove 
paragraph (c)(2)(iii), because this paragraph is incorporated into the 
considerations of mitigating circumstances. Finally, HUD proposes to 
add Sec.  982.552(c)(2)(v) to make explicit that a PHA may temporarily 
stay a termination hearing while criminal case proceedings for the 
underlying activity are pending.
2. Admissions (Sec. Sec.  982.307 and 982.553)
    The proposed rule would make several targeted revisions to Sec.  
982.307, which deals with tenant screening for the Housing Choice 
Voucher program. Section 982.307(a)(1) would be updated to provide that 
any PHA screenings of tenants must be conducted in accordance with 
Sec. Sec.  982.552 and 982.553, which will be discussed in more detail 
below. Paragraph (a)(3) would be updated to provide that any owner 
screenings of tenants must be conducted in accordance with the Fair 
Housing Act. Paragraph (a)(3)(iv) would be revised to clarify that 
``violent criminal activity'' is a type of criminal activity that must 
be screened for. In terms of the information a PHA may offer an owner 
about a family, paragraph (b)(2) would be revised to limit such 
information to information about the tenancy history of family members.
    The proposed rule would also make several changes to Sec.  982.553, 
which deals with when a PHA may deny admission on the basis of criminal 
activity, illegal drug use, or alcohol abuse. HUD proposes to insert a 
new paragraph (a)(1), which would expressly provide an equivalent 
protection to that proposed in part 5 with respect to the use of 
criminal records.
    HUD also proposes to insert a new paragraph (a)(2) requiring 
individualized assessment of relevant circumstances before denying 
admissions based on a criminal record, criminal activity, illegal drug 
use, or alcohol abuse, as discussed further in the above discussion on 
part 5.
    HUD's proposed revisions to Sec.  982.553 build on Sec.  982.552, 
as discussed above. HUD would amend Sec.  982.553(a)(2) (paragraph 
(a)(3) in this proposed rule) which addresses prohibiting admission on 
the basis of being evicted from federally assisted housing for drug 
related criminal activity. Specifically, HUD proposes new language at 
paragraph (a)(2)(i)(A) (paragraph (a)(3)(i)(A) in this proposed rule) 
that would clarify that the PHA is not required to prohibit admission 
for those who are currently enrolled in substance use treatment 
services, consistent with parallel changes to other program regulations 
explained above.
    Sec.  982.553(a)(3)(ii)(A) of this proposed rule would be revised 
to point to the definition of ``currently engaging in or engaged in'' 
in Sec.  5.100 for determining if an individual is currently engaging 
in the illegal use of a drug. Paragraph (a)(2)(ii)(B) of this section 
(paragraph (a)(3)(ii)(B) in this proposed rule) currently allows a PHA 
to admit a household member that has been

[[Page 25356]]

evicted from federally assisted housing for drug-related criminal 
activity, if the PHA determines that it has ``reasonable cause to 
believe'' that a household member's illegal drug use or pattern of 
illegal use of a drug ``may'' threaten the health, safety, or right to 
peaceful enjoyment of the premises by other residents. HUD proposes to 
add ``or PHA employees'' and to delete the phrase ``that it has 
reasonable cause to believe'' to be consistent with the preponderance 
of the evidence standard used throughout these regulations. The 
proposed deletion would avoid confusion that these standards are 
different.
    Additionally, consistent with changes in other parts, HUD proposes 
removing the word ``may'' in proposed Sec.  982.553(a)(3)(ii)(B) and 
(a)(4)(ii)(A)(3) and (4) to remove the speculative nature of the 
standard.
    Proposed Sec.  982.553(a)(4)(ii)(B) would be revised to provide, as 
discussed earlier, that a period of time longer than three years for a 
PHA to prohibit admission based on criminal activity is presumptively 
unreasonable and that a PHA may impose a longer prohibition period only 
after a PHA determination based on empirical evidence that a longer 
period it is necessary for the health, safety, and right to peaceful 
enjoyment of the premises of other residents or PHA employees.
    The language of redesignated Sec.  982.553(a)(4)(ii)(C) would be 
revised to make it clear that no applicant that was previously denied 
admission based on criminal activity shall be prohibited from applying 
for assistance, and that a PHA must not deny the application based 
solely on the prior denial. HUD proposes to remove Sec.  
982.553(a)(2)(ii)(C)(1) and (2) of the current regulation. These 
paragraphs are unnecessary with the addition of new paragraphs (a)(1) 
and (2). Finally, Sec.  982.553(a)(4)(ii)(C)(1) of this proposed rule 
would be revised to remove the ``reasonable cause'' standard, 
consistent with changes discussed above.
    HUD is also proposing changes to Sec.  982.553(d)(1), which 
provides procedural requirements for admissions denials in reliance on 
a criminal record. In such cases, the PHA must notify the family of the 
initial denial determination in accordance with the procedures in Sec.  
982.554. The notice must include a copy of the criminal record at issue 
(except where otherwise prohibited by law) and an explanation of why 
the record is relevant, and it must provide the family at least 15 days 
to request an informal hearing. The proposed revisions would further 
provide that before a PHA denies admission on the basis of criminal 
activity, the PHA must provide the household an opportunity to present 
any relevant mitigating information and expressly sets out the same 
factors discussed earlier for admissions in Sec.  5.852(a). Finally, 
proposed paragraph (d)(1)(ii) would allow that while a PHA is 
determining whether there are grounds for denial of assistance based on 
criminal activity, the PHA cannot issue a voucher to the family, enter 
into a HAP contract or approve a lease, or process or provide 
assistance under the portability procedures.
3. Terminations/Evictions (Sec. Sec.  982.310, 982.553, 982.555)
PHAs
    Section 982.553(b) lists requirements for when a PHA may terminate 
tenancy on the basis of criminal activity, illegal drug use, or alcohol 
abuse. Amendments to this paragraph build on Sec.  982.552, as 
discussed in this preamble. HUD proposes several revisions to Sec.  
982.553(b) to refer to ``drug related criminal activity'' rather than 
``drug criminals'' and ``alcohol abuse'' rather than ``alcohol 
abusers.''
    Section 982.553(c) addresses evidence of criminal activity that can 
be considered when determining admission and terminations for criminal 
activity, illegal drugs use or alcohol abuse. HUD proposes to revise 
paragraph (c) to expressly provide protections equivalent to those 
proposed for part 5.
    The proposed rule would also revise Sec.  982.555, which addresses 
the informal hearing process for terminations. HUD proposes to retain 
the requirement in paragraph (e)(2)(i) that the family must be allowed 
to copy or receive a copy of any documents directly relevant to the 
hearing but would clarify that this includes the information that the 
PHA relied upon to make its initial termination. Paragraph (e)(2)(i) 
would also be further revised, consistent with earlier discussions, to 
require that the copying of such documents must be done at the PHA's 
expense.
Owners
    The proposed rule would make several targeted revisions to Sec.  
982.310, which governs the circumstances under which an owner may 
terminate a tenancy. These revisions apply only to circumstances in 
which the termination is for criminal activity, illegal drug use, or 
alcohol abuse, as authorized by the HAP lease addendum. The purpose of 
these proposed revisions is not to unduly regulate HCV landlords' 
eviction procedures generally; rather, they are targeted to apply only 
when they evict pursuant to these specialized HUD rules for criminal 
activity.
    Consistent with other proposed revisions made in order to provide 
express protections equivalent to those proposed for part 5, Sec.  
982.310(c)(3) would be revised to require an owner's determination that 
a tenant engaged in criminal activity to be made on a preponderance of 
the evidence and would also provide that the fact of an arrest is not a 
basis to determine that the individual engaged in criminal activity 
warranting termination of tenancy or eviction. The proposed rule would 
also add a sentence to Sec.  982.310(c)(3) that would provide that an 
owner may terminate tenancy and evict by judicial action based on the 
conduct underlying an arrest if the conduct indicates that the 
individual is not suitable for tenancy and the owner has sufficient 
evidence other than the fact of arrest that the individual engaged in 
the conduct.
    Section 982.310(h)(1), which addresses owner termination of tenancy 
decisions, is proposed to be revised to amend certain mitigating 
factors that an owner may require. As proposed to be modified, owners 
may consider the nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy; the effect on the community of 
eviction or of the failure of the owner to take such action; the extent 
of participation by the leaseholder in the conduct; the effect of 
eviction on household members not involved in the conduct; and the 
extent to which the leaseholder has taken reasonable steps to prevent 
or mitigate the offending action.
    HUD would insert a new paragraph (h)(2) to apply to circumstances 
where termination is based on criminal activity, illegal drug use or 
alcohol abuse, and would provide that in these cases an owner may 
consider any relevant circumstances described in proposed paragraph 
(h)(1) and may also consider whether the relevant circumstances provide 
reason to believe such conduct will recur and rise to the level that it 
may interfere with the health, safety, or right to peaceful enjoyment 
of the premises by others and whether the leaseholder would like the 
owner to consider mitigating circumstances related to a medical 
condition of a household member.
    HUD would revise redesignated paragraph (h)(3) to add the 
preponderance of the evidence standard discussed elsewhere, and to note 
that the fact that there has been an arrest alone is not a basis for a 
determination

[[Page 25357]]

of culpability in the absence of other independent evidence.
    HUD would remove current paragraph (h)(3), which is incorporated 
into proposed paragraph (h)(2).
3. Portability (Sec. Sec.  982.301 and 982.355)
    The proposed rule would make changes to Sec. Sec.  982.301(b)(4) 
and 982.355(c)(9) to provide that a family that moves under the 
portability procedures may not be rescreened by the receiving PHA. HUD 
specifically seeks comment on these provisions and if there should be 
limited exceptions for statutorily mandated denials in cases where the 
incoming family has not yet been admitted to the program (i.e., the 
family was issued a voucher and chose to move under portability 
immediately without first leasing a unit in the jurisdiction of the 
initial PHA), as well as on the broader question of under what 
circumstances, if any, rescreening of tenants for criminal activity is 
appropriate (see ``Questions for public comment'', infra, Section VII, 
#8).

H. Treatment of HCV/PBV Owners

    Under the HCV program, the PHA is responsible for determining the 
family's eligibility for admission to the program. Where eligibility is 
established, the PHA issues a voucher to the family, which commences 
the family's housing search; if the family finds a unit and the owner 
is willing to lease the unit to the family under the program, the 
family may request PHA approval of the tenancy.
    The screening and selection of the family for the unit, as distinct 
from program eligibility, is the function of the owner. If the owner is 
unwilling to lease the unit to the family, the family may continue 
their housing search during the term of the voucher. The program 
regulations at Sec.  982.307(a)(2) and (3) provide the owner is 
responsible for the screening of families based on their tenant 
histories and that an owner may consider a family's background with 
respect to factors such as respecting the rights of other residents to 
the peaceful enjoyment of their housing and drug-related criminal 
activity or other criminal activity that is a threat to the health, 
safety or property of others. In the PBV program, the PHA refers an 
eligible family to the owner for an available PBV unit, but as with HCV 
the owner remains responsible for screening and selection of the family 
to occupy the owner's unit.
    HUD strongly encourages owners participating in or considering 
participation in the HCV or the PBV programs to conduct an 
individualized assessment or otherwise take mitigating circumstances 
into consideration with respect to their screening procedures related 
to criminal records for all the reasons previously discussed in this 
preamble. The proposed rule would not impose additional requirements 
with respect to owner screening for criminal activity. This is because, 
except in limited specific circumstances, there is no federal statutory 
requirement that owners must accept a voucher and participate in the 
HCV program or make their units available for PBV assistance. Such a 
requirement may have the unintended consequence of discouraging owners 
from considering any HCV family for their unit because consideration 
would trigger screening requirements and restrictions that would not be 
required of the owner with respect to unassisted prospective tenants. 
Likewise, owners may be discouraged from considering the PBV program 
if, as a condition of making their housing available, the owner's right 
to screen prospective tenants would be limited by, or subject to, 
additional requirements. HUD notes owners in the HCV and PBV programs 
are subject to the Fair Housing Act, which prohibits screening that has 
an unjustified discriminatory effect on any protected class, as well as 
all applicable state or local laws related to the consideration of 
criminal records and the use of criminal records, including limitations 
on inquiries, restrictions on lookback periods, and requirements to 
consider mitigating factors prior to denying a rental application on 
such basis.
    HUD is seeking specific comment on the issue of owner screening 
requirements for the HCV and PBV programs with respect to criminal 
records and criminal activity (see, ``Questions for public comment'', 
infra, section VII, #10).

I. Severability

    It is HUD's intention that the provisions of the proposed rule 
shall operate independently of each other. In the event that this rule 
or any portion of this rule is ultimately declared invalid or stayed as 
to a particular program, it is HUD's intent that the rule nonetheless 
be severable and remain valid with respect to those programs not at 
issue. Additionally, it is HUD's intention that any provision(s) of the 
rule not affected by a declaration of invalidity or stayed shall be 
severable and remain valid. HUD concludes it would separately adopt all 
of the provisions contained in this proposed rule.

