2015 Fair Housing Trends: What They Could Mean for Your Community

This month, the Coach takes a look at recent trends—and what they may mean for your fair housing program. The big news is a U.S. Supreme Court case on whether federal fair housing law imposes liability for discrimination based on disparate impact—that is, when a housing practice has a discriminatory effect on a protected class, even when there’s no intent to discriminate. A ruling in the case, expected later this year, has the potential to significantly change the legal landscape in fair housing law.

     Court watchers believe that same-sex marriage will be back before the Court before too long, given the flurry of recent rulings striking down same-sex marriage bans in many states. Until the Supreme Court weighs in, the trend toward legalization of same-sex marriage makes it all the more important to comply with applicable rules banning discrimination based on sexual orientation, gender identity, and marital status.

     We’ll also review the trend favoring legalization of medical marijuana and what it might mean for affected communities, particularly since federal law still considers marijuana an illegal drug. And the lesson covers a recent court ruling on the key fair housing question: whether communities must grant reasonable accommodation requests to allow medical marijuana use.

     Finally, we’ll revisit immigration reform, including recent executive actions by the president, and fair housing rules banning discrimination based on national origin, race, color, and religion—all of which may come up when dealing with recent immigrants.

     In this lesson, we’ve highlighted the trends—explaining what’s happening, what the law says, and what it might mean for your community—along with resources to learn more about each issue. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

‘DISPARATE IMPACT’ DISCRIMINATION

High Court Poised to Make Major Ruling on Fair Housing Law

For the first time in years, the U.S. Supreme Court is poised to make a major ruling on federal fair housing law. At issue is whether the federal Fair Housing Act (FHA) bans discrimination based on disparate impact—that is, a housing practice that has a discriminatory effect on members of a protected class, even if there’s no intentional discrimination.

     Twice before, the Court agreed to take up the issue, but both cases were resolved before it could issue a ruling. Court watchers don’t think that will happen this time, so a ruling in the case, Texas Department of Housing and Community Affairs (TDHCA) v. Inclusive Communities Project, is expected before the end of June.

     What Does the Law Say? Federal fair housing law prohibits housing discrimination “because of” race, color, religion, sex, national origin, familial status, or disability. The law clearly bans intentional discrimination—often referred to as “disparate treatment”—that is, intentionally denying housing or otherwise discriminating against anyone based on a protected characteristic.

     What’s currently in dispute is whether the law is broad enough to cover another type of fair housing claim—known as “disparate impact,” which doesn’t require proof of discriminatory intent. Discrimination claims based on disparate impact involve seemingly neutral policies that have an unfair discriminatory effect on members of protected groups. Generally, disparate impact claims rely on statistical evidence to show that a particular practice has a significantly adverse or disproportionate effect on members of a protected class.

     For decades, courts have recognized that the FHA covers both disparate treatment and disparate impact claims. In interpreting the FHA, courts often rely on federal laws banning employment discrimination. Since disparate impact claims are recognized under those laws, courts have found that they should be recognized under federal fair housing law.

     That’s been the outcome in rulings by most federal courts around the country, but there’s been a wave of recent litigation—culminating in the case currently before the Court—over whether the FHA indeed covers disparate impact claims. Among other things, opponents argue that the FHA, unlike laws banning employment discrimination, does not explicitly recognize disparate impact claims. Since it’s not in the law itself, they argue, Congress didn’t intend the FHA to cover disparate impact claims. 

     In 2013, HUD made its position official by issuing final regulations on disparate impact—which HUD refers to as “discriminatory effects”—under the FHA. As the federal agency charged with enforcing the FHA, HUD noted that it has long interpreted the law to prohibit housing practices with an unjustified discriminatory effect, if those acts actually or predictably result in a disparate impact on a group of persons, or create, increase, reinforce, or perpetuate segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin. According to HUD, the new rules formalize a national standard for determining whether a housing practice violates federal fair housing law as the result of discriminatory effect.

     Now, all eyes are on the Supreme Court, though a recent federal court ruling offers a preview of what may be coming. Late last year, the court in the District of Columbia parted ways with most other federal courts by ruling that the FHA does not cover disparate impact claims—striking down HUD’s new discriminatory effects regulations as invalid.

     What Does It Mean for You? The controversy isn’t likely to be resolved before the Court rules, as expected, sometime this spring. It’s difficult to predict what will happen, though nothing much should change if the Court finds that the FHA does cover discrimination based on disparate impact.

     But the opposite ruling—that the FHA does not permit disparate impact claims—would dramatically cut the scope of the law and have wide-reaching implications for government agencies and housing-related industries across the country. For one thing, it’ll probably mean the end of HUD’s discriminatory effects regulations and curb its enforcement efforts on fair housing claims without proof of discriminatory intent. It’ll also have major implications for state and local governments, particularly related to code enforcement and allocation of funding resources, which have triggered lawsuits alleging disparate impact discrimination.

