Advocacy Organizations File Lawsuits Over HUD Revisions to the Disparate Impact Rule

Advocacy organizations from across the country have filed lawsuits challenging HUD’s revisions to the final Disparate Impact rule that shifted the burden of proof from housing providers, financial institutions, and insurance companies to the victims of discrimination. These lawsuits are the latest efforts by advocates to oppose the administration’s rollback of protections under the Fair Housing Act and the 2013 Disparate Impact Rule. HUD’s final rule would tip the scale in favor of those accused of discrimination, making it virtually impossible for victims to prove they were discriminated against.

The National Fair Housing Alliance (NFHA), the NAACP Legal Defense and Educational Fund, Inc. (LDF), Fair Housing Advocates of Northern California, and BLDS, LLC filed their lawsuit against HUD with the U.S. District Court for the Northern District of California. The motives for this lawsuit are outlined in a press release that states, in part: 

The lawsuit filed by NFHA, LDF, Fair Housing Advocates of Northern California, and BLDS, LLC asserts the Trump administration acted improperly in implementing the final “disparate impact rule.” It alleges that HUD violated the Administrative Procedures Act by taking final agency action that is arbitrary and capricious, is in excess of statutory authority, and is not in accordance with law. Among other allegations, the complaint alleges that the final rule is not a product of reasoned decision-making and will undermine the purposes of the Fair Housing Act. The complaint also alleges that HUD failed to respond adequately to the public comments submitted in response to the proposed rule.

Open Communities Alliance (OCA) and SouthCoast Fair Housing of Massachusetts and Rhode Island have also filed a lawsuit with the United States District Court for the District of Connecticut. Their statement details the harmful effects that the final rule would have:

If HUD succeeds in eliminating the current protections of the Fair Housing Act, a number of discriminatory practices could go unchecked, including: exclusionary zoning, landlords could evict survivors of domestic violence under policies punishing tenants for criminal activity in their homes or for calling the police; landlords could deny housing to anyone with any type of prior criminal record; public housing authorities could be prevented from giving housing vouchers to low-income people seeking to live in other neighborhoods, perpetuating racial segregation; and landlords could choose to rent out apartments by the room or impose overly restrictive occupancy limits, effectively shutting out families with children.

The disparate impact concept allows individuals to show that a housing policy or program has a discriminatory impact on them because of their race, national origin, sex, disability, family status (have children), or religion – even if the policy or program appears to apply to everyone equally on its face. For more than 50 years, HUD has interpreted the Fair Housing Act to prohibit housing policies or practices that have a discriminatory effect, even if there was no apparent attempt to discriminate. HUD’s final rule drastically changes the three-step burden-shifting standard established in 2013, replacing it with a set of tests that places the burden entirely on the victims of discrimination. 

HUD’s newly imposed standard would also provide cover for those accused of discrimination to deny their role. This is particularly true in instances when individuals or entities utilize software, technology, or models to justify denying access to housing. HUD’s job is to protect families, not provide additional opportunity for providers to exclude them and justify such exclusion for profit.

NLIHC issued a detailed analysis prior to the rule being published in the Federal Register (see Memo, 09/08). The final rule goes into effect today, October 26.

The lawsuits are the latest of rejections by advocates of HUD’s discriminatory rulemaking and their continuous push for non-emergency rulemaking by advocates (see Memo, 04/20). NLIHC will continue to inform Members and Partners of the status of these lawsuits and responses from the administration.

Read the full statement and complaint filed by NFHA, LDF, Fair Housing Advocates of Northern California, and BLDS, LLC.

Read the full statement and complaint filed by OCA and SouthCoast Fair Housing of Massachusetts and Rhode Island.

Read an advanced version of HUD’s final Disparate Impact Rule at:

The Federal Register version of HUD’s final Disparate Impact Rule is at:

NLIHC’s analysis of the final Disparate Impact Rule is at:

More about disparate impact is on page 7-8 of NLIHC’s 2020 Advocates’ Guide