HUD to Publish New AFFH and Disparate Impact Rules

HUD submitted on April 13 to the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) a proposed rule reinstating the 2013 Disparate Impact Rule and an interim final rule restoring statutory definition to the AFFH rule. This is the first step in the process of returning these two rules barring discrimination in housing before they were gutted by the previous administration. HUD has assured stakeholders and advocates that more fair housing regulations and news are forthcoming in its upcoming regulatory agenda.

The previous administration in the summer of 2020 abruptly issued its final rule, “Preserving Community and Housing Choice,” repealing the 2015 AFFH Rule (see Memo, 07/27/2020). This came after then-Secretary Ben Carson suspended the rule in 2018, halting the first significant regulation on the provision since the Fair Housing Act of 1968 which required federal agencies, particularly HUD, as well as states, counties, and cities to affirmatively further fair housing if they receive HUD funds (see Memo 05/21/2018). The interim final rule will restore the statutory definition to the AFFH rule but will not reinstate the 2015 rule. More details are expected to be released once it is reviewed at OMB and published in the Federal Register.

The previous administration had also published in the fall of 2020 its final Disparate Impact Rule that would have shifted the burden of proof of discrimination from housing providers, financial institutions, and insurance companies to the victims of discrimination (see Memo, 09/14/2020). The previous administration’s drastic changes to the 2013 rule would have discarded the well-crafted and time-tested three-part shifting standard, replacing it with a set of tests intended to hurt the Fair Housing Act’s protected classes. This rule was set to go into effect on October 25, 2020, but was halted due to a preliminary nationwide injunction issued by the U.S. District Court for the District of Massachusetts (see Memo, 11/02/2020). The newly proposed rule will reinstate the 2013 Disparate Impact Rule, which is the current regulation that is being followed due to the stay by the U.S. District Court of the previous administration's harmful rule.

These new actions by HUD were taken in accordance with a memorandum from President Biden to the secretary of HUD instructing the agency to redress the nation’s long history of discriminatory housing practices and policies and reaffirming the administration’s commitment to end housing discrimination. This memo ordered the HUD secretary to examine the effects of the previous administration’s actions against the AFFH Rule and Disparate Impact Rule and the effect that it has had on HUD’s statutory duty ensure compliance with the Fair Housing Act and to affirmatively further fair housing. The memo also orders the HUD Secretary to take the necessary steps to implement the Fair Housing Act’s AFFH requirement sand to prevent practices that have a disparate impact (see Memo, 02/01). 

The review of both rules can take up to 90 days from the date of submission at OMB. Once the review is complete, the AFFH Rule will be published to the Federal Register and become the regulation to follow for HUD and states, counties, and cities that receive HUD funding. The Disparate Impact Rule will have to go through the entire federal rulemaking process in accordance with the Administrative Procedures Act (APA). This means HUD will be required to publish a Notice of Proposed Rulemaking (NPRM), a congressional review by the House Financial Services Committee and Senate Banking, Housing, and Urban Affairs Committee, a public comment period that typically lasts 60 days, and a review and response of all comments by HUD before the final rule can be posted.

HUD staff has assured NLIHC and other fair housing advocacy organizations and stakeholders that more information on these rules and more fair housing regulations will be released soon. NLIHC will continue to inform members and partners of any updates.

The new AFFH Rule and Disparate Impact Rule will have more information posted to OIRA once reviewed and published. 

More information about AFFH is on pages 7-147-217-27, and 7-35 of NLIHC’s 2020 Advocates’ Guide.

More information on disparate impact is on pages 7-8 of NLIHC’s 2020 Advocates’ Guide.