NJAA Opposes Bill Limiting Use of Credit Screening of Applicants for Affordable Housing
June 12, 2015
NJAA opposed S-1585, sponsored by Senator Turner (D-Mercer). The bill would prohibit the use of credit scores in evaluating the creditworthiness of applicants seeking to rent either affordable housing or market-rate housing while utilizing federal or State tenant-based rental assistance vouchers. Additionally, the bill sets forth specific criteria that apartment owners may use to evaluate such applicants.
NJAA’s testimony noted several broad concerns with the bill. Apartment owners use various criteria for screening tenant applications, including credit history, rental history, and criminal background. However, fair housing laws require that apartment owners apply these standards uniformly to all applications. By restricting the use of clear and accepted measures of financial responsibility, S-1585 creates significant legal liability for the operators of affordable housing communities. Additionally, prudent tenant screening is necessary to ensure that residents are able to pay their rent obligations. As rent losses can threaten the viability of an affordable community, S-1585 creates disincentives to make new units of affordable housing available and runs counter to the sponsor’s goal of expanding access to affordable housing.
In response to concerns raised by the NJAA, the bill was moved to the discussion-only agenda. As such, while the committee took testimony, there was no action on the bill. NJAA looks forward to a continued dialog with sponsors and stakeholders on this bill.