The U.S. Department of Housing and Urban Development (HUD) Friday published a proposal to the Federal Register that would rescind the department’s 2020 disparate impact rule and restore the 2013 discriminatory effects rule.
HUD said in its notice of proposed rulemaking Friday that it believes 2013's Discriminatory Effects Standard, "is more consistent with decades of case law and better effectuates the Act’s broad remedial purpose of eradicating unnecessary discriminatory practices from the housing market."
In other words, the 2020 update to the Fair Housing Act made it harder for plaintiffs to meet the legal threshold for proving unintentional discrimination, and HUD is seeking to restore the preceding rule.
Secretary Marcia L. Fudge expounded on the proposal, saying, "We must acknowledge that discrimination in housing continues today and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership.
"It is a new day at HUD," she continued, "and our Department is working to lift barriers to housing and promote diverse, inclusive communities across the country. Today’s publication of the proposed discriminatory effects rule is the latest step HUD is taking to fulfill its duty to ensure more fair and equitable housing."
The Fair Housing Act prohibits discrimination in housing and housing-related services because of race, color, religion, national origin, sex, familial status, and disability. The discriminatory effects doctrine is a tool for addressing policies that cause systemic inequality in housing, HUD reported in a press release.
"It has long been used to challenge policies that unnecessarily exclude people from housing opportunities, including zoning requirements, lending and property insurance policies, and criminal records policies," the news release continued. "Accordingly, having a workable discriminatory effects standard is vital for the accomplishment of the Biden-Harris Administration’s policy goal of a housing market that is free from both intentional discrimination and policies and practices that have unjustified discriminatory effects."
Under the 2013 rule, according to HUD, the discriminatory effects framework was straightforward: "A policy that had a discriminatory effect on a protected class was unlawful if it did not serve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative could also serve that interest. The 2020 rule complicated that analysis by adding new pleading requirements, new proof requirements, and new defenses, all of which made it harder to establish that a policy violates the Fair Housing Act. HUD now proposes to return to the 2013 rule’s straightforward analysis."
HUD's announcement follows a January White House directive to HUD to examine the effects of the 2020 Disparate Impact Standard.
President Joe Biden asked HUD to reassess several Trump-era edicts like the disparate impact rule.
At the time, the acting HUD Secretary Matthew E. Ammon said Biden's order represents an important step toward "redressing the federal government’s legacy of housing discrimination and securing equal access to housing opportunity for all."
The public has 60 days to file comments on the proposed rule amendment. HUD will review the comments, develop responses, and publish a final rule. In the meantime, HUD reports, its "Office of Fair Housing and Equal Opportunity (FHEO) continues to vigorously enforce the Fair Housing Act, including addressing policies and practices by housing providers, lenders, insurers, appraisers, and others that cause unjustified systemic inequities based on race or other protected class."