As Landlords Intensify Tenant Background Checks, Some Lawmakers Want New Limits On Screening
In response to California’s broad protections for those unable to pay rent during the pandemic, landlords have intensified their screening of new tenants.
It’s now common for L.A. landlords to demand that applicants show months of paystubs verifying high incomes, proof of timely rent payments during the pandemic and excellent credit scores.
After two years of state and local eviction protections, landlords say they’re fearful of taking in non-paying tenants. But their increasingly strict screening has left many renters all but shut out of L.A.’s housing market.
The intense scrutiny has even prompted some L.A. lawmakers to propose new limits on screening practices. City councilman Mike Bonin said these mounting barriers are hurting the city’s ability to reduce homelessness.
“Unless we start chipping away at the various different systemic roadblocks to getting people off the street, we're never going to get through this crisis,” Bonin said.
Only Those With Stellar Credit Need Apply
A recent listing for a two-bedroom apartment in Glendale started by highlighting the unit’s perks: stainless steel appliances, gated parking and proximity to the Americana at Brand mall.
Then, in all capital letters, the ad listed the requirements for new tenants:
- All applicants had to show monthly income of at least three times the $2,195 rent.
- They had to prove they reliably paid rent at their previous address.
- And they needed an excellent credit score — 750 or higher.
Sandra Chandler, the landlord who posted the listing, said she disqualified any applicant who didn’t meet these criteria. “I couldn’t take them,” she said. “Because I couldn’t take a chance.”
Chandler said before the pandemic, she never asked for proof of past rent payments. And back then, she was willing to consider tenants with lower credit scores.
She hasn't had a non-paying tenant yet, but she said state and local renter protection laws have forced her to be more selective.
“My requirements have gone up because I've been put in that position by the government,” Chandler said. “The government doesn't care if I can pay my mortgage. They don't care if I can eat. They don't care if I can pay for my bills. I have to protect myself.”
This wariness from landlords is leading to long, demoralizing apartment searches for L.A. renters with spotty incomes, less than stellar credit and those who’ve sought government rent relief during the pandemic.
For Many L.A. Renters, The Search Can Feel Endless
Last year, Latasha Williams spent months unsuccessfully looking for a new apartment in Los Angeles. Without a good credit score, she never got far with landlords.
“They don't even care how much your income is,” Williams said. “There's not that many places where you can go that will allow you to move in without being discouraged about your credit.”
Williams said her credit score dropped after her identity was stolen in 2020 (she said she’s working with the major credit bureaus to fix her rating). When she applied for apartments, often online, she rarely got a chance to explain her credit situation.
They don't even care how much your income is.
Williams searched for new places on a daily basis. On her days off, she drove to open houses where she’d find a dozen other applicants competing for the same spot. The search wore on her nerves. And it drained her bank account. She spent money on gas — and even more on application fees, “about $300 a month just for different applications,” she said.
Williams was only able to find a place after she unexpectedly received a letter from the city of Santa Ana last November. Years ago, she applied for a housing choice voucher while working at a post office in Santa Ana. The letter said she’d been selected in the city’s voucher lottery.
In March, Williams packed up and left Los Angeles with her 10-year-old son, using her new voucher to move into a new two-bedroom apartment in Santa Ana.
“I don't really know nobody out here, and everything is just fresh and new,” Williams said. “It’s a big move, but it's the best move I've ever made.”
Landlords Blame Lawmakers For Tougher Screenings
Statewide eviction protections for renters harmed by the COVID-19 pandemic have now expired, but they continue in the city of Los Angeles. This protection — along with a freeze on rent hikes in rent-controlled apartments — will continue until the city declares an end to its ongoing “emergency period.”
Landlords say as long as the city continues its tenant protections, they’ll have no choice but to thoroughly screen new tenants, weeding out those who can’t be trusted to pay their rent.
