NLIHC Joins National Fair Housing Alliance Letter Opposing Disparate Impact Rule Change

By Kayla Blackwell, NLIHC Housing Policy Analyst and Sarita Kelkar, NLIHC Policy Intern  

NLIHC joined a National Fair Housing Alliance (NFHA) letter urging Office of Management and Budget (OMB) Director Russel Vought and HUD Secretary Scott Turner to preserve the 2023 “disparate impact” rule. The letter responds to HUD’s recent disparate impact changes sent to OMB (see Memo, 8/11). The disparate impact standard of the 1968 “Fair Housing Act” prohibits practices that disparately impact members of protected classes, even without explicitly discriminatory intent, and it remains a key tool for combating harmful housing policies. While the text of the rule has yet to be publicly released, its existence amidst other actions of the Trump Administration signifies threats to fair and affordable housing.  

For decades, HUD and the courts have upheld the disparate impact standard, creating a long legal precedent critical to defending protected classes against housing discrimination. In 2013, HUD codified standards for evaluating when policies with discriminatory effects violate the act, including a three-step “burden-shifting” standard giving the party reporting a discriminatory effect a fair chance. As part of this first final rule, these standards were designed to protect individuals against housing discrimination with the ability to issue challenges if needed.  

However, in 2020, the Trump Administration attempted to place higher burden-of-proof on protected classes and reduce the types of recognized discriminatory effects by issuing a new disparate impact rule. While the 2023 Disparate Impact Rule under the Biden Administration restored standards set in the 2013 rule, the current Administration is attempting to dismantle fair housing law and the disparate impact standard. In April, the Administration released an executive order eliminating use of the standard (see Memo, 4/28)–and now alludes to returning to its 2020 rule.  

The letter reiterates how: 

• The disparate impact standard is a common-sense legal tool.
• HUD’s 2023 Disparate Impact Rule appropriately reflects decades of legal precedent. 
• Watering down HUD’s 2023 Disparate Impact Rule will undoubtedly violate the law. 
• The disparate impact standard ensures fair, thriving markets.  

The disparate impact standard is a needed tool to protect and empower marginalized groups against discriminatory housing policies like redlining and exclusionary zoning. Emphasizing commitment to the principle of identifying and acting against disparate impact, the letter argues for the continuation of HUD’s 2023 Disparate Impact Rule. 

Read NFHA’s press release here and access the letter here.  

Read more about the “disparate impact” rule on NLIHC’s Racial Equity and Fair Housing page here.