A raft of new tenancy laws are shaping who landlords can rent to

As any landlord can attest, Tenant screening is one of the most important aspects of running a profitable business. Just your screening Does not violate fair housing guidelines (Discrimination based on age, race, sexual orientation, disability, religion, national origin or family status) Landlords are generally free to judge who they can rent to, all things being equal between candidates.

However, a slew of new housing laws in California, New York and elsewhere could remove previous red flags that landlords might use to disqualify potential tenants. Here’s what you need to know.

Deny rental or eviction based on criminal activity

according to Assembly Bill 1418California landlords will no longer be able to create “crime-free” housing plans that include refusing to rent or expel Persons with previous criminal convictions. Nuisance laws were initially touted as a way to combat crime and nuisance behaviour.

The law was enacted by different cities to varying degrees and drew on strong Support from police, prosecutors and politicians to help keep communities safe, especially in areas with drug and gang-related problems. However, a Los Angeles Times Minority groups disproportionately affected, unable to access housing after prison terms, survey finds arrivedpreventing them from finding accommodation.

Limits on the amount a tenant must pay up front

california landlord will no longer be able to Charge more than one month’s rent as margin. Parliamentary Bill 12 California limits the amount a landlord can charge for a month’s deposit. New York passed the same one-month bond bill in 2019. Varies by statesome states, such as Florida, impose no restrictions.

Bad credit is not a reason to deny an application

Run a credit check Traditionally a way to screen tenants, but may be in vain In some places. california bill SB 267 If the landlord/property manager has a government rent subsidy (e.g. Section 8), the landlord/property manager is prohibited from using someone’s credit history in the application process without providing the applicant with a verifiable legal means of paying a portion of their rent Alternative evidence options.

under California law, if the tenant has a Section 8 certificate, the landlord cannot refuse to rent to them. They cannot post “No Section 8” or “No Coupons” on rental ads, nor can they ask to see your Section 8 eligibility before renting.

The landlord must have a good reason for not renewing the tenant’s lease

The law is similar to laws recently passed in California, Oregon and Washington. In New York City, landlords must have Justification Not renewing tenant’s lease. Elsewhere in the state, municipalities can adopt it at their own discretion.

The exact criteria for “just cause” include non-payment of rent, illegal conduct, the owner trying to change the use of the apartment from residential to another use (such as commercial space), or the owner wanting to demolish the building.

Previously, tenants in New York City who lived in a single-family home with a square footage of less than 10 unit, or if the landlord lives in the building, as long as the landlord does not own multiple other buildings.

The rationale behind new tenant protections

Rapid rent increases and end of coronavirus protections lead to homelessness Soared to 12% Some 653,000 people were homeless at the end of 2023, the highest number since modern statistical surveys began in 2007 and an increase of more than 70,000 people on the previous year.

This number is even more alarming because homelessness has been on a downward trend since 2012. Highlighting the “urgent need” to support proven solutions.

Jeff Olivet, executive director of the Interagency Council on Homelessness, told The Associated Press: “The most important reason is the shortage of affordable housing and the high cost of housing, which has led to many Americans living paycheck to paycheck. A crisis away from homelessness.

Homelessness in California and New York

California has shifted to a pro-development stance to combat a rising wave of homelessness, reduce the threat of anti-development lawsuits and sidestep zoning law restrictions. The new law includes The green light is on Tenancy laws facilitate the provision of housing for tenants, and hard Turn around and leave.

However, instilling these policies has been controversial due to the state’s powerful landlord lobby. Governor Gavin Newsom has taken a two-pronged approach —Cleaning up homeless encampments While promoting Small house as a scalable solution.

In New York, use bring Also approved. In New York City, homelessness is already a serious problem A two-year high. An estimated 4,140 people alive The number of unsheltered people increased 2.4% from last year’s 4,042, the highest level since 2005, when the city Start an investigation.

While many believe the 70,000 migrants seeking asylum every night are the problem, New York City’s social services commissioner Molly Vasso Park says during an interview New York Times The city found no evidence of a “systematic increase in the number of unsheltered asylum seekers.” Mayor Eric Adams’ administration has made addressing homelessness a priority since the pandemic led to a surge in homelessness, but it faces an uphill battle.

final thoughts

Appeared in all major cities across the country Homelessness surges As a result, they made tenant protections and affordable housing key components of their legislation. As a result, the housing crisis means landlords who can provide affordable housing are in a coveted position in cities across the country, especially New York City and various cities in California.

although Section 8 Housing has traditionally been a contentious issue for landlords, in part because inspector Expensive repairs and upgrades may be proposed before an apartment is approved, but for landlords who master the Section 8 process, it can be a win-win proposition because Section 8 pays guaranteed market rent. However, collecting the tenant’s portion is often another issue landlords face, leading many to write it off in lieu of guaranteed income.

Section 8 is traditionally the starting point for a small landlord’s investment career. These apartments are often located in affordable areas, and as long as they pass the inspection, they can obtain high rents. The downside, especially with new tenancy laws coming into effect, is that landlords may not be able to select tenants as well as before. If the property is damaged by a second 8 tenant, then extremely difficult The landlord can claim this fee back. So they have to pay out of pocket to pass another inspection and rent again. Many landlords would rather forego the hassle.

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Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.