“Housing providers don't feel they can rely on the legal processes to rescue them when a tenant refuses to pay,” said Fred Sutton, an L.A. area spokesman for the California Apartment Association. “Some may be less inclined to take a chance on a resident with a riskier profile, because based on the past two years, no one's coming to help the housing provider.”
Housing providers don't feel they can rely on the legal processes to rescue them when a tenant refuses to pay.
The state’s rent relief program has paid out more than $1.6 billion to clear the debts of L.A. County renters. In the vast majority of cases, that money has gone directly to landlords. However, many landlords are still waiting for funds. And some have been cut off from the relief.
“I do not blame rental property owners for imposing stricter screening criteria when stories abound about owners not getting paid or being taken advantage of by renters,” said Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles.
But housing advocates argue that current approaches to screening give landlords a false impression of a tenant’s ability to pay. They say credit reports don’t capture on-time rent payments. Instead, they penalize people for prioritizing rent over other debts.
“Many tenants during the pandemic have been paying for rent before they pay for food, medical care, clothes and other necessities,” said Sarah Rogozen, a staff attorney with Public Counsel working on homelessness prevention.
“The prospective landlord is going to look at that credit report and they're not going to see the rents. They're going to see that [tenants] had trouble paying a credit card bill for food,” she said.
City Council Members Want Credit Scores Off The Table
Arguing that the city has a duty to promote fair access to housing, three city council members have put forward a motion seeking to ban landlords from screening tenants based on credit scores, eviction records, applications for rent relief and failure to pay rent during the pandemic.
The proposal would also prohibit the use of algorithmic screening tools. Housing advocates say these automated background checks are riddled with errors, and promote racial discrimination. Research from the Urban Institute shows that median credit scores are significantly lower (695) in L.A. communities of color than in the region’s majority-white communities (745).
Councilwoman Nithya Raman, who co-authored the motion with Mike Bonin and Marqueece Harris-Dawson, said screening often prevents Angelenos with federally-funded Emergency Housing Vouchers from exiting homelessness.
“Finding landlords who are willing to take those vouchers — even when the voucher amount matches the rent that they're asking for — has been challenging,” Raman said.
According to the U.S. Department of Housing and Urban Development, out of the 3,365 vouchers awarded to the city of L.A., only 90 are currently being used to lease an apartment.
Under a 2020 state law, California landlords can no longer reject applicants based on their use of a government-funded voucher. But housing advocates say factors like credit scores are now being used as a pretext to turn down voucher-holders. Raman said she and her colleagues want to remove hurdles standing in the way of those vouchers being used.
“How do we reform the system so that it's easier for people to get indoors?” Raman asked.
But if the proposal were to pass, some landlords and property managers wonder what criteria they would be allowed to use under the new rules.
Irma Vargas, chief financial officer of Southern California property management company RST & Associates, said, “Credit score is one of the things that lets us know: do tenants pay on time? Do they have a pattern of paying on time? That's not something that's subjective. It's a fact. It's something that they actually do.”
Proposal Has Yet To Come Up For A Vote
The city council motion was introduced in March. Councilman Gil Cedillo, chair of the housing committee, has not yet scheduled it for a committee vote.
Cedillo’s office told LAist, “The Councilman agrees with the aims of the motion to open access to rental housing and eliminate discrimination,” but that scheduling has yet to be determined.
Until L.A. screening patterns change, tenants like Eric Strait will continue to face an uphill battle when looking for a new apartment. Strait said collections related to a surgery he underwent years ago have left black marks on his credit.
“Unless your credit is stellar, you're not even gonna get a call. You're not gonna get a look,” Strait said.
Strait said in the past, L.A. landlords were willing to overlook his low credit score when they saw his steady stream of income. But now, after five months of constantly searching and paying around $60 in fees for each application, Strait said he’s made no progress.
“By the end of the month I've spent $1,000 and I have nothing to show for it,” Strait said. “It's discouraging. Maybe it's just time to pack up and leave. You know, Vegas is pretty cheap.”