     In the private sector, the most immediate effects may be felt by the lending and insurance industries, which have been actively opposing disparate impact claims by HUD in court. It may take some time to sort things out in the conventional multifamily industry, but a ruling against disparate impact liability may upset what many considered to be settled law on occupancy standards. Courts have long held that overly restrictive occupancy standards violate fair housing law based on their disparate impact on families with children.

     It could also dampen concerns about potential fair housing liability regarding policies on domestic violence, which have been challenged as having a disparate impact on women, and criminal background checks, which are said to have a disparate impact on racial and ethnic minorities. And, absent state law restrictions, the same goes for policies against accepting housing subsidies, including Section 8 housing vouchers, which fair housing advocates say have a disparate impact on low-income women and families, people of color, and individuals with disabilities.

     Learn More: While awaiting a ruling by the Court, you can learn more about disparate impact discrimination in our 2013 Special Issue, “What You Should Know About HUD’s New Discriminatory Effects Regulations,” available at FairHousingCoach.com.

SAME-SEX MARRIAGE—LGBT DISCRIMINATION

Big Changes in Marriage Equality Laws

All across the country, there’s been an abrupt change in the law on same-sex marriage. Last year at this time, same-sex marriage was permitted in only a minority of states, but it’s since shifted to the majority of states, including Florida, which is the 36th state to permit same-sex marriage as of January 2015.

     What’s Does the Law Say? Until recently, federal law—and the law in most states—banned same-sex marriage, but that started to change after the Supreme Court ruled on a pair of cases in mid-2013. Though both rulings favored advocates of same-sex marriage, the Court didn’t resolve the ultimate issue: whether state law bans on same-sex marriage were constitutional.

     But that was all it took for momentum to build, resulting in rulings by federal courts striking down same-sex marriage bans in many states. Those rulings signaled the go-ahead for marriage ceremonies between same-sex couples in many states, most recently in Florida in early 2015.

     Nevertheless, legal experts don’t think it’ll be long before the Court takes up the issue, particularly in the wake of a contrary ruling upholding same-sex marriage bans in Ohio, Michigan, Tennessee, and Kentucky. If the Court agrees to hear the issue this term, there could be a decision on the constitutionality of same-sex marriage bans by the end of June.

     What Does It Mean for You? Though the same-sex marriage debate has the potential to affect your fair housing efforts, it doesn’t alter your obligation to comply with current federal, state, and local rules banning discrimination against LGBT individuals.

     Federal fair housing law bans discrimination based on sex—but not sexual orientation or gender identity—though those have certainly been on HUD’s radar. In 2012, HUD issued rules to forbid discrimination against LGBT (lesbian, gay, bisexual, or transgender) individuals in public and federally assisted housing.

     In addition, HUD announced a policy to review complaints of sexual orientation or gender identity discrimination to determine whether they can be prosecuted under current federal law. For example, HUD says that it could pursue a fair housing claim for sex discrimination on behalf of a female applicant who alleges discrimination by a landlord because she wears masculine clothes and engages in physical expressions that are stereotypically male. The Justice Department just announced a similar policy in employment discrimination claims, stating that the ban on sex discrimination extends to claims based on an individual’s gender identity, including transgender status.

     Meanwhile, HUD has been studying the issue, releasing the results of the nation’s first-ever national study examining housing discrimination against same-sex couples in the private rental market. The 2013 study, based on 7,000 email tests, found that same-sex couples experienced discrimination in the online rental housing market, relative to heterosexual couples. HUD described the study as an initial step, with plans for in-person testing and studies for discrimination against transgender individuals.

     Aside from federal requirements, many communities are subject to state or local fair housing laws protecting LGBT individuals. At last count, 21 states and the District of Columbia ban housing discrimination based on sexual orientation. All but three also ban discrimination based on gender identity, gender expression, or transgender status. In addition, hundreds of county, city, and municipal governments have expanded fair housing protections to ban discrimination based on sexual orientation or gender identity.

     Even in states that don’t cover sexual orientation, the growing recognition of same-sex marriage could lead to potential liability under state fair housing laws—not based on sexual orientation, but on marital status. Though less than a quarter of states protect sexual orientation, nearly half ban discrimination based on marital status.

     The laws vary in the specifics, but they generally ban discrimination against applicants or residents because of their marital status—that is, because they’re single, married, divorced, or widowed. Examples include showing a preference for married people, refusing to rent to applicants who are divorced or separated, or requiring single applicants pay higher rent payments than married applicants.

     Most have been on the books for a long time, well before legalized same-sex marriage seemed possible. But in states where it’s legal, communities could face a discrimination claim based on marital status if they treat same-sex married couples differently than those in traditional marriages.

