HUD is proposing drastic changes to the fair housing Disparate Impact rule that would make it far more difficult for people experiencing various forms of discrimination to challenge the practices of businesses, governments, and other large entities. As proposed, the current three-part “burden-shifting” standard to show disparate impact would be radically changed to a five-component set of tests placing virtually all the burden on people who are in “protected classes” as defined by the Fair Housing Act – people of color, women, immigrants, families with children, people with disabilities, LGBTQ persons, and people of faith. NLIHC opposes these proposed changes and will work with our fair housing and civil rights partners to defend civil rights.
The proposed changes to the rule were cleared by the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) on July 19 (see Memo, 7/29). Copies were sent to the authorizing congressional committees on Monday, July 29 for a 15-day review period. The proposed rule has not yet been published in theFederal Register.
In a statement on the proposed rule, NLIHC President and CEO Diane Yentel said, “These changes are designed to make it much more difficult, if not impossible, for communities of color to challenge discriminatory effects in housing. With this harmful proposal, the Trump administration continues its pattern of attempts to weaken and disrupt the federal government’s responsibility to uphold its fair housing obligations under the law.”
For more than 40 years, HUD and the courts have interpreted the Fair Housing Act to prohibit housing policies or practices that have a discriminatory effect even if there was no apparent intent to discriminate. There are 13 U.S. Courts of Appeals, 11 of which have heard disparate impact cases, and all have upheld disparate impact and applied a burden-shifting standard. Because there were minor variations in how the courts and HUD applied the concept of discriminatory effects over the years, a proposed rule in 2011 offered a standard for comment, culminating in a final Disparate Impact rule on February 15, 2013. That final regulation established uniform standards for determining when a housing policy or practice with a discriminatory effect violates the Fair Housing Act. It is the February 15, 2013 final rule that HUD is now proposing to drastically overhaul.
The three-step burden-shifting standard in the current rule is very simple:
- The plaintiff (the party alleging disparate impact) has the burden of proving that a policy or practice caused or predictably will cause a discriminatory effect.
- If the plaintiff satisfies that burden of proof, the burden shifts to the defendant (the business, government, or other entity) to prove that the challenged policy or practice is necessary to achieve one or more of the defendant’s substantial, legitimate, nondiscriminatory interests.
- If the defendant satisfies the above burden of proof, then the burden shifts again to the plaintiff to prove that the defendant’s substantial, legitimate, nondiscriminatory interests could be served by another policy or practice that has a less discriminatory effect.
The U.S. Supreme Court upheld the use of disparate impact as a legal tool to establish liability under the Fair Housing Act on June 25, 2015 in Texas Department of Housing and Community Affairs v. Inclusive Communities (ICP). The current HUD administration issued an advance notice of proposed rulemaking (ANPR) in the Federal Registeron June 20, 2018 (see Memo, 6/25/18). HUD acknowledged then that the Supreme Court upheld the use of disparate impact theory, but HUD asserts that the Court “did not directly rule upon it [the 2013 disparate impact rule].” Advocates and attorneys agree, however, that the Court implicitly endorsed the rule by not questioning it or challenging it.
Key Features of the Proposed Changes
NLIHC has prepared a preliminary summary of key features of the proposed rule. NLIHC has also prepared a side-by-side comparison of a key section (§100.500) of the current rule and HUD’s proposed changes to it.
NLIHC is joining with our fair housing and civil rights partners to Defend Civil Rights and defeat the proposed disparate-impact rule changes that would allow covert discriminatory practices. The Defend Civil Rights campaign is led by the National Fair Housing Alliance, Leadership Conference on Civil and Human Rights, NAACP Legal Defense & Educational Fund, Lawyers’ Committee for Civil Rights Under Law, Poverty and Race Research Action Council, ACLU, and Center for Responsible Lending “united by our belief in equality and fairness, our desire to educate the public on important civil rights protections, and our commitment to #DefendCivilRights from those looking to weaken them.”
The proposed rule is at: https://bit.ly/2yxRy2F
NLIHC’s Preliminary Summary of Key Features is at: https://bit.ly/2MALi2r
NLIHC’s Side-by-Side of §100.500 is at: https://bit.ly/2yzdevq
Learn more about the Defend Civil Rights campaign at: https://www.defendcivilrights.org/
A media statement by Diane Yentel, NLIHC president and CEO, is at: https://bit.ly/2OBUw18
More about disparate impact is on page 7-8 of NLIHC’s 2019 Advocates’ Guide.