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.

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.

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.

This article is featured in the Spring 2023 issue of For All, the magazine of the Opportunity & Inclusive Growth Institute