HUD Issues Fair Housing “Disparate Impact” Rule

On February 8, 2013, HUD announced that it was publishing a new rule implementing the Fair Housing Act’s discriminatory effects (“disparate impact”) standard. While in most cases an individual bringing a complaint under the Fair Housing Act must show that the opposing party acted with an intent to discriminate, under the disparate impact theory, an individual instead may show that a challenged act or rule has a discriminatory effect based on a prohibited ground. The rule, published in the Federal Register on February 15, will take effect on March 18, 2013.

In a press release announcing the new rule, HUD stated that it was

statutorily charged with the authority and responsibility for interpreting and enforcing the Fair Housing Act and has long interpreted the Act 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.

In addition, the agency noted that all 11 federal courts of appeals that have considered the issue have found that individuals may prove a case by proving a disparate impact in certain instances.

Issuing a disparate impact rule had been on HUD’s regulatory agenda for many years. The proposed rule had been published on November 16, 2011, and received 96 public comments by a wide variety of groups, including fair housing and legal aid organizations, state and local fair housing agencies, state Attorneys General, state housing finance agencies, public housing agencies, insurance companies, mortgage lenders, real estate agents, law firms, and others.

Click here to view the new rule.

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