     Nevertheless, such claims could be challenged by landlords who raise religious objections to renting to same-sex couples, even if they’re legally married. There have been mixed results in cases against landlords with religious objections to renting to unmarried heterosexual couples who wanted to live together. In some states, courts have ruled that state laws banning discrimination based on marital status prevent landlords from turning them away. But in others, courts have ruled that the ban on discrimination based on marital status does not require owners to rent to unmarried opposite-sex couples when doing so violates their religious beliefs.

     Learn More: For more information about same-sex marriage in light of state and local laws banning discrimination based on marital status, sexual orientation, and gender identity, see the January 2014 lesson, “What You Should Know about State & Local Fair Housing Laws,” available at FairHousingCoach.com.

MEDICAL MARIJUANA—REASONABLE ACCOMMODATION RULES

More States Relax Marijuana Restrictions

Though marijuana is still illegal under federal law, momentum has been building to legalize marijuana—at least for medical use. At last count, 23 states and the District of Columbia have approved medical marijuana laws—with maybe more on the way. Each year, proposals to allow use of medical marijuana are introduced in states across the country, and there’s no reason to believe that will change anytime soon. Meanwhile, five states have gone further: Last fall, Oregon, Alaska, and the District of Columbia joined Colorado and Washington to legalize possession of small amounts of marijuana for recreational use.

     These state laws are at odds with longstanding federal law, which still classifies marijuana as an illegal drug with no accepted medical use. Under the federal Controlled Substances Act, it’s illegal to manufacture, distribute, or possess marijuana, which may not be legally prescribed by a physician for any reason.

     Federal officials insist that state marijuana laws don’t change the fact that using marijuana continues to be an offense under federal law, though they have pulled back on enforcement against seriously ill individuals using medical marijuana in states where it’s legal.

     What Does the Law Say? Fair housing law bans discrimination based on disability, including refusal to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability an equal opportunity to use and enjoy his home. Nevertheless, there are limits: You don’t have to grant an accommodation request if it’s unreasonable—that is, if it would impose an undue financial and administrative burden on the community or fundamentally alter the nature of your operations.

     Most communities ban illegal activities on the premises, including the use of illegal drugs. But if your state has legalized medical marijuana, you may be wondering whether fair housing law requires you to allow its use on your property as a reasonable accommodation.

     Not according to HUD, which has stated that requests to permit use of medical marijuana are not reasonable under the FHA, at least in federal public and assisted housing. In a 2011 memo, HUD stated that federal and state nondiscrimination laws do not require public housing agencies and federally assisted housing providers to accommodate requests by current or prospective residents with disabilities to use medical marijuana. Though it wouldn’t pursue fair housing claims against those providers for refusing such requests, HUD said the law gave those providers the discretion to decide whether to evict current residents for using medical marijuana.

     In December 2014, a court came to the same conclusion, ruling that a federally assisted housing community in Michigan was not required to allow use of medical marijuana as a reasonable accommodation under fair housing law.

     The case involved the resident of a townhome in a project-based, Section 8, federally assisted housing community. The resident, who had multiple sclerosis, had a prescription for medical marijuana and obtained a state-issued medical marijuana card. Under the lease, the management company “may” terminate the agreement for several reasons, including drug-related activity or criminal activity.

     The management company initiated eviction proceedings, but when the resident argued that she was entitled to a reasonable accommodation to use medical marijuana at the community, the company asked the federal court to rule on her accommodation claim under federal fair housing law.

     Siding with the management company, the court ruled that the resident was not entitled to a reasonable accommodation for medical marijuana use under federal fair housing law. Although state law permitted use of medical marijuana, it was trumped by federal law, which classifies marijuana as an illegal drug with no medically acceptable uses. 

     Fair housing law doesn’t require federally assisted communities to grant reasonable accommodations of medical marijuana use, because doing so would fundamentally alter the nature of their housing programs. Requiring the community to grant the reasonable accommodation to use marijuana would require the community to violate federal law. Such a requirement would fundamentally alter the nature of its operations by thwarting its mission to provide drug-free federally assisted housing.

     Moreover, the court ruled that the resident wasn’t entitled to a reasonable accommodation under Section 504 of the Rehabilitation Act. The law bans discrimination against individuals with disabilities, but not when it’s based on current use of illegal drugs.

     Nevertheless, the court declined to rule that the resident’s use of medical marijuana was cause to evict her—or that she must stop using marijuana at the property, saying it was up to the state courts to decide [Forest City Residential Management Inc. v. Beasley, 2014].

     What Does It Mean for You? For now, questions about how to handle medical marijuana at your community depend on various factors, including the law in your state and the nature of your funding.

     It shouldn’t be a problem if you’re located in the majority of states, where marijuana remains an illegal drug under both federal and state law. Federal fair housing law doesn’t require you to accommodate the use of illegal drugs—for whatever purpose. But stay on top of developments in your state, since advocates are pressing proposals to legalize medical marijuana in states across the country.

