There is an emerging trend within the real estate sector involving the utilization of Artificial Intelligence, exemplified by tools like ChatGPT, Bard, Bing, and other similar products commonly referred to as chatbots, all for the purpose of enhancing marketing strategies. Numerous companies are harnessing the potential of AI to formulate advertising approaches, conduct market analysis, shape advertising content, and create social media posts. While AI does have certain benefits, it also brings forth certain drawbacks. These chatbots, in particular, exhibit vulnerabilities that introduce a level of risk when employed in marketing and advertising endeavors.
One significant concern pertains to the concept of "hidden bias." In certain instances, the algorithms integrated into chatbots incorporate the subtle prejudices of their creators. Moreover, these bots can internalize biases from their interactions. A notable case in 2018 involved Amazon discontinuing the use of an AI-driven recruitment system due to its demonstrated preference for male candidates over female candidates. This bias stemmed from the system’s analysis of historical resumes submitted to Amazon over a decade, which were disproportionately skewed toward male applicants. Consequently, AI developed a preference for male candidates.
Though AI has the potential to stimulate creative thinking, exercising caution is paramount before deploying it for advertising and marketing purposes. It is advisable that individuals well-versed in fair housing regulations and possessing relevant experience assess the AI-generated content to ascertain its lack of inadvertent bias.
Furthermore, it is unwise to solely rely on AI for determining advertising avenues. Throughout history, instances abound of landlords intentionally advertising solely on platforms that were unlikely to be accessed by minority groups. Both the Department of Housing & Urban Development (HUD) and the legal system construe discriminatory advertising to encompass media or locations chosen for advertising that effectively withholds housing information from specific segments of the market. Illustrative instances include scenarios such as exclusively displaying billboards in predominately white neighborhoods or featuring ads in publications predominately consumed by a white audience.
As a prudent approach, it is advisable to implement a policy wherein the use of AI for marketing and advertising is contingent upon adherence to a set of guidelines. If such a policy is not already in place, considering the prohibition of AI use for these purposes might be wise. In any case, an explicit and comprehensive written policy should be established, clearly outlining acceptable and prohibited applications of AI in marketing and advertising efforts.
HUD Issues New HOTMA Implementation Guidance
On September 29, 2023, HUD published Housing Notice 2023-10, Implementation Guidance: Sections 102 and 104 of the Housing Opportunity Through Modernization Act of 2016. The Notice contains implementation guidance for everything but the Section 104 asset limitation. HUD will provide additional guidance on the asset limitations at a later date. HUD does affirm that the asset limitations will apply to the Section 202/8 program. While HOTMA does go into effect on January 1, 2024, HUD recognizes that PHAs and owners will need time to put all the new policies into place. The Notice provides guidance on these delayed timeframes, including the requirement that MFH owners (owners of Project-Based Section 8 properties and other properties governed by the HUD Office of Multifamily Housing) update Tenant Selection Plans and EIV Policies & Procedures by March 31, 2024. HUD also published a List of Discretionary Policies to Implement HOTMA. This identifies areas in which owners have policy discretion; owners must state in the Tenant Selection Plan how they will exercise such discretion. Owners and managers of impacted properties should obtain a copy of the Notice and the list of discretionary policies. We will be updating the HOTMA training provided by A. J. Johnson Consulting Services to include this new guidance and will publish updates of the changes on our website.
HUD Delays NSPIRE Implementation for Certain Programs
The U.S. Department of Housing and Urban Development (HUD) has announced an extension of the compliance date for the National Standards for the Physical Inspection of Real Estate (NSPIRE) for select programs to October 1, 2024. This extension is applicable to the HOME Investment Partnerships Program (HOME), Housing Trust Fund (HTF), Housing Opportunities for Persons with AIDS (HOPWA), Emergency Solution Grants (ESG), and Continuum of Care (COC) programs. The purpose of this extension is to provide jurisdictions with additional time to implement these standards, which will govern inspections and evaluations of HUD-assisted housing. NSPIRE plays a crucial role in helping HUD streamline and consolidate its inspection standards and procedures. Additionally, it incorporates provisions of the Economic Growth and Recovery, Regulatory Relief, and Consumer Protection Act into all of HUD's programs. Programs other than those noted above that are subject to NSPIRE must still adopt the new standard by October 1, 2023.
