HUD Issues Final Rule on Disparate Impact

HUD recently issued a final rule to formalize the national standard for determining whether a housing practice violates federal fair housing law as the result of discriminatory effect.

As the federal agency charged with enforcing the Fair Housing Act (FHA), HUD says 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.

“Through the issuance of this Rule, HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner,” HUD Secretary Shaun Donovan said in a statement. “This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination.”

The agency said that the rule provides clarity and consistency for individuals, businesses, and government entities subject to the federal fair housing law. HUD anticipates the rule also will make it easier for individuals and organizations covered by the law to understand their responsibilities and comply with the law.

“HUD is maintaining well-established legal precedent and formalizing a nationally consistent, uniform burden-shifting test for determining whether a given housing practice has an unjustified discriminatory effect,” said John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity.

The review process for the rule was expansive, transparent, and inclusive, according to HUD. Since January 2012, the agency said it has solicited, received, and incorporated input based on comments from individuals, fair housing and legal aid organizations, Attorneys General, state housing finance agencies, public housing agencies, public housing trade associations, insurance companies, financial institutions, and numerous other entities.

“The openness of this process allowed us to implement a rule that can be consistently and fairly applied,” noted Trasviña.

To view the final rule, Implementation of the Fair Housing Act’s Discriminatory Effects Standard, click here.

Source: HUD

Editor’s Note: Whether the Fair Housing Act applies to disparate impact claims is at the heart of a case currently pending before the U.S. Supreme Court. The law clearly bans intentional discrimination, but some dispute whether the FHA also bans policies, which are not intentionally discriminatory, but have a disparate impact—that is, an unfair negative effect—on racial minorities or other protected classes. The Court has not yet determined whether it will hear the case [Township of Mount Holly, New Jersey v. Mt. Holly Gardens Citizens in Action, Inc.].

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