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Unintended consequences of limiting rental screening

Limiting how landlords screen prospective tenants is intended to promote housing access. But might it unintentionally result in other forms of discrimination?

April 17, 2023


Lisa Camner McKay Senior Writer, Institute
Nina Leo Creative Director
Corner of building with bar graph overlay
Nina Leo/Minneapolis Fed; Getty Images
Unintended consequences of limiting rental screening

To increase access to rental housing, some city governments have contemplated policies that restrict landlords’ ability to use certain information when screening tenants. Long-standing biases in education, labor markets, and the criminal justice system mean some racial groups are more likely than others to be filtered out. Intuitively, limiting screening criteria should expand access.

Since June 2020, Minneapolis landlords may not use certain information to screen applicants, including:

  • Credit scores
  • Misdemeanors older than 3 years
  • Felonies older than 7 years
  • Evictions older than 3 years

This was the motivation for a 2020 policy in Minneapolis, providing a natural experiment for Institute visiting scholar Marina Mileo Gorzig and Deborah Rho to study how the new protections would affect discrimination against potential tenants. For six months before and six months after the new policy went into effect, Gorzig and Rho sent fictious emails to publicly advertised rental units using names that are strongly associated with one of three groups: White Americans, Black Americans, or Somali Americans.

The economists replied to more than 6,700 rental listings in Minneapolis and St. Paul, a similar rental market that lacks the new screening protections.

Screenshot of rental email inquiry with three samples of potential renter names
Screenshot of rental email inquiry with three samples of potential renter names

Bias and stereotyping

For Minneapolis rentals with two-plus bedrooms, the share of emails that received a positive response declined when signed with Black or Somali names, and increased when signed with White names. This was not the same response pattern as in St. Paul, suggesting it is Minneapolis’ new policy that caused the change. The analysis suggests that in the rental market, limiting certain information about applicants can have the unintended effect of increasing group discrimination—in this case, stereotyping based solely on name. The results echo those of “ban-the-box" policies, where limiting information about a job candidate’s criminal record can lead hiring managers to fall back on group stereotypes instead.

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Lisa Camner McKay
Senior Writer, Institute

Lisa Camner McKay is a senior writer with the Opportunity & Inclusive Growth Institute at the Minneapolis Fed. In this role, she creates content for diverse audiences in support of the Institute’s policy and research work.