A. J. Johnson Partners with Mid-Atlantic AHMA for October Affordable Housing Training
During the month of October 2023, A. J. Johnson will be partnering with the Mid-Atlantic Affordable Housing Management Association for a Low-Income Housing Tax Credit (LIHTC) training intended for real estate professionals, particularly those in the affordable multifamily housing field. The session will be presented via live webinar. The following session will be presented: October 18: Intermediate LIHTC Compliance - Designed for more experienced managers, supervisory personnel, investment asset managers, and compliance specialists, this program expands on the information covered in the Basics of Tax Credit Site Management. A more in-depth discussion of income verification issues is included as well as a discussion of minimum set-aside issues (including the Average Income Minimum Set-Aside), optional fees, and use of common areas. The Available Unit Rule is covered in great detail, as are the requirements for units occupied by students. Attendees will also learn the requirements relating to setting rents at a tax-credit property. This course contains some practice problems but is more discussion-oriented than the Basic course. A calculator is required for this course. This session is part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA that is designed to provide affordable housing professionals with the knowledge needed to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in this training session may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.
Medical Marijuana - Is It a Fair Housing Issue?
Medically prescribed marijuana use is permitted in 37 states and the District of Columbia, specifically for medical purposes. In addition, 18 states (Alaska, Arizona, California, Colorado, Connecticut, District of Columbia, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Vermont, Virginia, and Washington) have also legalized recreational marijuana. Property managers often inquire about whether individuals can be denied housing based on their marijuana use, considering the drug s legal status in the state where the property is located. The answer is both "yes and "no. Recreational marijuana users may be denied occupancy, but individuals with a physician s prescription for medical marijuana should not automatically face denial. While the Fair Housing Act (FHA) does not explicitly address drug use in housing, the legislative history used by HU, courts, and tribunals to interpret the law clearly indicates that the exclusion of current illegal drug users does not apply to individuals using controlled substances that are legally prescribed by a physician. According to an office House of Representatives report, "the exclusion does not eliminate protection for individuals who take drugs defined in the Controlled Substances Act for a medical condition under the care of or by prescription from, a physician. The report also asserts that "the use of a medically prescribed drug clearly does not constitute illegal use of a controlled substance. However, there are limitations to this protection for medical marijuana use: The marijuana must be legally prescribed by a physician for a specific medical condition authorized by state law. The person must use the marijuana solely for the prescribed condition. Usage should be confined to the person s own apartment and not common areas. The individual must not possess or cultivate more than the maximum amount permitted by law. Selling or distributing marijuana to others is not allowed. In contrast, recreational marijuana users do not enjoy the same legal protections as medical marijuana users, and they may face housing denial. However, this legal landscape can be complex. For this reason, managers should thoroughly explore state and local laws in places where recreational marijuana is legal. Property managers also need to consider one important factor when renting to individuals using medical marijuana. If the property is designated as non-smoking, permitting the smoking of medically prescribed marijuana on the premises would not constitute a "reasonable accommodation as it fundamentally alters the property s operations. Medically prescribed marijuana can be consumed in various forms, including food, pills, powder, topicals, and tinctures. Bottom Line: While medical (and even recreational) marijuana is permitted in many states, only users of medical marijuana are protected by the Fair Housing Act. And even users of medical marijuana must follow specific rules when using the marijuana at properties. Owners and managers of multifamily properties should develop written policies governing the use of medical marijuana at their properties, and those policies should be carefully reviewed by attorneys familiar with state and local laws relating to the issue of medical marijuana.