     In states that allow medical marijuana use, HUD has declared that public housing agencies and owners of federally assisted housing don’t have to grant reasonable accommodation requests to permit use of medical marijuana. But check out the details—for example, the memo states that those providers have discretion whether to evict current residents using medical marijuana.

     For conventional communities, it’s more complicated. Technically, HUD’s 2011 memo and the court ruling on medical marijuana apply only to public and federally assisted housing communities, but many believe it unlikely for HUD to pursue a federal fair housing claim for refusal to permit the use of medical marijuana at conventional housing communities. Still, it’s a good idea to monitor what’s happening in your state, particularly involving reasonable accommodations requests for medical marijuana.

     Learn More: For more on medical marijuana laws and how they may affect your community’s fair housing obligations, see the November 2013 lesson, “Addressing Medical Marijuana Use at Your Community, at FairHousingCoach.com.

IMMIGRATION REFORM—NATIONAL ORIGIN PROTECTIONS

Immigration Still a Hot-Button Issue

In November 2014, President Obama announced executive actions on immigration reform—measures that “crack down on illegal immigration at the border, prioritize deporting felons not families, and require certain undocumented immigrants to pass a criminal background check and pay their fair share of taxes as they register to temporarily stay in the U.S. without fear of deportation,” according to the White House. The executive actions were described as “common sense steps,” pending congressional action on comprehensive immigration reform.

     What drew headlines, however, was that the plan would allow more unauthorized immigrants to stay in the country by expanding a program that defers action for immigrants who came here as children and creating a new program for parents of U.S. citizens or lawful permanent residents who have lived here for at least five years, if they register, pass a background check, and pay taxes. These executive actions could, among other things, allow as many as 4 million unauthorized immigrants to avoid deportation, according to researchers at the Pew Charitable Trusts.

     What Does the Law Say? Fair housing law bans discrimination based on national origin—as well as race, color, and religion—any of which may apply to immigrants, depending on their country of origin, and their ethnic, racial, and religious background.

     National origin discrimination means treating people differently because of their ancestry, ethnicity, birthplace, culture, or language, according to HUD. The law prohibits communities from denying housing opportunities to people because they or their family are from another country, because they have a name or accent associated with a national origin group, or because they are married to or associate with people of a certain national origin. National origin discrimination often involves immigrants or non-English-speaking individuals, but it can also involve native-born U. S. citizens based on their family ancestry, HUD says.

     HUD offers some examples of discriminatory conduct based on national origin:

• Refusing to rent to people whose primary language is other than English;
• Offering different rent rates based on ethnicity;
• Steering prospective renters to or away from certain areas because of their ancestry; and
• Failing to provide the same level of service or housing amenities because a resident was born in another country. 

     It’s common for discrimination complaints based on national origin to overlap with other claims, particularly race and religion. For example, HUD notes, courts often treat claims of discrimination against Latinos based on both national origin and race. The same goes for those who were born in—or whose ancestors came from—countries in Asia, Africa, or the Middle East, who may also be entitled to protection based on religion.

     What Does It Mean for You? Comprehensive immigration reform remains on the legislative agenda, but no one is sure when—or if—there’ll be any substantive legislation to come out of Washington. But whatever happens, fair housing law requires consistent treatment of all prospects, applicants, and residents, regardless of where they—or their ancestors—come from.

     HUD cautions that immigration status does not affect whether an individual is entitled to protection under federal fair housing law. The agency warns that it’s illegal to refuse to rent to anyone because of his or her religion—or to charge a different price or ask for additional documentation because of his or her national origin—regardless of immigration status. Moreover, HUD says it doesn’t inquire into immigration status when it investigates fair housing complaints, and points out that it’s unlawful to threaten to report anyone to immigration authorities because they have filed a housing discrimination complaint.

     It’s a good idea to get legal advice about whether—and how—to implement policies on screening for immigration status. Some federally assisted housing programs are required to inquire into applicants’ immigration status, but state or local law may limit the practice by conventional housing communities. In California, for example, the law prohibits inquiry into an applicant’s immigration status. And in New York City, where the law bans discrimination based on “alienage or citizenship status,” communities may not ask for an applicant’s country of citizenship or whether he's a U.S. citizen.

     Moreover, HUD warns that procedures to screen potential and existing residents for citizenship and immigration status may violate the FHA’s protections based on national origin. If you ask for information from one person or group, then you must ask for the same information from all applicants and residents, HUD says.

     Learn More: For more on complying with the FHA’s national origin provisions, see the June 2013 lesson, “Complying with Fair Housing Law in a Post-9/11 World,” available at FairHousingCoach.com.

• Fair Housing Act: 42 USC §3601 et seq.