Proposed Anti-Fair Housing Disparate Impact Rule Published in the Federal Register

HUD formally published in the Federal Registeron August 19, proposed 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 of 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. Comments are due by October 18. NLIHC will offer a sample comment letter for advocates to tailor for submitting comments.

In a statement, Diane Yentel, NLIHC President and CEO said, “HUD’s disparate impact proposed rule is the latest in a series of Trump administration efforts to gut civil rights and fair housing protections. With HUD’s Disparate Impact rule, Secretary Carson is attempting to create a new and much higher bar for proving discriminatory outcomes. The Trump administration designed these changes to make it much more difficult, if not impossible, for communities of color to challenge discriminatory effects in housing.” 


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 proposing to drastically over hall.

The three-step burden shifting standard in the current rule is very simple:

  1. 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.
  2. 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.
  3. 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 theory 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 Memo6/25/18). 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. 

The Federal Register version of the proposed rule is at:

An easier to read version of the proposed rule (the same as the version leaked and reported in Memo on August 5) is at:

NLIHC’s Preliminary Summary of Key Features is at:

NLIHC’s Side-by-Side of §100.500 is at:

A media statement by Diane Yentel, NLIHC president and CEO is at:

More about disparate impact is on page 7-8 of NLIHC’s 2019 Advocates’ Guide