Court Rules Disparate-Impact Source-of-Income Discrimination Suit Can Proceed

Source-of-income discrimination and disparate impact were the subjects of a law suit filed by the National Fair Housing Alliance (NFHA) against the Travelers Insurance Company. NFHA claims the firm violates the Fair Housing Act by discriminating on the basis of race and sex through its policy of denying insurance to apartment owners who rent to households with Housing Choice Vouchers (HCVs). NFHA also asserts Travelers violates the District of Columbia’s Human Rights Act because the firm’s policy discriminates against African Americans and women based on source of income (HCVs), because 92% of HCV households in the District are African American and 81% are female-headed households. The U.S. District Court for the District of Columbia ruled that NFHA has standing to bring the discrimination suit and the Court rejected Travelers’ motion to dismiss the suit, holding that NFHA had succeeded in providing a viable disparate impact claim under the Supreme Court’s Inclusive Communities Project decision (see Memo, 6/29/15).

The District Court noted that NFHA’s claims meet the “robust causality” requirement articulated in Inclusive Communities because NFHA sufficiently alleged that Travelers’ policy disproportionately harms the groups most likely to rely on HCVs, African Americans and women, by limiting their housing choices. The Court also held that NFHA adequately alleged that Travelers’ policy violated the D.C. Human Rights Act’s prohibitions on housing discrimination based on source of income.

Source-of-income discrimination generally refers to landlords who refuse to rent to a household based on the type (the source) of income they have to pay the rent, such as a HCV, Social Security, Supplemental Security Income (SSI) received by people with disabilities, veterans’ benefits, alimony or child-support payments from a missing spouse, and Temporary Assistance for Needy Families (TANF).

For more than 45 years, federal circuit courts had recognized two categories of discrimination prohibited under the Fair Housing Act of 1968: acts that are clearly intentional and acts such as policies and practices that might seem neutral but that have a discriminatory effect. Under the disparate impact standard, courts assess discriminatory effect and whether an action perpetuates segregation, whether the discrimination is justified, and whether less discriminatory alternatives exist for the challenged practice.

NFHA’s summary of and link to the decision are at:

More about disparate impact is on page 7-1 of NLIHC’s 2017 Advocates’ Guide at: