What You Need to Know About NYC’s Fair Chance for Housing Act

The Fair Chance for Housing Act—Local Law 24 of 2024—is set to take effect on Jan. 1, 2025. It’s the latest expansion of the city’s Human Rights Law, which prohibits discrimination in housing, employment, and public accommodations. The Human Rights Law includes a number of protected categories such as age, gender, disability, race, and national origin. And it’s been amended and expanded a number of times over the years to address the multiple forms of discrimination that impact New Yorkers.

The Human Rights Law has banned discrimination in employment on the basis of criminal history since 2021. Now, with Local Law 24, this protection extends to housing. Owners will be unable to deny housing solely based on an applicant’s criminal history, with only a few limited exceptions. To prepare for the law’s implementation, owners need to reassess their application and screening processes. It will be necessary to update screening policies, train employees, and carefully vet third-party screening agencies to ensure compliance. 

We’ll go over what you need to know to comply with Local Law 24. We’ll highlight when a criminal background check can be ordered and, even then, what criminal history may be considered. Also, we’ll go over the strict process imposed by the law for those instances when you may reject an applicant based on his or her “reviewable criminal history.” Ignoring the law’s requirements could lead to legal consequences, including investigations by the NYC Commission on Human Rights, civil lawsuits, or administrative proceedings. 

Reviewable Criminal History

Beginning in 2025, owners may be found liable for discrimination for improperly rejecting applicants based on their criminal histories. Owners also may be liable for failing to follow the proper procedures when considering their applications. The law restricts the criminal history that housing providers can consider in the application process. The term “reviewable criminal history” refers to certain types of convictions owners are allowed to consider:

• Registered sex offenses. These are any convictions registered on any state or federal sex offense registries. There are no time-related lookback restrictions with this category. 
• Felony convictions. Only those convictions where the individual was released from incarceration (if applicable) or sentenced (if not incarcerated) within the past five years.
• Misdemeanor convictions. Only those for which the individual was released from incarceration (if incarcerated) or sentenced (if not incarcerated) within the last three years.

Convictions more than the stated periods, arrests without conviction, sealed or pardoned convictions, and a number of other convictions such as those from outside jurisdictions for health, reproductive, gender-affirming care or cannabis possession are not reviewable and may not be the basis for an adverse housing decision.

Since many owners rely on third-party screening companies to perform criminal background checks, it’s important to note that the law establishes that owners remain liable for any violations committed by these screening companies. If an owner receives background information from a screening company that includes anything other than “reviewable criminal history,” the law presumes that the owner relied on this improper information. This presumption can be overturned only if the owner demonstrates strict adherence to the “Fair Chance Housing Process” and proves they didn’t use the improperly provided information to deny the lease [NYC Admin. Code §8-107(5)(o)(7)].

Fair Chance Housing Process

To ensure that applicants are evaluated fairly and given an opportunity to address any concerns related to their criminal history, the law requires owners choosing to consider reviewable criminal history to follow a specific process.

Pre-qualification stage. Under Local Law 24, owners are not allowed to take an applicant’s criminal history into consideration before pre-approving or pre-qualifying a person based on other qualifications such as financial stability or rental history. A criminal background check can be ordered only when an applicant has passed the initial vetting and has been offered a lease pending a criminal background check.

Notification. After prequalifying an applicant, owners must inform the applicant that a criminal background check will be conducted and provide them with a written copy of the city’s Fair Chance Housing notice, which outlines their rights under the law. Currently, the NYC Commission on Human Rights has not yet published the Fair Chance Housing Notice.

Individualized assessment. If the background check reveals reviewable criminal history, the housing provider must assess how this history is relevant to a legitimate business interest and consider any supplemental information the applicant provides.

Remember that the law restricts what criminal history can be taken into account. Owners may consider only registered sex offenses, recent misdemeanor convictions that occurred within the past three years, and felony convictions within the last five years. All other records, including sealed or expunged convictions and older offenses, are excluded and cannot be used as grounds for rejection.

Adverse action notice. If deciding to reject the applicant based on the criminal history, the owner must:

• Provide the applicant with a copy of the information or records used in making the decision.
• Offer a written explanation of how the criminal history is relevant to a legitimate business interest and how any information submitted in support of the tenancy was taken into consideration.
• Allow the applicant at least five business days to respond with any corrections or additional information that may correct errors or provide mitigating evidence. If the applicant chooses to submit such information, owners must conduct another individualized assessment before making a final decision.

Local Law 24 Exemptions

The law includes important exemptions, such as owner-occupied two-family homes and situations where the owner or family lives on the premises. It also does not override other federal, state, or local mandates requiring background checks, such as for certain public housing programs like NYCHA.