VII. Questions for Public Comment

    HUD welcomes comments on all aspects of this proposed rule. In 
addition, HUD specifically requests comments on the following topics:
    Question for comment #1: ``Currently engaging in or engaged in.'' 
The proposed rule would provide that, for purposes of determining 
whether criminal activity that may be the basis for termination or 
eviction is ``current,'' a PHA or owner may not rely solely on criminal 
activity that occurred 12 months ago or longer to establish that 
behavior is ``current.'' Should HUD establish such a rule and, if so, 
is less than 12 months an appropriate timeframe?
    Question for comment #2: Lookback period for criminal activity. The 
proposed rule would provide that it is presumptively unreasonable for 
PHAs and owners to consider convictions that occurred more than three 
years ago in making admissions decisions. This is based in part on 
research on recidivism that indicates that people's risk of committing 
a crime drops precipitously after the person has not reoffended for a 
period of three years. The proposed rule would provide, however, that 
this presumption can be overcome based on evidence that, with respect 
to specific crimes, older convictions are relevant to individualized 
assessments of current suitability for tenancy.
    2a. Is three years the appropriate time period for this 
presumption? Are there specific crimes for which a longer lookback 
period should be considered? If so, what are those crimes, how long of 
a lookback period would be recommended, and what is the supporting 
rationale? In general, what should HUD consider to be adequate 
``empirical evidence'' that, for a specified crime of conviction, would 
overcome the presumption that a lookback period of longer than three 
years is unreasonable?
    2b. By the same token, are there certain offenses for which a 
lookback period that exceeds three years may be presumptively 
unreasonable? HUD seeks specific comment on all aspects of the proposal 
to presumptively but not conclusively cap the lookback period for any 
given offense at three years.
    Question for comment #3: Opportunity to dispute criminal records 
relied upon by PHA or owner (Denials). The proposed rule would provide 
that PHAs and owners provide applicants with relevant criminal records 
no fewer than 15 days prior to notification of a denial of admission, 
as well as an opportunity to dispute the accuracy and relevance of the 
records relied upon. Is

[[Page 25358]]

15 days prior to notification of a denial of admission an appropriate 
timeframe? Do the processes described in Sec. Sec.  5.855(c), 882.518, 
960.204, and 982.553 adequately balance the needs of applicants and 
housing providers? If not, what additional processes or measures would 
be helpful?
    Question for comment #4: Mitigating factors. The proposed rule 
would provide that PHAs and owners consider the following set of 
mitigating factors when a decision to deny or terminate assistance or 
to evict is predicated on consideration of a criminal record: the facts 
or circumstances surrounding the criminal conduct, the age of the 
individual at the time of the conduct, evidence that the individual has 
maintained a good tenant history before and/or after the criminal 
conviction or the criminal conduct, and evidence of rehabilitation 
efforts. Are there other mitigating factors that should be considered? 
Should HUD define these mitigating factors in greater detail in 
regulation or guidance? Please provide suggested definitions or 
standards.
    Question for comment #5: Justifying denial of admissions. The 
proposed rule would provide that criminal activity in the past can be 
the basis for denying admission only if it would threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents or PHA/property employees. Should HUD provide additional 
specificity in the rule or in subsequent guidance on this requirement, 
and if so, on what aspects?
    Question for comment #6: Ensuring consistency of tenant selection 
plan. The proposed rule would amend 24 CFR part 5 to add a new section, 
Sec.  5.906. Proposed Sec.  5.906(a) would require an owner of 
federally assisted housing as defined at Sec.  5.100, other than an 
owner of a property receiving tenant-based assistance and project-based 
voucher and moderate rehabilitation owners, to amend the tenant 
selection plan required by Sec.  5.655 within six months after the 
effective date of the final rule to ensure its consistency with 
Sec. Sec.  5.851 through 5.905. HUD seeks comment on whether the six 
months proposed for amendment of the tenant selection plan is 
reasonable.
    Question for comment #7: Evidence relating to exclusions. The 
proposed rule would require housing providers who exclude a household 
member to apply a ``preponderance of the evidence'' standard when 
determining whether the household member participated in or was 
culpable for an action or failure to act that warrants denial or 
termination. This proposal would address the need for housing providers 
to have a uniform standard with which to evaluate evidence underlying 
decisions that affect a tenant's or prospective tenant's future housing 
opportunities. What makes evidence generally reliable in this context? 
Should HUD provide further guidance as to the use of evidence in this 
regulation or in subregulatory guidance?
    Question for comment #8: Rescreening of tenants for criminal 
activity. At Sec. Sec.  982.301 and 982.355, HUD proposes to prohibit 
the receiving PHA from rescreening a family that moves under the 
portability procedures of the HCV program (including for criminal 
activity). HUD is aware that there are other circumstances under which 
a PHA or an owner might rescreen a tenant for criminal activity, and 
HUD would like to consider the issue of rescreening for criminal 
activity in a comprehensive manner. As such, HUD specifically seeks 
comment from PHAs and owners on whether there are circumstances under 
which rescreening a tenant for criminal activity is appropriate, and if 
so, an explanation of the precise circumstances and reasons therefore. 
Specifically, for those PHAs and owners who rescreen, under what 
circumstances do you rescreen after an initial screening, how often do 
you conduct such rescreening, how long have you been conducting such 
rescreening, on approximately how many tenants/participants, and what 
has been the results of your rescreening? Specifically, has your 
rescreening then led to any evictions or terminations? If so, how many, 
what were the specific offenses for which they were evicted, what was 
the case outcome for those offenses, and when did the offense occur in 
relation to the eviction or termination? Other than the offense in 
question, were there other concerning factors raised by the tenant/
participant? Do you believe your rescreening serves a legitimate 
purpose? For all members of the public, how, if at all, should HUD 
address comments about rescreening in the final rule?
    Question for comment #9: Owner responses to tenant comments on 
tenant selection plans. Proposed revisions to 24 CFR 245.115(b)(3) 
would give tenants the right to comment on proposed changes to the 
tenant selection plan, with or without the help of tenant 
representatives, and submit them to the owner and to the local HUD 
office. Should owners be required to respond to comments received from 
tenants on proposed changes to the tenant selection plan prior to 
finalizing those changes? If so, what is a reasonable time frame for an 
owner to respond?
    Question for Comment #10: Screening Requirements for HCV and PBV 
Owners. As noted earlier, HUD is requesting comments on owner screening 
requirements for the HCV and PBV programs with respect to criminal 
records and criminal activity. Specifically, should HUD establish the 
same or similar requirements for HCV and/or PBV owners as proposed for 
owners under part 5? If not, what, if any, requirements should be 
established for denials on the basis of criminal records, current or 
recent criminal activity, illegal drug use, or alcohol abuse?
    HCV Owners: Should an owner participating in or considering 
participating in the HCV program be required, as opposed to encouraged, 
to conduct an individualized assessment before refusing to rent their 
unit to an HCV family based on criminal activity? Likewise, should 
there be restrictions on an owner's screening in terms of a lookback 
period for criminal activity? How would such restrictions apply, and 
what would be the mechanism and the enforcement action, if any, that a 
PHA would be responsible for taking in such instances? Would any 
additional requirements adversely impact owner participation in the HCV 
program and to what extent? Are there other approaches short of 
regulatory requirements that would encourage HCV owners or potential 
HCV owners to adopt such practices voluntarily?
    PBV Owners: Should the criminal activity screening requirements be 
more extensive for or exclusively applied to PBV owners as opposed to 
HCV owners? For example, what aspects of the PBV program, which are 
generally similar to other HUD project-based assistance, should HUD 
consider to either continue to treat it more like HCV or rather, apply 
the requirements proposed in this rule.
    Question for public comment #11: Continued use of the term 
``alcohol abuse''. As discussed in the preamble, this proposed rule 
continues the use of the statutory term ``alcohol abuse'' when 
describing the relevant potential disqualifying circumstances related 
to alcohol. HUD seeks public comment on the continued use of the term 
and whether there are alternative, less pejorative, and/or more current 
terms that could replace ``alcohol abuse''.

VIII. Findings and Certifications

Regulatory Review (Executive Orders 12866, 13563, and 14094)

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and,

[[Page 25359]]

therefore, subject to review by the Office of Management and Budget 
(OMB) in accordance with the requirements of the order. Executive Order 
13563 (Improving Regulations and Regulatory Review) directs executive 
agencies to analyze regulations that are ``outmoded, ineffective, 
insufficient, or excessively burdensome, and to modify, streamline, 
expand, or repeal them in accordance with what has been learned.'' 
Executive Order 13563 also directs that, where relevant, feasible, and 
consistent with regulatory objectives, and to the extent permitted by 
law, agencies are to identify and consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public. Executive Order 14094 entitled ``Modernizing Regulatory 
Review'' (hereinafter referred to as the ``Modernizing E.O.'') amends 
section 3(f) of Executive Order 12866 (Regulatory Planning and Review), 
among other things.
    The proposed rule would revise 24 CFR parts 5, 245, 882, 960, 966, 
and 982 to amend existing regulations that govern admission for 
applicants with criminal history, and for evicting or terminating 
assistance of persons on the basis of illegal drug use, drug-related 
criminal activity, or other criminal activity. HUD believes, consistent 
with Executive Order 13563, that this proposed rule would reduce 
unnecessary exclusions from HUD programs while allowing providers to 
maintain the safety of their residents, staff, and communities. The 
proposed rule is also intended to reduce the risk of PHAs and owners 
violating nondiscrimination laws. This rule was determined to be a 
``significant regulatory action'' as defined in Section 3(f) of 
Executive Order 12866. HUD has prepared an initial regulatory impact 
analysis and has assessed the potential costs and benefits, both 
quantitative and qualitative, of this proposed regulatory action and 
has determined that the benefits would justify the costs. The analysis 
is available at www.regulations.gov and is part of the docket file for 
this rule.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This proposed rule does 
not impose any federal mandates on any State, local, or Tribal 
governments, or on the private sector, within the meaning of UMRA.

Environmental Review

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available through the 
Federal eRulemaking Portal at http://www.regulations.gov.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would impact Public Housing and Multifamily housing 
by increasing access for individuals with criminal records in need of 
affordable housing. Under current regulations, PHAs and owners already 
are authorized to, and often do, conduct a review of criminal histories 
in connection with admissions and eviction decisions. This proposed 
rule would provide clear guidance and requirements on how to do that to 
ensure that providers are relying only on relevant information that 
indicates an actual threat to health, safety or quiet enjoyment of the 
premises; and not relying on irrelevant information, e.g., arrest 
records, outdated criminal records, or inaccurate or insufficient 
information.
    The proposed rule would ensure that individual assessments consider 
relevant information and that housing providers make decisions based on 
the preponderance of the evidence of criminal activity; that 
individuals that are denied admission or evicted because of criminal 
history are provided with notice and access to the records, as well as 
the opportunity to dispute inaccurate information; and that these 
changes be adopted in tenant selection plans, tenant lease documents, 
and PHA policies.
    HUD estimates the number of small entities for PHAs as 2,102. At 
this time, HUD is unable to provide an accurate estimate of small PBRA 
owners because we do not always know whether there is a corporate 
structure behind an individual owner. There are 158 PBRA owners at a 
minimum that are sole proprietorships or tenancies in common, which are 
likely small entities. Since the costs of the rule are expected to be 
minimal (average upfront costs of $120 per PHA and $184 per PBRA owner, 
and average annual costs of $185 per PHA and $69 per private owner), 
the proposed rule is not expected to have a significant impact on small 
entities. Additionally, HUD believes that this proposed rule would 
benefit small entities equal to or even more than larger entities by 
providing clarification on how these individual assessments should be 
applied.
    HUD recognizes that there is one aspect of the proposed rule that 
has the potential to impose some costs on some providers of federally-
assisted housing--the proposed new requirement that the PHA furnish 
copies of relevant documents to applicants or tenants wishing to 
challenge an admission or termination decision based on a criminal 
history at the PHA's expense. HUD does not consider that this would 
amount to a substantial economic impact. HUD expects that, even where 
furnishing copies of documents would be required, the incremental 
material costs (paper, copier machine wear and tear, etc.) and costs 
attributable to personnel time would not rise to the level of a 
substantial economic impact.
    Accordingly, it is HUD's determination that this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities. Notwithstanding HUD's determination that this proposed 
rule would not have a significant effect on a substantial number of 
small entities, HUD specifically invites comments regarding any less 
burdensome alternatives to this proposed rule that would meet HUD's 
objectives as described in this preamble.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has Federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments or is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule would not have 
Federalism implications and would not impose substantial direct 
compliance costs on State and local governments or preempt state law 
within the meaning of the Executive Order.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection displays a valid

[[Page 25360]]

control number. The information collection requirements contained in 
this proposed rule are still being finalized for HUD to submit to the 
Office of Management and Budget (OMB) under the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501-3520) and the proposed rule would either update 
or create a new information collection with an assigned an OMB control 
number.
    The proposed rule would clarify that PHAs must include in their 
lease termination notices the specific lease provisions and specific 
criminal activity at issue, a copy of the criminal record at issue, and 
a description of why the criminal record may be relevant to the PHA's 
admission decision. HUD estimates that this would require a one-time 
revision to lease termination notices (``program termination notices'' 
for HCV). Additionally, PHAs would be required to provide a copy of all 
relevant PHA documents when providing a notification of denial. 
Currently, this information in part is available by request, so this 
proposed rule would extend the amount of information PHAs would need to 
make available. However, HUD is seeking comment on how this could be 
balanced against confidentiality of records and burden on PHAs to 
provide information that may not be needed.
    PHAs and owners would also be required to revise leases one time in 
order to include provisions on what grounds a PHA or owner has to 
terminate tenancy on the basis of drug-related criminal activity or 
illegal drug use. The proposed rule would also require owners to revise 
their tenant selection plans to ensure consistency with the amended 24 
CFR part 5 and notify tenants of the proposed substantive changes. HUD 
is still finalizing the overall reporting and recordkeeping burden, but 
the estimates are as follows:

----------------------------------------------------------------------------------------------------------------
   Description of information        Number of     Responses per   Total annual      Hours per
           collection                responses         year          responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
PBRA and PIH Leases.............          26,242               1          26,242              .5          13,121
PBRA and PIH Notices............          26,242               1          26,242               2          52,484
Tenant Selection Plans..........          26,242               1          26,242             1.5          39,363
Copy of Records.................           4,000               1           4,000              .5           2,000
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning the 
information collection requirements in the proposed rule regarding:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information;
    (3) Whether the proposed collection of information enhances the 
quality, utility, and clarity of the information to be collected; and
    (4) Whether the proposed information collection minimizes the 
burden of the collection of information on those who are to respond, 
including through the use of appropriate automated collection 
techniques or other forms of information technology (e.g., permitting 
electronic submission of responses).
    Interested persons are invited to submit comments regarding the 
information collection requirements in this rule. The proposed 
information collection requirements in this rule have been submitted to 
OMB for review under section 3507(d) of the Paperwork Reduction Act. 
Under the provisions of 5 CFR part 1320, OMB is required to make a 
decision concerning this collection of information between 30 and 60 
days after the publication date. Therefore, a comment on the 
information collection requirements is best assured of having its full 
effect if OMB receives the comment within 30 days of the publication. 
This time frame does not affect the deadline for comments to the agency 
on the proposed rule. Comments must refer to the proposed rule by name 
and docket number (FR-6085) and must be sent to: HUD Desk Officer, 
Office of Management and Budget, New Executive Office Building, 
Washington, DC 20503, Fax number: 202-395-6947 and Colette Pollard, HUD 
Reports Liaison Officer, U.S. Department of Housing and Urban 
Development, 451 7th Street SW, Room 2204, Washington, DC 20410.
    Interested persons may submit comments regarding the information 
collection requirements electronically through the Federal eRulemaking 
Portal at http://www.regulations.gov. HUD strongly encourages 
commenters to submit comments electronically. Electronic submission of 
comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt by HUD, and enables HUD to make them 
immediately available to the public. Comments submitted electronically 
through the http://www.regulations.gov website can be viewed by other 
commenters and interested members of the public. Commenters should 
follow the instructions provided on that site to submit comments 
electronically.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with disabilities, Intergovernmental 
relations, Loan programs--housing and community development, Low- and 
moderate-income housing, Mortgage insurance, Penalties, Pets, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Social security, Unemployment compensation, Wages.

24 CFR Part 245

    Condominiums, Cooperatives, Grant programs--housing and community 
development, Loan programs--housing and community development, Low- and 
moderate-income housing, Rent subsidies, Reporting and recordkeeping 
requirements, Utilities.

24 CFR Part 882

    Grant programs--housing and community development, Homeless, Lead 
poisoning, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Pets, Public housing.

24 CFR Part 966

    Grant programs--housing and community development, Public housing, 
Reporting and recordkeeping requirements.

24 CFR Part 982

    Grant programs--housing and community development, Grant programs--
Indians, Indians, Public

[[Page 25361]]

housing, Rent subsidies, Reporting and recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD 
proposes to amend 24 CFR parts 5, 245, 882, 960, 966, and 982 as 
follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for part 5 continues to read as follows:

    Authority:  12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f, 
1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2396; Sec. 607, 
Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et seq.); E.O. 
13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 
71319, 3 CFR, 2010 Comp., p. 273; E.O 13831, 83 FR 20715, 3 CFR, 
2018 Comp., p. 806; 42 U.S.C. 2000bb et seq.

Subpart A--Generally Applicable Definitions and Requirements; 
Waivers

0
2. Amend Sec.  5.100 by adding in alphabetical order definitions for 
``Criminal history'', ``Criminal record'', ``Currently engaging in or 
engaged in'', ``Individualized assessment'', and ``Preponderance of the 
evidence'' to read as follows:


Sec.  5.100  Definitions.

* * * * *
    Criminal history means an individual's past involvement with the 
criminal justice system, including but not limited to that reflected in 
a criminal conviction. Criminal history may include information that 
appears in an individual's criminal record (as defined in this section) 
but may also include information that is not part of that individual's 
criminal record.
    Criminal record means a history of an individual's contacts with 
law enforcement agencies or the criminal justice system. A criminal 
record may include details of warrants, arrests, convictions, 
sentences, dismissals or deferrals of prosecution, acquittals or 
mistrials pertaining to an individual, probation, parole, and 
supervised release terms and violations, sex offender registry status 
and fines and fees.
    Currently engaging in or engaged in means, with respect to behavior 
such as illegal use of a drug, other drug-related criminal activity, or 
other criminal activity, that the individual has engaged in the 
behavior recently enough to justify a reasonable belief that the 
individual's behavior is current. Any finding that an individual is 
currently engaging or engaged in behavior must satisfy the 
preponderance of the evidence standard and must take into account any 
relevant contrary evidence, such as evidence that the individual has 
successfully completed substance use treatment services with no 
evidence of recurrence. In the absence of evidence to the contrary, 
conduct that occurred 12 months or longer before the determination date 
does not support a determination that an individual is currently 
engaging in or engaged in the conduct at issue.
* * * * *
    Individualized Assessment, where required by these regulations, is 
a process by which an applicant is evaluated for admission to a 
federally assisted housing program. The point of an individualized 
assessment is to determine the risk that an applicant will engage in 
conduct that would adversely affect the health, safety, and peaceful 
enjoyment of the premises by other residents, the owner, or property 
employees. An individualized assessment requires consideration of 
multiple points of information that may include general tenancy 
history, criminal record, criminal activity, including drug-related 
criminal activity, alcohol abuse, or other specified activity together 
with consideration of relevant mitigating factors, including but not 
limited to those set forth at Sec.  5.852(a)(1) and (2).
* * * * *
    Preponderance of the evidence means, when taking all the evidence 
together and considering its reliability or unreliability, it is more 
likely than not that a claim is true.
* * * * *

Subpart I--Preventing Crime in Federally Assisted Housing--Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol 
Abuse

0
3. Revise Sec.  5.851 to read as follows:


Sec.  5.851  What authority do I have to screen applicants and to 
terminate tenancy?

    (a) Screening applicants. (1) You are authorized to screen 
applicants for the programs covered by this part and in general may 
deny admission to applicants you determine are unsuitable under your 
standards for admission. However, any finding of unsuitability that is 
based on a criminal record, a finding of criminal activity, illegal 
drug use, or alcohol abuse must be in accord with the procedures and 
standards set out in this subpart. Criminal histories of applicants and 
their household members may be considered only in the manner and for 
the purposes described in this regulation.
    (2) Except in those circumstances where a statute requires you to 
deny admission based on criminal history, any reliance on criminal 
activity in admissions decisions is not permitted without an 
individualized assessment.
    (i) If a criminal activity is determined relevant, it must be 
considered alongside the factors set forth at Sec.  5.852(a) and other 
relevant mitigating factors.
    (ii) An arrest record alone may not be the basis for a 
determination that an individual has engaged in criminal activity that 
warrants denial of admission. The actions that resulted in the arrest 
could be relevant to determine the applicant's risk to engage in such 
conduct provided there is sufficient evidence independent of the arrest 
that the actions occurred.
    (b) Terminating tenancy. You are authorized to terminate tenancy of 
tenants, in accordance with your leases and State landlord-tenant law 
for the programs covered by this part. The provisions of this subpart 
implement statutory directives that either require or permit you to 
terminate tenancy under certain circumstances on the basis of criminal 
activity, illegal drug use, or alcohol abuse, as provided in 42 U.S.C. 
1437f, 1437n, and 13662. Any termination based on criminal activity, 
illegal drug use, or alcohol abuse must be in accordance with the 
procedures and requirements of this subpart. You retain authority to 
terminate tenancy on any basis that is otherwise authorized.
0
4. Revise Sec.  5.852 to read as follows:


Sec.  5.852  What factors should I consider in determining the 
relevance of criminal records, criminal activity, drug use, or alcohol 
abuse in screening, termination, and eviction actions?

    (a) General--(1) Admissions. If the law and regulation permit you 
to deny admission but do not require denial of admission based on a 
criminal record, criminal history, a finding of criminal activity, 
illegal drug use, or alcohol abuse, you may take or not take the action 
in accordance with your standards for admission. Before denying 
admission on the basis of a criminal record, criminal activity, illegal 
drug use, or alcohol abuse, you must conduct an individualized 
assessment that takes into account circumstances relevant to a 
particular admission decision. The circumstances relevant to a 
particular admission decision include but are not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense, the extent to which it bears 
on suitability for tenancy, and the length of time that has passed 
since the conduct;
    (ii) The extent to which the applicant or relevant household member 
has taken

[[Page 25362]]

actions to mitigate the risk that admission of the individual would 
adversely affect the health, safety, and peaceful enjoyment of the 
premises by other residents, the owner, or property employees (e.g., 
evidence of post-conviction rehabilitation, treatment/recovery, 
employment, housing history);
    (iii) Whether the applicant would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered);
    (iv) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination, you must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, you may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse; and
    (v) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (2) Terminations and evictions. If the law and regulation permit 
you to terminate assistance or evict but do not require you to do so 
based on criminal record, or a finding of criminal activity, illegal 
drug use, or alcohol abuse, you may take or not take the action in 
accordance with your standards for termination or eviction. Before 
exercising your discretion to terminate assistance or evict based on 
criminal record, or a finding of criminal activity, illegal drug use, 
or alcohol abuse, you must take into account all the circumstances 
relevant to a particular termination or eviction. The circumstances 
relevant to a particular termination or eviction may include but are 
not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy;
    (ii) The effect on the community of termination or eviction; or of 
the failure of the responsible entity to take such action;
    (iii) The extent of participation by the leaseholder in the 
conduct;
    (iv) The effect of termination of assistance or eviction on 
household members not involved in the conduct;
    (v) The extent to which the leaseholder or relevant household 
member has taken reasonable steps to prevent or mitigate the offending 
action;
    (vi) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination you must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, you may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse;
    (vii) Whether the leaseholder would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered); and
    (viii) Whether further considerations must be made in order to 
comply with the obligation to consider and provide reasonable 
accommodations to persons with disabilities. A reasonable accommodation 
may include, for example, disregarding the conduct or record if it was 
disability-related.
    (b) Exclusion of culpable household member. You may require an 
applicant (or tenant) to exclude a household member from residing in 
the unit in order to be admitted to the housing program (or continue to 
reside in the assisted unit), if you determine that household member 
has participated in or been culpable for, based on a preponderance of 
the evidence, action or failure to act that warrants denial (or 
termination). The fact that there has been an arrest is not a basis for 
the requisite determination that the relevant individual participated 
in or was culpable for the action or failure to act, but the conduct 
that resulted in the arrest can be such a basis provided there is 
sufficient evidence that it occurred independent of the fact of the 
arrest. The duration of any such exclusion shall not extend beyond the 
time period an individual could be denied admission for that action or 
failure to act and shall be reasonable in light of all relevant 
circumstances, including but not limited to the excluded household 
member's age and relationship to other household members.
    (c) Nondiscrimination limitation. Your admission, termination, and 
eviction actions must be consistent with the fair housing and equal 
opportunity provisions of Sec.  5.105 and subpart L of this part. HUD 
standards for nondiscrimination requirements extend to third-party 
screening services or companies contracted by you.
    (d) Effect of failure to disclose criminal record. Except where an 
owner solely relies on self-disclosure in reviewing an applicant's 
criminal record, the owner may deny admission for failure to disclose 
criminal record only if that criminal record would be material to an 
admissions decision pursuant to this rule and the owner's admissions 
standards.
0
5. Amend Sec.  5.853 by:
0
a. Revising paragraph (a); and
0
b. Removing from paragraph (b) the definition of ``Currently engaging 
in''.
    The revision reads as follows:


Sec.  5.853  Definitions

    (a) Terms found elsewhere. The following terms are defined in 
subpart A of this part: 1937 Act, covered person, currently engaging in 
or engaged in, drug, drug-related criminal activity, federally assisted 
housing, guest, household, HUD, other person under the tenant's 
control, premises, preponderance of the evidence, public housing, 
public housing agency (PHA), Section 8, violent criminal activity.
* * * * *
0
6. Amend Sec.  5.854 by revising the section heading and paragraphs 
(a)(1) and (2) and (b)(2) to read as follows:


Sec.  5.854  When must I prohibit admission of individuals who have 
engaged in drug-related criminal activity and illegal drug use?

    (a) * * *
    (1) The evicted household member who engaged in drug-related 
criminal activity is participating in or has successfully completed 
substance use treatment services; or
    (2) The circumstances leading to the eviction no longer exist (for 
example, the household member who engaged in the drug-related criminal 
activity has died or is imprisoned).
    (b) * * *
    (2) You determine that you have reasonable cause to believe that a

[[Page 25363]]

household member's illegal use or a pattern of illegal use of a drug 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other residents or property employees.
0
7. Revise and republish Sec.  5.855 to read as follows:


Sec.  5.855  When may I prohibit admission of individuals who have 
engaged in criminal activity?

