HUD’s Proposed Rule Targets Fair Housing Discrimination Lawsuits

August 20, 2019

The Department of Housing and Urban Development has proposed a rule that makes changes to how fair housing rules are interpreted, a move that critics argue could severely limit housing discrimination lawsuits going forward.

HUD has proposed a rule that would overhaul what’s known as the Disparate Impact rule, which has been used as a way to enforce the Fair Housing Act. The Disparate Impact rule stems from a 2013 regulation that created uniform standards for proving policies that are considered discriminatory, even if discrimination was not the policy’s intent. 

HUD’s proposal would shift the burden of proof in housing discrimination lawsuits away from the defendant and to the plaintiff. HUD Secretary Ben Carson says the rule changes are in line with recent federal court rulings.

“This proposed rule is intended to increase legal clarity and promote the production and availability of housing in all areas while making sure every person is treated fairly under the law,” Carson said in a statement. “As we have shown time and again, we will challenge any practice that discriminates against people that the law protects. At the end of the day, this rule not only increases Americans’ access to fair and affordable housing, but also permits businesses and local governments to make valid policy choices.”

However, some fair housing advocates argue that HUD’s proposed rule would make fair housing lawsuits nearly “impossible” to prove.

“These changes are designed to make it much more difficult, if not impossible, for communities of color to challenge discriminatory effects in housing,” Diane Yentel, president and CEO of the National Low Income Housing Coalition, told Curbed.com.

Under the current Disparate Impact rule, a three-step process is used for deciding cases: One, the person making the accusation of discrimination has to prove that a policy is causing discrimination; two, the defendant then must prove that the policy is necessary for legitimate, nondiscriminatory results; and three, the plaintiff must then prove the defendant’s interests can be achieved with a policy or practice that is less discriminatory.

But under the proposed rule, a five-step burden of proof would be used instead. As Curbed.com reports, the plaintiff will need to show that the policy is “arbitrary, artificial, and unnecessary”; has a “robust casual link” with disparate impact on a protected class; causes a “significant” adverse effect on them; and is directly linked to plaintiff’s “alleged injury.”

HUD’s proposed rule will undergo a 60-day comment period before being implemented.

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