    (a) You may prohibit admission of a household or household member 
to federally assisted housing on the basis of criminal activity only if 
you determine that the household member is currently engaging in, or 
has engaged in during a reasonable time before the admission decision:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity that would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents; or
    (4) Other criminal activity that would threaten the health or 
safety of the PHA or owner or any employee, contractor, subcontractor 
or agent of the PHA or owner who is involved in the housing operations.
    (b) You may establish a period before the admission decision during 
which an applicant must not have engaged in the activities specified in 
paragraph (a) of this section (reasonable time). However, prohibiting 
admission for a period of time longer than three years following any 
particular criminal activity, including prior terminations from HUD-
assisted housing for drug-related criminal activity, is presumptively 
unreasonable. An owner may impose a longer prohibition based on 
particular criminal activity only after a determination, based on 
empirical evidence, that such longer prohibition is necessary to 
ensuring the health, safety, and peaceful enjoyment of other tenants or 
property employees.
    (c) Before you prohibit admission on the basis of criminal activity 
you must notify the household of the proposed action and provide a copy 
of any relevant criminal record to the subject of the record and the 
applicant (except where otherwise prohibited by law) no less than 15 
days prior to notification of the denial. During the 15-day period, you 
must provide the household and the subject of any record an opportunity 
to dispute the accuracy and relevance of that record. You must provide 
the household the opportunity to present, and you must take into 
consideration, any relevant mitigating information, which may include 
but is not limited to the factors set forth at Sec.  5.852(a)(1)(i) 
through (v).
    (d) All determinations to deny admission on the basis of criminal 
activity must be supported by a preponderance of the evidence. The fact 
that there has been an arrest for a crime is not a basis for the 
requisite determination that the relevant individual engaged in 
criminal activity, but the conduct that resulted in the arrest can be 
such a basis provided there is sufficient evidence that it occurred 
independent of the fact of the arrest.
    (e) No applicant that was previously denied admission because of a 
determination concerning a member of the household under paragraph (a) 
of this section shall be prohibited from applying for assistance. An 
owner must not deny the application based solely on the prior denial.
0
8. Revise Sec.  5.857 to read as follows:


Sec.  5.857  When must I prohibit admission on the basis of alcohol 
abuse?

    You must establish standards that prohibit admission to federally 
assisted housing if you determine that a household member's abuse or 
pattern of abuse of alcohol would threaten the health, safety, or right 
to peaceful enjoyment of the premises by other residents or property 
employees.
0
9. Revise Sec.  5.858 to read as follows:


Sec.  5.858  What authority do I have to evict tenants on the basis of 
drug-related criminal activity and illegal drug use?

    (a) Drug-related criminal activity. The lease must provide that 
drug-related criminal activity engaged in on or near the premises by 
any tenant, household member, or guest, and any such activity engaged 
in on the premises by any other person under the tenant's control, is 
potential grounds for you to terminate tenancy.
    (b) Illegal drug use. In addition, the lease must allow you to 
evict a family when you determine that a household member is illegally 
using a drug or when you determine that a pattern of illegal use of a 
drug threatens the health, safety, or right to peaceful enjoyment of 
the premises by other residents or property employees.
0
10. Amend Sec.  5.859 by revising the section heading to read as 
follows:


Sec.  5.859  When am I specifically authorized to evict tenants on the 
basis of other criminal activity?

* * * * *
0
11. Amend Sec.  5.860 by revising the section heading to read as 
follows:


Sec.  5.860  When am I specifically authorized to evict on the basis of 
alcohol abuse?

* * * * *
0
12. Revise Sec.  5.861 to read as follows:


Sec.  5.861  What evidence of criminal activity must I have to evict?

    You may terminate tenancy and evict the tenant through judicial 
action for criminal activity by a covered person in accordance with 
this subpart if you determine that the covered person has engaged in 
the criminal activity described in Sec. Sec.  5.858 and 5.859.

Subpart J--Access to and Use of Criminal Records and Information

0
13. Revise the heading for subpart J to read as set forth above.
0
14. Amend Sec.  5.901 by revising paragraph (a) to read as follows:


Sec.  5.901  To what criminal records and searches does this subpart 
apply?

    (a) General criminal records searches. This subpart applies when 
criminal records are obtained from a law enforcement agency under the 
authority of section 6(q) of the 1937 Act (42 U.S.C. 1437d(q)) or from 
another source for consideration in admission, lease enforcement, 
termination, or eviction decisions. PHAs and owners are not required to 
review criminal records beyond the extent necessary to satisfy 
statutory requirements.
* * * * *
0
15. Amend Sec.  5.903 by:
0
a. Revising paragraph (f); and
0
b. Removing the words ``from a law enforcement agency'' in paragraph 
(g) introductory text.
    The revision reads as follows:


Sec.  5.903  What special authority is there to obtain access to 
criminal records?

* * * * *
    (f) Opportunity to dispute--(1) Action by PHA. If a PHA obtains 
criminal record information from a State or local agency under either 
paragraph (a) of this section or pursuant to a request by an owner 
under paragraph (d) of this section showing that a household member has 
been involved in a crime relevant to applicant screening, lease 
enforcement or eviction, the PHA must notify the household of the 
proposed action to be based on the information and must provide the 
subject of the record and the applicant or tenant (except where 
otherwise prohibited by law) a copy of the criminal record, and an 
opportunity to dispute the accuracy and relevance of the information. 
This opportunity must be provided at least 15 days before a denial of 
admission, eviction or lease enforcement action on the basis of such 
information.
    (2) Action by owner. If an owner of federally assisted housing as 
defined at Sec.  5.100, other than an owner of a property receiving 
tenant-based assistance, obtains criminal record

[[Page 25364]]

information from any source other than a PHA, such as a third-party 
screening company relevant to applicant screening, lease enforcement, 
or eviction, the owner must notify the household of the proposed action 
to be based on the information and must provide the subject of the 
record and the applicant or tenant a copy of such information, and an 
opportunity to dispute the accuracy and relevance of the information 
prior to any denial of admission, lease enforcement action, or 
eviction. This opportunity must be provided at least 15 days before a 
denial of admission, eviction, or lease enforcement action on the basis 
of such information.
* * * * *
0
16. Amend Sec.  5.905 by revising paragraph (d) to read as follows:


Sec.  5.905  What special authority is there to obtain access to sex 
offender registration information?

* * * * *
    (d) Opportunity to dispute--(1) Action by PHA. If a PHA obtains sex 
offender registration information under paragraph (a) of this section 
or pursuant to a request by an owner under paragraph (b) of this 
section showing that a household member is subject to a lifetime sex 
offender registration requirement, the PHA must notify the household of 
the proposed action to be based on the information and must provide the 
subject of the record, and the applicant or tenant, with a copy of such 
information, and an opportunity to dispute the accuracy of the 
information. This opportunity must be provided at least 15 days before 
a denial of admission, eviction or lease enforcement action on the 
basis of such information.
    (2) Action by owner. If an owner of federally assisted housing as 
defined at Sec.  5.100, other than an owner of a property receiving 
tenant-based assistance, obtains sex offender registration information 
from any source other than a PHA showing that a household member is 
subject to a lifetime sex offender registration requirement, the owner 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record, and the 
applicant or tenant, with a copy of such information, and an 
opportunity to dispute the accuracy of the information. This 
opportunity must be provided at least 15 days before a denial of 
admission, eviction or lease enforcement action on the basis of such 
information.
0
17. Add Sec.  5.906 to subpart J to read as follows:


Sec.  5.906  Ensuring consistency of tenant selection plans.

    (a) An owner of federally assisted housing as defined at Sec.  
5.100 that is required to have a written tenant selection plan shall 
amend such plan to ensure its consistency with Sec. Sec.  5.851 through 
5.905 and with any non-conflicting state or local law providing 
protections for people with criminal records. The tenant selection plan 
must include any changes to policies and procedures related to 
termination of tenancy as well as admissions, and any changes related 
to criminal background checks conducted by the owner to ensure 
compliance with these regulations.
    (b) An owner may not consider the existence of a criminal record in 
the admission process or in the termination of tenancy process except 
as specified in these regulations.

PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS

0
18. The authority citation for part 245 continues to read as follows:

    Authority: 12 U.S.C. 1715z-1b; 42 U.S.C. 3535(d).

0
19. Amend Sec.  245.115 by:
0
a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
b. Adding new paragraph (b);
0
c. Removing in newly redesignated paragraph (c) the text ``paragraph 
(a)'' and adding in its place the text ``paragraphs (a) and (b)''; and
0
d. Removing in newly redesignated paragraph (d) the text ``paragraphs 
(a) and (b)'' and adding in its place the text ``paragraphs (a) through 
(c)''.
    The addition reads as follows:


Sec.  245.115  Protected Activities

* * * * *
    (b)(1) Owners of multifamily housing projects covered under Sec.  
245.10 must publicize their tenant selection policies by posting copies 
thereof in each office where applications are received and by making 
available copies to applicants or tenants for free upon request. An 
owner may satisfy this requirement by posting its selection policies or 
its documents containing these policies on its website and/or its 
social media account(s), in a conspicuous location and an accessible 
format, where applicable.
    (2) The tenants (including any legal or other representatives 
acting for tenants individually or as a group) must be notified of 
proposed substantive changes to the tenant selection plan, which shall 
include any substantive changes to termination of tenancy or criminal 
background check policies and procedures for applicants and existing 
tenants, and must have the right to inspect and copy such changes for a 
period of 30 days after notification of the proposed change(s). During 
this period, the owner must provide a place (as specified in the 
notice) reasonably convenient to tenants in the project where tenants 
and their representatives can inspect and copy these materials during 
normal business hours.
    (3) The tenants have the right during this period to submit written 
comments on the proposed tenant selection plan change(s) to the owner 
and to the local HUD office. Tenant representatives may assist tenants 
in preparing these comments.
* * * * *

PART 882--SECTION 8 MODERATE REHABILITATION PROGRAMS

0
20. The authority citation for part 882 continues to read as follows:

    Authority: 42 U.S.C. 1437f and 3535(d).

0
21. Amend Sec.  882.511 by:
0
a. Removing in paragraph (e) the misspelled word ``judical'' and adding 
in its place the word ``judicial''; and
0
b. Adding paragraph (h).
    The addition reads as follows:


Sec.  882.511  Lease and termination of tenancy.

* * * * *
    (h) In actions or potential actions to terminate tenancy on the 
basis of criminal activity, illegal drug use, or alcohol abuse, the 
owner shall follow Sec.  882.519.
0
22. Amend Sec.  882.514 by:
0
a. Redesignating paragraph (a)(2) as (a)(3) and adding a new paragraph 
(a)(2); and
0
b. Revising and republishing paragraphs (c) and (f).
    The addition and revisions read as follows:


Sec.  882.514  Family participation.

* * * * *
    (a) * * *
    (2) The PHA's tenant selection policies shall be publicized by 
posting copies thereof in each office where applications are received 
and by making available copies to applicants or tenants for free upon 
request. The PHA may satisfy this requirement by posting its selection 
policies or its documents containing these policies on its website and/
or its social media account(s), in a conspicuous location and an 
accessible format, where applicable.
* * * * *
    (c) Owner selection of families. All vacant units under Contract 
must be rented to Eligible Families referred by

[[Page 25365]]

the PHA from its waiting list. However, if the PHA is unable to refer a 
sufficient number of interested applicants on the waiting list to the 
Owner within 30 days of the Owner's notification to the PHA of a 
vacancy, the Owner may advertise or solicit applications from Low-
Income Families and refer such Families to the PHA to determine 
eligibility. The Owner is responsible for tenant selection; however, 
the owner must not deny program assistance or admission to an applicant 
based on the fact that the applicant is or has been a victim of 
domestic violence, dating violence, sexual assault, or stalking, if the 
applicant otherwise qualifies for assistance or admission. The Owner 
must follow the procedures outlined in Sec.  882.519 if the reason for 
the Owner's denial is based on criminal activity, illegal drug use, or 
alcohol abuse. Should the Owner reject a Family, and should the Family 
believe that the Owner's rejection was the result of unlawful 
discrimination, the Family may request the assistance of the PHA in 
resolving the issue. If the issue cannot be resolved promptly, the 
Family may file a complaint with HUD, and the PHA may refer the Family 
to the next available Moderate Rehabilitation unit.
* * * * *
    (f) Families determined by the PHA to be ineligible. If a Family is 
determined to be ineligible in accordance with the PHA's HUD-approved 
application, either at the application stage or after assistance has 
been provided on behalf of the Family, the PHA shall promptly notify 
the Family by letter of the determination and the reasons for it and 
the letter shall state that the Family has the right within a 
reasonable time (specified in the letter) to request an informal 
hearing. If, after conducting such an informal hearing, the PHA 
determines, based on a preponderance of the evidence, that the Family 
is ineligible, it shall notify the Family in writing. The procedures of 
this paragraph do not preclude the Family from exercising its other 
rights if it believes it is being discriminated against on the basis of 
race, color, religion, sex, age, handicap, familial status, or national 
origin. The informal hearing requirements for denial and termination of 
assistance on the basis of ineligible immigration status are contained 
in 24 CFR part 5.
0
23. Revise Sec.  882.518 to read as follows:


Sec.  882.518  Denial of admission and termination of assistance on the 
basis of criminal record, criminal activity, illegal drug use, and 
alcohol abuse.

    (a) Requirement to deny admission--(1) Relevant circumstances and 
individualized assessment. (i) If the law and regulation permit the PHA 
to deny admission but do not require denial of admission based on a 
criminal record, criminal history, a finding of criminal activity, 
illegal drug use, or alcohol abuse, the PHA may take or not take the 
action in accordance with the PHA standards for admission. All 
determinations to deny admission on the basis of criminal activity must 
be supported by a preponderance of the evidence. An arrest record alone 
may not be the basis for a determination that an individual has engaged 
in criminal activity that warrants denial of admission. The actions 
that resulted in the arrest could be relevant to determine the 
applicant's risk to engage in such conduct provided there is sufficient 
evidence independent of the arrest that the actions occurred and must 
be considered alongside the factors set forth at paragraph (a)(1)(ii) 
of this section and other relevant mitigating factors.
    (ii) Before denying admission on the basis of a criminal record, 
criminal activity, illegal drug use, or alcohol abuse, the PHA must 
conduct an individualized assessment that takes into account 
circumstances relevant to a particular admission decision. A criminal 
record may be considered in the individualized assessment only if it is 
relevant to determining the risk that an applicant would threaten the 
health, safety, or right to peaceful enjoyment of residents or PHA 
employees. The circumstances relevant to a particular admission 
decision include but are not limited to:
    (A) The nature and circumstances of the conduct in question, 
including the seriousness of the offense, the extent to which it bears 
on suitability for tenancy, and the length of time that has passed 
since the conduct;
    (B) The extent to which the applicant or relevant household member 
has taken actions to mitigate the risk that admission of the individual 
would adversely affect the health, safety, and peaceful enjoyment of 
the premises by other residents, the owner, or property employees 
(e.g., evidence of post-conviction rehabilitation, treatment/recovery, 
employment, housing history; treatment of a medical condition of a 
household member);
    (C) Whether the applicant would like the PHA to consider mitigating 
circumstances related to a medical condition of a household member 
(which then must be considered);
    (D) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination, the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse; and
    (E) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (2) Prohibiting admission on the basis of drug-related criminal 
activity. (i) The PHA must prohibit admission to the program of an 
applicant for three years from the date of termination of tenancy if 
any household member's federally assisted housing tenancy has been 
terminated for drug-related criminal activity. However, the PHA may 
admit the household if the PHA determines:
    (A) The household member who engaged in drug-related criminal 
activity and whose tenancy was terminated is participating in or has 
successfully completed substance use treatment services; or
    (B) The circumstances leading to the termination of tenancy no 
longer exist (for example, the household member who engaged in the 
criminal activity has died or is imprisoned).
    (ii) The PHA must establish standards that permanently prohibit 
admission to the program if any household member has ever been 
convicted of drug-related criminal activity for manufacture or 
production of methamphetamine on the premises of federally assisted 
housing.
    (iii) The PHA must establish standards that prohibit admission of a 
household to the program if the PHA determines that any household 
member is currently engaging in illegal use of a drug or that a 
household member's pattern of illegal use of a drug, as

[[Page 25366]]

defined in 24 CFR 5.100, would threaten the health, safety, or right to 
peaceful enjoyment of the premises by other residents or property 
employees (see definition of ``Currently engaging in or engaged in'' at 
24 CFR 5.100). Any determination whether a pattern of illegal use meets 
this standard must take into account any relevant information submitted 
by the household, such as whether the household member is currently 
receiving or has successfully completed substance use treatment 
services.
    (3) Prohibiting admission of sex offenders. The PHA must establish 
standards that prohibit admission to the program if any member of the 
household is subject to a lifetime registration requirement under a 
State sex offender registration program. In this screening of 
applicants, the PHA must perform criminal history background checks 
necessary to determine whether any household member is subject to a 
lifetime sex offender registration requirement in the State where the 
housing is located and in other States where household members are 
known to have resided.
    (b) Authority to deny admission--(1) Prohibiting admission on the 
basis of other criminal activity. The PHA may prohibit admission of a 
household to the program on the basis of criminal activity only if the 
PHA determines, based on a preponderance of the evidence, that any 
household member is currently engaged in or has engaged in during a 
reasonable time before the admission decision (see definition of 
``Currently engaging in or engaged in'' at 24 CFR 5.100):
    (i) Drug-related criminal activity;
    (ii) Violent criminal activity;
    (iii) Other criminal activity that would threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents; or
    (iv) Other criminal activity that would threaten the health or 
safety of the owner or any employee, contractor, subcontractor or agent 
of the owner who is involved in the owner's housing operations.
    (2) Reasonable time. The PHA may establish a period before the 
admission decision during which an applicant must not have engaged in 
the activities specified in paragraph (b)(1) of this section 
(``reasonable time''). However, prohibiting admission for a period of 
time longer than three years following any particular criminal 
activity, including prior terminations from HUD-assisted housing for 
drug-related criminal activity, is presumptively unreasonable. A PHA or 
owner may impose a longer prohibition based on particular criminal 
activity only after a PHA determination, based on empirical evidence, 
that such longer prohibition is necessary to ensuring the health, 
safety, and right to peaceful enjoyment of the premises by other 
tenants or property employees.
    (3) Effect of failure to disclose criminal record. Except where a 
PHA solely relies on self-disclosure in reviewing an applicant's 
criminal record, the PHA may deny admission for failure to disclose 
criminal record only if that criminal record would be material to an 
admissions decision pursuant to this rule and the PHA's or owner's 
admissions standards.
    (4) Previous denial. No applicant that was previously denied 
admission based on criminal activity shall be prohibited from applying 
for assistance. A PHA must not deny the application based solely on the 
prior denial.
    (5) Prohibiting admission on the basis of alcohol abuse. The PHA 
must establish standards that prohibit admission to the program if the 
PHA determines that a household member's abuse or pattern of abuse of 
alcohol may threaten the health, safety, or right to peaceful enjoyment 
of the premises by other residents or PHA employees.
    (6) Notification requirements. Before a PHA denies admission on the 
basis of criminal activity, the PHA must notify the household of the 
proposed action and provide a copy of any relevant criminal record to 
the subject of the record and the applicant (except where otherwise 
prohibited by law) no less than 15 days prior to notification of the 
denial. During the 15-day period, the PHA must provide the subject of 
any record an opportunity to dispute the accuracy and relevance of that 
record. The PHA must provide the household an opportunity to present, 
and must consider as part of an individualized assessment, any relevant 
mitigating information which may include but is not limited to the 
circumstances listed in paragraph (a)(1)(ii) of this section. If the 
PHA decides to deny admission following the individualized assessment, 
the PHA must notify the family of its decision and that the family may 
request an informal hearing in accordance with Sec.  882.514(f).
    (c) Terminating assistance--(1) General. If the law and regulation 
permit the PHA to terminate assistance or evict but does not require 
the PHA to do so based on criminal record, criminal activity, illegal 
drug use, or alcohol abuse, the PHA may take or not take the action to 
terminate assistance in accordance with the PHA standards for 
termination. Before exercising the PHA's discretion to terminate 
assistance based on criminal record, a finding of criminal activity, 
illegal drug use, or alcohol abuse, the PHA must take into account all 
the circumstances relevant to a particular termination. The 
circumstances relevant to a particular termination may include but are 
not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy;
    (ii) The effect on the community of termination or eviction; or of 
the failure of the responsible entity to take such action;
    (iii) The extent of participation by the leaseholder in the 
conduct;
    (iv) The effect of termination of assistance or eviction on 
household members not involved in the conduct;
    (v) The extent to which the leaseholder or relevant household 
member has taken reasonable steps to prevent or mitigate the offending 
action;
    (vi) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse;
    (vii) Whether the leaseholder would like the PHA to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered); and
    (viii) Whether further considerations must be made in order to 
comply with the obligation to consider and provide reasonable 
accommodations to persons with disabilities. A reasonable accommodation 
may include, for example, disregarding the conduct or record if it was 
disability-related.
    (2) Terminating assistance--(i) Terminating assistance on the basis 
of drug-related criminal activity or illegal drug use. (A) The PHA may 
terminate assistance for drug-related criminal activity engaged in on 
or near the premises by any tenant, household

[[Page 25367]]

member, or guest, and any such activity engaged in on the premises by 
any other person under the tenant's control. The PHA may terminate 
assistance if the PHA determines that a household member is illegally 
using a drug or when the PHA determines that a pattern of illegal use 
of a drug threatens the health, safety, or right to peaceful enjoyment 
of the premises by other residents or PHA employees.
    (B) The PHA must immediately terminate assistance for a family 
under the program if the PHA determines that any member of the 
household has ever been convicted of drug-related criminal activity for 
manufacture or production of methamphetamine on the premises of 
federally assisted housing.
    (ii) Terminating assistance for other criminal activity. (A) The 
PHA must establish standards that allow the PHA to terminate assistance 
for a family if the PHA determines that any household member is engaged 
in criminal activity that threatens the health, safety, or right of 
peaceful enjoyment of the premises by other residents or by persons 
residing in the immediate vicinity of the premises.
    (B) The PHA may terminate assistance for a family if the PHA 
determines that a member of the household is:
    (1) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, 
in the case of the State of New Jersey, is a high misdemeanor; or
    (2) Violating a condition of probation or parole imposed under 
Federal or State law.
    (3) Evidence of criminal activity. (i) The PHA may terminate 
assistance for criminal activity in accordance with this section if the 
PHA determines, based on a preponderance of the evidence, that the 
household member has engaged in the criminal activity. The fact that 
there has been an arrest for a crime is not a basis for the requisite 
determination that the relevant individual engaged in criminal activity 
warranting termination but the conduct that resulted in the arrest can 
be such a basis provided there is sufficient evidence that it occurred 
independent of the fact of the arrest.
    (ii) See 24 CFR part 5, subpart J, for provisions concerning access 
to criminal records.
    (4) Terminating assistance on the basis of alcohol abuse. The PHA 
must establish standards that allow termination of assistance for a 
family if the PHA determines that a household member's abuse or pattern 
of abuse of alcohol threatens the health, safety, or right to peaceful 
enjoyment of the premises by other residents.
    (d) The fact that there has been an arrest for a crime is not a 
basis for the requisite determination that the relevant individual 
engaged in criminal activity, but the conduct that resulted in the 
arrest can be such a basis provided there is sufficient evidence that 
it occurred independent of the fact of the arrest.
0
24. Add Sec.  882.519 to subpart E to read as follows:


Sec.  882.519  Owner denial or termination of tenancy on the basis of 
criminal activity, illegal drug use, or alcohol abuse.

    (a) Owner screening and terminations. (1) The owner may screen 
applicants for suitability in accordance with Sec.  882.514(c). 
However, any finding of unsuitability that is based on a criminal 
record, a finding of criminal activity, illegal drug use, or alcohol 
abuse must be in accord with the procedures and standards set out in 
this section. Criminal histories of applicants and their household 
members may be considered only in the manner and for the purposes 
described in this this section.
    (2) Any reliance on criminal activity in screening decisions is not 
permitted without an individualized assessment.
    (i) Criminal activity may be considered in the individualized 
assessment only if it is relevant to determining the risk that an 
applicant would threaten the health, safety, or right to peaceful 
enjoyment of residents or property employees.
    (ii) If a criminal activity is determined relevant, it must be 
considered alongside the factors set forth at paragraph (b) of this 
section and other relevant mitigating factors.
    (iii) An arrest record alone may not be the basis for a 
determination that an individual has engaged in criminal activity that 
warrants denial. The actions that resulted in the arrest could be 
relevant to determine the applicant's risk to engage in such conduct 
provided there is sufficient evidence independent of the arrest that 
the actions occurred and must be considered alongside the factors set 
forth at paragraph (b) of this section and other relevant mitigating 
factors.
    (3) Any owner termination of tenancy based on criminal activity, 
illegal drug use, or alcohol abuse must be in accordance with the 
procedures and requirements of this section.
    (b) Mitigating circumstances and individualized assessment--(1) 
Relevant circumstances and individualized assessment. Before denying 
admission on the basis of a criminal record, criminal activity, illegal 
drug use, or alcohol abuse, the owner must conduct an individualized 
assessment that takes into account circumstances relevant to a 
particular admission decision. The circumstances relevant to a 
particular admission decision include but are not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense, the extent to which it bears 
on suitability for tenancy, and the length of time that has passed 
since the conduct;
    (ii) The extent to which the applicant or relevant household member 
has taken actions to mitigate the risk that admission of the individual 
would adversely affect the health, safety, and peaceful enjoyment of 
the premises by other residents, the owner, or property employees 
(e.g., evidence of post-conviction rehabilitation, treatment/recovery, 
employment, housing history; treatment of a medical condition of a 
household member);
    (iii) Whether the applicant would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered);
    (iv) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination, the owner must consider 
relevant evidence, which may include evidence provided by the household 
that a household member has successfully completed substance use 
treatment services or has been otherwise rehabilitated successfully 
along with evidence that the illegal use of a controlled substance or 
abuse of alcohol (as applicable) has not recurred. For this purpose, 
the owner may require the applicant to submit evidence of the household 
member's current participation in, or successful completion of, 
substance use treatment services or that the household member is 
otherwise in recovery from drug use or alcohol abuse; and
    (v) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (2) Terminations of tenancy. Before the owner exercises discretion 
to terminate the tenancy or evict based on criminal record, illegal 
drug use, or alcohol abuse, the owner must take into account all the 
circumstances relevant to a particular termination or eviction.

[[Page 25368]]

The circumstances relevant to a particular termination or eviction may 
include but are not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy;
    (ii) The effect on the community of termination or eviction; or of 
the failure of the responsible entity to take such action;
    (iii) The extent of participation by the leaseholder in the 
conduct;
    (iv) The effect of termination of assistance or eviction on 
household members not involved in the conduct;
    (v) The extent to which the leaseholder or relevant household 
member has taken reasonable steps to prevent or mitigate the offending 
action;
    (vi) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination the owner must consider 
relevant evidence, which may include evidence provided by the household 
that a household member has successfully completed substance use 
treatment services or has been otherwise rehabilitated successfully 
along with evidence that the illegal use of a controlled substance or 
abuse of alcohol (as applicable) has not recurred. For this purpose, 
the owner may require the applicant to submit evidence of the household 
member's current participation in, or successful completion of, 
substance use treatment services or that the household member is 
otherwise in recovery from drug use or alcohol abuse;
    (vii) Whether the leaseholder would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered); and
    (viii) Whether further considerations must be made in order to 
comply with the obligation to consider and provide reasonable 
accommodations to persons with disabilities. A reasonable accommodation 
may include, for example, disregarding the conduct or record if it was 
disability-related.
    (c) Exclusion of culpable household member. The owner may require 
an applicant (or tenant) to exclude a household member from residing in 
the unit if the owner determine that household member has participated 
in or been culpable for, based on a preponderance of the evidence, 
action or failure to act that warrants denial (or termination). The 
fact that there has been an arrest is not a basis for the requisite 
determination that the relevant individual participated in or was 
culpable for the action or failure to act, but the conduct that 
resulted in the arrest can be such a basis provided there is sufficient 
evidence that it occurred independent of the fact of the arrest. The 
duration of any such exclusion shall not extend beyond the time period 
an individual could be denied admission for that action or failure to 
act and shall be reasonable in light of all relevant circumstances, 
including but not limited to the excluded household member's age and 
relationship to other household members.
    (d) Effect of failure to disclose criminal history. Except where an 
owner solely relies on self-disclosure in reviewing an applicant's 
criminal record, the owner may deny for failure to disclose criminal 
record only if that criminal record would be material to a denial 
decision under this regulations and the owner's selection standards.
    (e) Criminal activity. (1) The owner may screen and deny a 
household on the basis of criminal activity only if the owner 
determines that the household member is currently engaging in, or has 
engaged in during a reasonable time before the owner's denial decision:
    (i) Drug-related criminal activity;
    (ii) Violent criminal activity;
    (iii) Other criminal activity that would threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents; or
    (iv) Other criminal activity that would threaten the health or 
safety of the owner or any employee, contractor, subcontractor or agent 
of the owner who is involved in the housing operations.
    (2) The owner may establish a period before the admission decision 
during which an applicant must not have engaged in the activities 
specified in paragraph (e)(1) of this section (reasonable time). 
However, prohibiting admission for a period of time longer than three 
years following any particular criminal activity, including prior 
terminations from HUD-assisted housing for drug-related criminal 
activity, is presumptively unreasonable. An owner may impose a longer 
prohibition based on particular criminal activity only after a 
determination, based on empirical evidence, that such longer 
prohibition is necessary to ensuring the health, safety, and peaceful 
enjoyment of other tenants or property employees.
    (3) Before the owner makes a denial determination on the basis of 
criminal activity, the owner must notify the household of the proposed 
action and provide a copy of any relevant criminal record to the 
subject of the record and the applicant (except where otherwise 
prohibited by law) no less than 15 days prior to notification of the 
denial. During the 15-day period, the owner must provide the household 
and the subject of any record an opportunity to dispute the accuracy 
and relevance of that record. The owner must provide the household the 
opportunity to present, and the owner must take into consideration, any 
relevant mitigating information, which may include but is not limited 
to the factors set forth in paragraphs (b)(1)(i) through (v) of this 
section.
    (4) All determinations to deny the household on the basis of 
criminal activity must be supported by a preponderance of the evidence. 
The fact that there has been an arrest for a crime is not a basis for 
the requisite determination that the relevant individual engaged in 
criminal activity, but the conduct that resulted in the arrest can be 
such a basis provided there is sufficient evidence that it occurred 
independent of the fact of the arrest.
    (5) No applicant that was previously denied by the owner because of 
a determination concerning a member of the household under paragraph 
(e)(1) of this section may be denied based solely on the prior denial.

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

0
25. The authority citation for part 960 continues to read as follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 1437z-3, and 
3535(d).

0
26. Amend Sec.  960.103 by adding paragraph (e) to read as follows:


Sec.  960.103  Equal opportunity requirements and protection for 
victims of domestic violence, dating violence, sexual assault, or 
stalking.

* * * * *
    (e) State or local law. Nothing in this part is intended to pre-
empt operation of State and local laws that provide additional 
protections to those with criminal records. However, State and local 
laws shall not change or affect any requirement of this part, or any 
other HUD requirements for administration or operation of the program.
0
27. Amend Sec.  960.202 by revising paragraph (c)(2), redesignating 
paragraphs (c)(3) and (4) as paragraphs (c)(4) and (5) respectively, 
and adding new paragraph (c)(3) to read as follows:


Sec.  960.202  Tenant selection policies.

* * * * *
    (c) * * *
    (2) Be publicized by posting copies thereof in each office where 
applications are received;

[[Page 25369]]

    (3) Be made available to applicants or tenants for free upon 
request. The PHA may satisfy this requirement by posting its selection 
policies or its documents containing these policies on its website and/
or its social media account(s), in a conspicuous location and an 
accessible format, where applicable;
* * * * *
0
28. Amend Sec.  960.203 by:
0
a. Removing paragraph (b) and redesignating paragraphs (c) and (d) as 
paragraphs (b) and (c), respectively;
0
b. Revising newly redesignated paragraphs (b)(3) and (c); and
0
c. Adding a new paragraph (d).
    The revisions and addition read as follows:


Sec.  960.203  Standards for PHA tenant selection criteria.

* * * * *
    (b) * * *
    (3) A record of criminal activity involving crimes of physical 
violence to persons or property and other criminal activity which would 
adversely affect the health, safety, or welfare of other tenants or PHA 
employees. (See Sec.  960.204.) With respect to criminal activity 
described in Sec.  960.204:
    (i) The PHA may require an applicant to exclude a household member 
from residing in the unit in order to be admitted to the housing 
program where that household member has participated in or been 
culpable for actions described in Sec.  960.204 that warrants denial. 
The duration of any such exclusion shall not extend beyond the time 
period an individual could be denied admission for that action or 
failure to act and shall be reasonable in light of all relevant 
circumstances, including but not limited to the excluded household 
member's age and relationship to other household members.
    (ii) Except in those circumstances where a statute requires a PHA 
to deny admission based on criminal activity, any reliance on criminal 
activity in admissions decisions is not permitted without an 
individualized assessment. All determinations to deny admission on the 
basis of criminal activity must be supported by a preponderance of the 
evidence. The fact that there has been an arrest for a crime is not a 
basis for the requisite determination that the relevant individual 
engaged in criminal activity, but the conduct that resulted in the 
arrest can be such a basis provided there is sufficient evidence that 
it occurred independent of the fact of the arrest. A criminal record 
may be considered in the individualized assessment only if it is 
relevant to determining the risk that an applicant would threaten the 
health, safety, or right to peaceful enjoyment of residents or PHA 
employees.
* * * * *
    (c) In the event of the receipt of unfavorable information with 
respect to an applicant, consideration shall be given to the nature of 
the applicant's conduct. Before denying admission on the basis of a 
criminal record, criminal activity, illegal drug use, or alcohol abuse, 
the PHA must conduct an individualized assessment that takes into 
account circumstances relevant to a particular admission decision. The 
circumstances relevant to a particular admission decision include but 
are not limited to:
    (1) The nature and circumstances of the conduct in question, 
including the seriousness of the offense, the extent to which it bears 
on suitability for tenancy, and the length of time that has passed 
since the conduct;
    (2) The extent to which the applicant has taken actions to mitigate 
risk that admission of the individual would adversely affect the 
health, safety, and peaceful enjoyment of the premises by other 
residents or PHA employees (e.g., evidence of post-conviction 
rehabilitation, treatment/recovery, employment, housing history);
    (3) Whether the applicant would like the PHA to consider mitigating 
circumstances related to a medical condition of a household member 
(which then must be considered);
    (4) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination, the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse; and
    (5) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (d) Except where a PHA solely relies on self-disclosure in 
reviewing an applicant's criminal record, the PHA may deny admission 
for failure to disclose criminal record only if that criminal record 
would be material to an admissions decision pursuant to this rule and 
the PHA's admissions standards.
0
29. Amend Sec.  960.204 by:
0
a. Revising the section heading and paragraphs (a)(1)(i) and (ii), 
(a)(2)(i) and (ii), and (b);
0
b. Redesignating paragraphs (c) and (d) as paragraphs (d) and (e), 
respectively;
0
c. Adding a new paragraph (c); and
0
d. Revising newly redesignated paragraph (d).
    The revisions and addition read as follows:


Sec.  960.204  Denial of admission for criminal activity or drug use by 
household members.

    (a) * * *
    (1) * * *
    (i) The evicted household member who engaged in drug-related 
criminal activity is participating in or has successfully completed 
substance use treatment services approved by the PHA; or
    (ii) The circumstances leading to the eviction no longer exist (for 
example, the household member who engaged in the criminal activity has 
died or is imprisoned).
    (2) * * *
    (i) The PHA determines that any household member is currently 
engaging in illegal use of a drug (see definition of ``Currently 
engaging in or engaged in'' at 24 CFR 5.100); or
    (ii) The PHA determines that a household member's illegal use or 
pattern of illegal use of a drug would threaten the health, safety, or 
right to peaceful enjoyment of the premises by other residents or PHA 
employees.
* * * * *
    (b) Persons that abuse or show a pattern of abuse of alcohol. The 
PHA must establish standards that prohibit admission to the PHA's 
public housing program if the PHA determines that a household member's 
abuse or pattern of abuse of alcohol would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents or 
PHA employees.
    (c) Permissive prohibitions--(1) Prohibiting admission of other 
criminals. The PHA may prohibit admission of a household to the program 
only if the PHA determines that any household member is currently 
engaged in, or has engaged in during a reasonable time before the 
admission:
    (i) Drug-related criminal activity;

[[Page 25370]]

    (ii) Violent criminal activity;
    (iii) Other criminal activity which may threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents or persons residing in the immediate vicinity; or
    (iv) Other criminal activity which may threaten the health or 
safety of property management staff, or persons performing a contract 
administration function or responsibility on behalf of the PHA 
(including a PHA employee or a PHA contractor, subcontractor or agent).
    (2) Reasonable time. The PHA may establish a period before the 
admission decision during which an applicant must not have engaged in 
the activities specified in paragraph (c)(1) of this section 
(``reasonable time''). However, prohibiting admission for a period of 
time longer than three years following any particular criminal 
activity, including prior terminations from HUD-assisted housing for 
drug-related criminal activity, is presumptively unreasonable. A PHA 
may impose a longer prohibition based on particular criminal activity 
only after a PHA determination, based on empirical evidence, that such 
longer prohibition is necessary to ensuring the health, safety, and 
peaceful enjoyment of other tenants or property employees.
    (3) Previous denial. No applicant that was previously denied 
admission based on criminal activity shall be prohibited from applying 
for assistance. A PHA must not deny the application based solely on the 
prior denial.
    (d) Notification. Before a PHA denies admission on the basis of 
criminal activity, the PHA must notify the household of the proposed 
action and provide a copy of any relevant criminal record to the 
subject of the record and the applicant (except where otherwise 
prohibited by law) no less than 15 days prior to notification of the 
denial. During the 15-day period, the PHA must provide the subject of 
any record an opportunity to dispute the accuracy and relevance of that 
record. The PHA must provide the household an opportunity to present 
any relevant mitigating information which may include but is not 
limited to the relevant mitigating factors set forth at Sec.  
960.203(c)(1) through (5).
* * * * *
0
30. Amend Sec.  960.205 by revising paragraph (b)(1) to read as 
follows:


Sec.  960.205  Drug use by applicants: Obtaining information from 
substance use treatment provider.

* * * * *
    (b) * * *
    (1) Currently engaging in illegal use of a drug. See definition of 
``Currently engaging in or engaged in'' at 24 CFR 5.100.
* * * * *

PART 966--PUBLIC HOUSING LEASE AND GRIEVANCE PROCEDURE

0
31. The authority citation for part 966 continues to read as follows:

    Authority: 42 U.S.C. 1437d and 3535(d).

0
32. Amend Sec.  966.4 by:
0
a. Removing the cross-reference to ``(1)(5)'' and adding in its place a 
reference to ``(l)(5)'' in paragraph (l)(2)(iv)(A);
0
b. Revising paragraph (l)(3)(i) introductory text and the first 
sentence of paragraph (l)(3)(ii);
0
c. Revising and republishing paragraph (l)(5); and
0
d. Removing from the second sentence of paragraph (m) the word 
``tenant's'' and adding in its place the word ``PHA's''.
    The revisions read as follows:


Sec.  966.4  Lease requirements.

* * * * *
    (l) * * *
    (3) * * *
    (i) The PHA must give adequate written notice of lease termination, 
which shall not provide less notice than:
* * * * *
    (ii) The notice of lease termination to the tenant shall state 
specific grounds for termination and the specific lease provision at 
issue and shall inform the tenant of the tenant's right to make such 
reply as the tenant may wish. * * *
* * * * *
    (5) PHA termination of tenancy for criminal activity or alcohol 
abuse.--(i) Evicting tenants on the basis of drug-related criminal 
activity--(A) Methamphetamine conviction. The PHA must immediately 
terminate the tenancy if the PHA determines that any member of the 
household has ever been convicted of drug-related criminal activity for 
manufacture or production of methamphetamine on the premises of 
federally assisted housing.
    (B) Drug crime on or off the premises. The lease must provide that 
drug-related criminal activity engaged in on or off the premises by any 
tenant, member of the tenant's household or guest, and any such 
activity engaged in on the premises by any other person under the 
tenant's control, is grounds for the PHA to terminate tenancy. In 
addition, the lease must provide that a PHA may evict a family when the 
PHA determines that a household member is illegally using a drug or 
when the PHA determines that a pattern of illegal use of a drug 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.
    (ii) Evicting tenants on the basis of other criminal activity--(A) 
Threat to other residents. The lease must provide that any criminal 
activity by a covered person that threatens the health, safety, or 
right to peaceful enjoyment of the premises by other residents 
(including PHA management staff residing on the premises) or threatens 
the health, safety, or right to peaceful enjoyment of their residences 
by persons residing in the immediate vicinity of the premises is 
grounds for termination of tenancy.
    (B) Fugitive felon or parole violator. The PHA may terminate the 
tenancy if a tenant is fleeing to avoid prosecution, or custody or 
confinement after conviction, for a crime, or attempt to commit a 
crime, that is a felony under the laws of the place from which the 
individual flees, or that, in the case of the State of New Jersey, is a 
high misdemeanor; or violating a condition of probation or parole 
imposed under Federal or State law.
    (iii) Eviction for criminal activity--(A) Evidence. The PHA may 
evict the tenant by judicial action for criminal activity in accordance 
with this section if the PHA determines, based on a preponderance of 
the evidence, that the covered person has engaged in the criminal 
activity. The fact that there has been an arrest for a crime is not a 
basis for a determination that the relevant individual engaged in 
criminal activity warranting termination.
    (B) Notice to post office. When a PHA evicts an individual or 
family for criminal activity, the PHA must notify the local post office 
serving the dwelling unit that the individual or family is no longer 
residing in the unit.
    (iv) Use of criminal record. If the PHA seeks to terminate the 
tenancy for criminal activity as shown by a criminal record, the PHA 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record and the tenant 
(except where otherwise prohibited by law) with a copy of the criminal 
record before a PHA grievance hearing or court trial concerning the 
termination of tenancy or eviction. The tenant must be given an 
opportunity to dispute the accuracy and relevance of that record in the 
grievance hearing or court trial.
    (v) Cost of obtaining criminal record. The PHA may not pass along 
to the tenant the costs of a criminal records check.

[[Page 25371]]

    (vi) Evicting tenants on the basis of alcohol abuse. The PHA must 
establish standards that allow termination of tenancy if the PHA 
determines that a household member has:
    (A) Engaged in abuse or pattern of abuse of alcohol that threatens 
the health, safety, or right to peaceful enjoyment of the premises by 
other residents; or
    (B) Furnished false or misleading information concerning illegal 
drug use, alcohol abuse, or rehabilitation with respect to illegal drug 
use or alcohol abuse.
    (vii) PHA action, generally--(A) Consideration of circumstances. In 
a manner consistent with such policies, procedures and practices, the 
PHA may consider all circumstances relevant to a particular case. 
Before exercising discretion to terminate assistance or evict based on 
criminal activity, illegal drug use, or alcohol abuse, the PHA must 
take into account all the circumstances relevant to a particular 
termination or eviction. The circumstances relevant to a particular 
termination or eviction may include but are not limited to:
    (1) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy,
    (2) The effect on the community of termination or eviction; or of 
the failure of the responsible entity to take such action;
    (3) The extent of participation by the leaseholder in the conduct;
    (4) The effect of termination of assistance or eviction on 
household members not involved in the conduct;
    (5) The extent to which the leaseholder or relevant household 
member has taken reasonable steps to prevent or mitigate the offending 
action;
    (6) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse;
    (7) Whether the leaseholder would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member; and
    (8) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (B) Exclusion of culpable household member. The PHA may require a 
tenant to exclude a household member from residing in the unit in order 
to continue to reside in the assisted unit if the PHA determines that 
household member has participated in or been culpable for, based on a 
preponderance of the evidence, action or failure to act that warrants 
termination. The fact that there has been an arrest is not a basis for 
the requisite determination that the relevant individual participated 
in or was culpable for the action or failure to act, but the conduct 
that resulted in the arrest can be such a basis provided there is 
sufficient evidence that it occurred independent of the fact of the 
arrest. The duration of any such exclusion shall not extend beyond the 
time period an individual could be denied admission per admission 
criteria and shall be reasonable in light of all relevant 
circumstances, including but not limited to the excluded household 
member's age and relationship to other household members.
    (C) Nondiscrimination limitation. The PHA's eviction actions must 
be consistent with the fair housing and equal opportunity provisions of 
24 CFR 5.105 and 24 CFR part 5, subpart L.
* * * * *
0
33. Amend Sec.  966.56 by revising paragraph (b)(1) to read as follows:


Sec.  966.56  Procedures governing the hearing.

* * * * *
    (b) * * *
    (1) The opportunity to examine before the grievance hearing any PHA 
documents, including records and regulations, that are directly 
relevant to the hearing. (For a grievance hearing concerning a 
termination of tenancy or eviction, see also Sec.  966.4(m).) The 
tenant shall be allowed to copy or receive a copy of any such document 
at the PHA's expense. If the PHA does not make the document available 
for examination upon request by the complainant, the PHA may not rely 
on such document at the grievance hearing.
* * * * *

PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER 
PROGRAM

0
34. The authority citation for part 982 continues to read as follows:

    Authority: 42 U.S.C. 1437f and 3535(d).

0
35. Amend Sec.  982.53 by revising paragraph (d) to read as follows:


Sec.  982.53  Equal opportunity requirements and protection for victims 
of domestic violence, dating violence, sexual assault, or stalking.

* * * * *
    (d) State and local law. Nothing in this part is intended to pre-
empt operation of State and local laws that prohibit discrimination 
against a Section 8 voucher-holder because of status as a Section 8 
voucher-holder, or State and local laws that provide additional 
protections to those with criminal records. However, such State and 
local laws shall not change or affect any requirement of this part, or 
any other HUD requirements for administration or operation of the 
program.
* * * * *
0
36. Amend Sec.  982.54 by revising paragraph (b) to read as follows:


Sec.  982.54  Administrative Plan.

* * * * *
    (b) The administrative plan must be in accordance with HUD 
regulations and requirements. The administrative plan is a supporting 
document to the PHA plan (24 CFR part 903) and must be available for 
public review. The PHA may satisfy this requirement by posting its 
administrative plan on its website and/or its social media account(s), 
in a conspicuous location and an accessible format, where applicable. 
The PHA must revise the administrative plan if needed to comply with 
HUD requirements.
* * * * *
0
37. Amend Sec.  982.301 by revising paragraph (b)(4) to read as 
follows:


Sec.  982.301  Information when family is selected.

* * * * *
    (b) * * *
    (4) Where the family may lease a unit and an explanation of how 
portability works, including information on how portability may affect 
the family's assistance through screening, subsidy standards, payment 
standards, and any other elements of the portability process which may 
affect the family's

[[Page 25372]]

assistance, including that the receiving PHA may not rescreen a family 
that moves under the portability procedures (see Sec.  982.355(c)(9)).
* * * * *
0
38. Amend Sec.  982.306 by revising paragraphs (c)(3) and (5) to read 
as follows:


Sec.  982.306  PHA disapproval of owner.

* * * * *
    (c) * * *
    (3) The owner is currently engaging in or has engaged in, during a 
reasonable time before the decision regarding approval, any drug-
related criminal activity, violent criminal activity, or other criminal 
activity that would threaten the health, safety, or right to peaceful 
enjoyment of the premises by residents or PHA employees;
* * * * *
    (5) The owner has a history or practice of refusing an appropriate 
request by a PHA to take action to terminate tenancy of tenants of 
units assisted under Section 8 or any other federally assisted housing 
program for activity engaged in by the tenant, any member of the 
household, a guest or another person under the control of any member of 
the household that:
* * * * *
0
39. Amend Sec.  982.307 by:
0
a. Adding ``and with Sec. Sec.  982.552 and 982.553'' to the end of the 
last sentence in paragraph (a)(1); and
0
b. Revising paragraphs (a)(3) introductory text, (a)(3)(iv), and 
(b)(2);
    The revisions read as follows:


Sec.  982.307  Tenant screening.

    (a) * * *
    (3) The owner is responsible for screening of families on the basis 
of their tenancy histories. Consistent with the requirements of the 
Fair Housing Act, including those found at 24 CFR 100.500, an owner may 
consider a family's background with respect to such factors as:
* * * * *
    (iv) Drug-related criminal activity, violent criminal activity, or 
other criminal activity that is a threat to the health, safety or 
property of others; and
* * * * *
    (b) * * *
    (2) When a family wants to lease a dwelling unit, the PHA may offer 
the owner other information in the PHA possession about the tenancy 
history of the family members.
* * * * *
0
40. Amend Sec.  982.310 by revising the headings for paragraphs (c)(1) 
and (2) and revising paragraphs (c)(3) and (h)(1) through (3) to read 
as follows:


Sec.  982.310  Owner termination of tenancy.

* * * * *
    (c) * * *
    (1) Evicting tenants on the basis of drug-related criminal activity 
on or near the premises. * * *
    (2) Evicting tenants on the basis of other criminal activity. * * *
    (3) Evidence of criminal activity. The owner may terminate tenancy 
and evict by judicial action a family for criminal activity by a 
covered person in accordance with this section if the owner determines 
that the covered person has engaged in the criminal activity. This 
determination shall be made on a preponderance of the evidence. The 
fact that there has been an arrest for a crime is not a basis for the 
requisite determination that the relevant individual engaged in 
criminal activity warranting termination of tenancy or eviction 
pursuant to this section. (See 24 CFR part 5, subpart J, for provisions 
concerning access to criminal records.) The owner may terminate tenancy 
and evict by judicial action based on the conduct underlying an arrest 
if the conduct indicates that the individual is not suitable for 
tenancy and the owner has sufficient evidence other than the fact of 
arrest that the individual engaged in the conduct.
* * * * *
    (h) * * *
    (1) General. If the law and regulation permit the owner to take an 
action but do not require action to be taken, the owner may take or not 
take the action in accordance with the owner's standards for eviction. 
The owner may consider all of the circumstances relevant to a 
particular eviction case, such as:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy;
    (ii) The effect on the community of eviction or of the failure of 
the owner to take such action;
    (iii) The extent of participation by the leaseholder in the 
conduct;
    (iv) The effect of eviction on household members not involved in 
the conduct; and
    (v) The extent to which the leaseholder has taken reasonable steps 
to prevent or mitigate the offending action.
    (2) Terminations based on criminal activity, illegal drug use or 
alcohol abuse. Where eviction would be based on a finding that an 
individual is currently engaging in or has in engaged in criminal 
activity, illegal drug use, or alcohol abuse, the owner may consider 
any relevant circumstances described in paragraphs (h)(1)(i) through 
(v) of this section and may also consider any of the following:
    (i) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. Relevant evidence may include evidence provided by the 
household that a household member has successfully completed substance 
use treatment services or has been otherwise rehabilitated successfully 
along with evidence that the illegal use of a controlled substance or 
abuse of alcohol (as applicable) has not recurred. For this purpose, 
the owner may require the applicant to submit evidence of the household 
member's current participation in, or successful completion of, 
substance use treatment services or that the household member is 
otherwise in recovery from drug use or alcohol abuse; and
    (ii) Whether the leaseholder would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member.
    (3) Exclusion of culpable household member. The owner may require 
an applicant (or tenant) to exclude a household member from residing in 
the unit in order to be admitted to the housing program (or continue to 
reside in the assisted unit), if the owner determines that household 
member has participated in or been culpable for, based on a 
preponderance of the evidence, action or failure to act that warrants 
denial (or termination). The fact that there has been an arrest is not 
a basis for the requisite determination that the relevant individual 
participated in or was culpable for the action or failure to act, but 
the conduct that resulted in the arrest can be such a basis provided 
there is sufficient evidence that it occurred independent of the fact 
of the arrest.
* * * * *
0
41. Amend Sec.  982.355 by adding a sentence at the end of paragraph 
(c)(9) to read as follows:


Sec.  982.355  Portability: Administration by initial and receiving 
PHA.

* * * * *
    (c) * * *
    (9) * * * A family that moves under the portability procedures must 
not be subject to rescreening by the receiving PHA.
* * * * *
0
42. Amend Sec.  982.552 by revising paragraphs (b)(1), (c)(1) 
introductory

[[Page 25373]]

text, (c)(1)(iii) and (v), and (c)(2) and adding paragraph (f) to read 
as follows:


Sec.  982.552  PHA denial or termination of assistance for family.

* * * * *
    (b) * * *
    (1) For provisions on denial of admission and termination of 
assistance for illegal drug use, other criminal activity, and alcohol 
abuse that would threaten other residents or PHA employees, see Sec.  
982.553.
* * * * *
    (c) * * *
    (1) Grounds for denial or termination of assistance. The PHA may 
deny program assistance for an applicant, or terminate program 
assistance for a participant, for any of the following grounds:
* * * * *
    (iii) If a PHA has terminated assistance under the program for any 
member of the family;
* * * * *
    (v) If the family currently owes rent or other amounts to the PHA 
or to another PHA in connection with Section 8 or public housing 
assistance under the 1937 Act, other than amounts subject to a payment 
agreement in good standing;
* * * * *
    (2) Consideration of circumstances. In determining whether to deny 
or terminate assistance because of action or failure to act by members 
of the family:
    (i) The PHA may consider all relevant circumstances such as the 
seriousness of the case, the extent of participation or culpability of 
individual family members, mitigating circumstances related to the 
disability of a family member, and the effects of denial or termination 
of assistance on other family members who were not involved in the 
action or failure. With respect to denials of admission that involve 
criminal activity, illegal drug use, or alcohol abuse the requirements 
at Sec.  982.553(a) apply. With respect to termination of assistance 
that involve criminal activity, illegal drug use, or alcohol abuse the 
requirements at Sec.  982.553(b) apply.
    (ii) The PHA may impose, as a condition of continued assistance for 
other family members, a requirement that other family members who 
participated in or were culpable for the action or failure will not 
reside in the unit for a reasonable period of time not to exceed the 
amount of time such household member could be excluded for that action 
or failure per admission criteria. The PHA may permit the other members 
of a participant family to continue receiving assistance.
    (iii) If the family includes a person with disabilities, the PHA 
decision concerning such action is subject to consideration of 
reasonable accommodation in accordance with part 8 of this title.
    (iv) The PHA's admission and termination actions must be consistent 
with fair housing and equal opportunity provisions of 24 CFR 5.105, and 
with the requirements of 24 CFR part 5, subpart L.
    (v) In determining whether to terminate assistance on the basis of 
criminal activity, the PHA may stay the termination hearing while the 
criminal court case for the underlying activity is pending.
* * * * *
    (f) Effect of failure to disclose criminal record. Except where a 
PHA solely relies on self-disclosure in reviewing an applicant's 
criminal record, the PHA may deny admission for failure to disclose 
criminal record only if that criminal record would be material to an 
admissions decision pursuant to this rule and the PHA's or owner's 
admissions standards.
0
43. Revise Sec.  982.553 to read as follows:


Sec.  982.553  Denial of admission and termination of assistance on the 
basis of criminal activity, illegal drug use, or alcohol abuse.

    (a) Denial of admission--(1) General. If the law and regulation 
permit the PHA to deny admission but do not require denial of admission 
based on a criminal record, a finding of criminal activity, illegal 
drug use, or alcohol abuse, the PHA may take or not take the action in 
accordance with the PHA standards for admission. All determinations to 
deny admission on the basis of criminal activity must be supported by a 
preponderance of the evidence. An arrest record alone may not be the 
basis for a determination that an individual has engaged in criminal 
activity that warrants denial of admission. The actions that resulted 
in the arrest could be relevant to determine the applicant's risk to 
engage in such conduct provided there is sufficient evidence 
independent of the arrest that the actions occurred and must be 
considered alongside the factors set forth at paragraph (a)(2) of this 
section and other relevant mitigating factors.
    (2) Relevant circumstances and individualized assessment. Before 
denying admission on the basis of a criminal record, criminal activity, 
illegal drug use, or alcohol abuse, the PHA must conduct an 
individualized assessment that takes into account circumstances 
relevant to a particular admission decision. The circumstances relevant 
to a particular admission decision include but are not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense, the extent to which it bears 
on suitability for tenancy, and the length of time that has passed 
since the conduct;
    (ii) The extent to which the applicant or relevant household member 
has taken actions to mitigate the risk that admission of the individual 
would adversely affect the health, safety, and peaceful enjoyment of 
the premises by other residents, the owner, or property employees 
(e.g., evidence of post-conviction rehabilitation, treatment/recovery, 
employment, housing history; treatment of a medical condition of a 
household member);
    (iii) Whether the applicant would like the PHA to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered);
    (iv) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination, the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse; and
    (v) Whether further considerations must be made in order to comply 
with the obligation to consider and provide reasonable accommodations 
to persons with disabilities. A reasonable accommodation may include, 
for example, disregarding the conduct or record if it was disability-
related.
    (3) Prohibiting admission on the basis of drug-related criminal 
activity. (i) The PHA must prohibit admission to the program of an 
applicant for three years from the date of eviction if a household 
member has been evicted from federally assisted housing for drug-
related criminal activity. However, the PHA may admit the household if 
the PHA determines:

[[Page 25374]]

    (A) That the evicted household member who engaged in drug-related 
criminal activity is participating in or has successfully completed 
substance use treatment services; or
    (B) That the circumstances leading to eviction no longer exist (for 
example, the household member who engaged in the criminal activity has 
died or is imprisoned).
    (ii) The PHA must establish standards that prohibit admission if:
    (A) The PHA determines that any household member is currently 
engaging in illegal use of a drug (see definition of ``Currently 
engaging in or engaged in'' at 24 CFR 5.100);
    (B) The PHA determines that a household member's illegal drug use 
or a pattern of illegal drug use threatens the health, safety, or right 
to peaceful enjoyment of the premises by other residents or PHA 
employees; or
    (C) Any household member has ever been convicted of drug-related 
criminal activity for manufacture or production of methamphetamine on 
the premises of federally assisted housing.
    (4) Prohibiting admission on the basis of other criminal activity--
(i) Mandatory prohibition. The PHA must establish standards that 
prohibit admission to the program if any member of the household is 
subject to a lifetime registration requirement under a State sex 
offender registration program. In this screening of applicants, the PHA 
must perform criminal history background checks necessary to determine 
whether any household member is subject to a lifetime sex offender 
registration requirement in the State where the housing is located and 
in other States where the household members are known to have resided.
    (ii) Permissive prohibitions. (A) The PHA may prohibit admission of 
a household to the program on the basis of criminal activity only if 
the PHA determines that any household member is currently engaged in, 
or has engaged in during a reasonable time before the admission:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity that would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents or 
persons residing in the immediate vicinity; or
    (4) Other criminal activity that would threaten the health or 
safety of the owner, property management staff, or persons performing a 
contract administration function or responsibility on behalf of the PHA 
(including a PHA employee or a PHA contractor, subcontractor or agent).
    (B) The PHA may establish a period before the admission decision 
during which an applicant must not have engaged in the activities 
specified in paragraph (a)(3)(ii) of this section (``reasonable 
time''). However, prohibiting admission for a period of time longer 
than three years following any particular criminal activity, including 
prior terminations from HUD-assisted housing for drug-related criminal 
activity, is presumptively unreasonable. A PHA or owner may impose a 
longer prohibition based on particular criminal activity only after a 
PHA determination, based on empirical evidence, that such longer 
prohibition is necessary to ensuring the health, safety, and peaceful 
enjoyment of other tenants or property employees.
    (C) No applicant that was previously denied admission based on 
criminal activity shall be prohibited from applying for assistance. A 
PHA must not deny the application based solely on the prior denial.
    (1) Prohibiting admission on the basis of alcohol abuse. The PHA 
must establish standards that prohibit admission to the program if the 
PHA determines that a household member's abuse or pattern of abuse of 
alcohol threatens the health, safety, or right to peaceful enjoyment of 
the premises by other residents or PHA employees.
    (2) [Reserved]
    (b) Terminating assistance. (1) General. If the law and regulation 
permit the PHA to terminate assistance but does not require the PHA to 
do so based on criminal record, criminal activity, illegal drug use, or 
alcohol abuse, the PHA may take or not take the action to terminate 
assistance in accordance with the PHA standards for termination. Before 
exercising the PHA's discretion to terminate assistance based on 
criminal record, a finding of criminal activity, illegal drug use, or 
alcohol abuse, the PHA must take into account all the circumstances 
relevant to a particular termination. The circumstances relevant to a 
particular termination may include but are not limited to:
    (i) The nature and circumstances of the conduct in question, 
including the seriousness of the offense and the extent to which it 
bears on fitness for continued tenancy,
    (ii) The effect on the community of termination or eviction; or of 
the failure of the responsible entity to take such action;
    (iii) The extent of participation by the leaseholder in the 
conduct;
    (iv) The effect of termination of assistance or eviction on 
household members not involved in the conduct;
    (v) The extent to which the leaseholder or relevant household 
member has taken reasonable steps to prevent or mitigate the offending 
action;
    (vi) Whether the relevant circumstances provide reason to believe 
such conduct will recur and rise to the level that it may interfere 
with the health, safety, or right to peaceful enjoyment of the premises 
by others. In making this determination the PHA must consider relevant 
evidence, which may include evidence provided by the household that a 
household member has successfully completed substance use treatment 
services or has been otherwise rehabilitated successfully along with 
evidence that the illegal use of a controlled substance or abuse of 
alcohol (as applicable) has not recurred. For this purpose, the PHA may 
require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, substance use 
treatment services or that the household member is otherwise in 
recovery from drug use or alcohol abuse;
    (vii) Whether the leaseholder would like the owner to consider 
mitigating circumstances related to a medical condition of a household 
member (which then must be considered); and
    (viii) Whether further considerations must be made in order to 
comply with the obligation to consider and provide reasonable 
accommodations to persons with disabilities. A reasonable accommodation 
may include, for example, disregarding the conduct or record if it was 
disability-related.
    (2) Terminating assistance on the basis of drug-related criminal 
activity. (i) The PHA must establish standards that allow the PHA to 
terminate assistance for a family under the program if the PHA 
determines that:
    (A) Any household member is currently engaged in any illegal use of 
a drug; or
    (B) A pattern of illegal use of a drug by any household member 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other residents or PHA employees.
    (ii) The PHA must immediately terminate assistance for a family 
under the program if the PHA determines that any member of the 
household has ever been convicted of drug-related criminal activity for 
manufacture or production of methamphetamine on the premises of 
federally assisted housing.
    (iii) The PHA must establish standards that allow the PHA to 
terminate assistance under the program for a family if the PHA 
determines that any family member has violated the family's obligation 
under Sec.  982.551 not

[[Page 25375]]

to engage in any drug-related criminal activity.
    (3) Terminating assistance on the basis of other criminal activity. 
The PHA must establish standards that allow the PHA to terminate 
assistance under the program for a family if the PHA determines that 
any household member has violated the family's obligation under Sec.  
982.551 not to engage in violent criminal activity.
    (4) Terminating assistance on the basis of alcohol abuse. The PHA 
must establish standards that allow termination of assistance for a 
family if the PHA determines that a household member's abuse or pattern 
of abuse of alcohol threatens the health, safety, or right to peaceful 
enjoyment of the premises by other residents or PHA employees.
    (c) Evidence of criminal activity. The PHA may terminate assistance 
for criminal activity by a household member as authorized in this 
section if the PHA determines, based on a preponderance of the 
evidence, that the household member has engaged in the activity. The 
fact that there has been an arrest for a crime is not a basis for the 
requisite determination that the relevant individual engaged in 
criminal activity warranting termination but the conduct that resulted 
in the arrest can be such a basis provided there is sufficient evidence 
that it occurred independent of the fact of the arrest.
    (d) Notification requirements--(1) Admissions decisions. (i) Before 
a PHA denies admission on the basis of criminal activity, the PHA must 
notify the household of the proposed action and provide a copy of any 
relevant criminal record to the subject of the record and the applicant 
(except where otherwise prohibited by law) no less than 15 days prior 
to notification of the denial. During the 15-day period, the PHA must 
provide the subject of any record an opportunity to dispute the 
accuracy and relevance of that record. The PHA must provide the 
household an opportunity to present any relevant mitigating information 
which may include but is not limited to the circumstances listed at 
982.553(a)(2).
    (ii) While a PHA is determining whether there are grounds for 
denial of admission based on criminal activity, the PHA cannot issue a 
voucher to the family, enter into a HAP contract or approve a lease, or 
process or provide assistance under the portability procedures.
    (2) Use of a criminal record for termination of assistance. If a 
PHA proposes to terminate assistance for criminal activity as shown by 
a criminal record, the PHA must notify the household of the proposed 
action to be based on the information and must provide the subject of 
the record and the tenant(except where otherwise prohibited by law) 
with a copy of the criminal record. The PHA must give the family an 
opportunity to dispute the accuracy and relevance of that record in 
accordance with Sec.  982.555.
    (3) Cost of obtaining criminal record. The PHA may not pass along 
to the tenant the costs of a criminal records check.
    (e) Applicability of 24 CFR part 5, subpart L. The requirements in 
24 CFR part 5, subpart L apply to this section.
0
44. Amend Sec.  982.555 by revising the section heading and paragraph 
(e)(2)(i) to read as follows:


Sec.  982.555  Informal hearing.

* * * * *
    (e) * * *
    (2) * * *
    (i) By family. The family must be given the opportunity to examine 
before the PHA hearing any PHA documents that are directly relevant to 
the hearing, including those that were used to make the determination 
that the family violated the family obligations and are grounds for 
termination. If requested, the family must be allowed to copy or be 
provided copies of any such document at the PHA's expense. If the PHA 
does not make the document available for examination on request of the 
family, the PHA may not rely on the document at the hearing.
* * * * *

    Dated: March 19, 2024.
Marcia L. Fudge,
Secretary.
[FR Doc. 2024-06218 Filed 4-9-24; 8:45 am]
BILLING CODE 4210-67-P