On June 20, 2018, the U.S. Department of Housing and Urban Development (HUD) published a notice asking for public comments regarding HUD’s “disparate impact” regulation. Comments to HUD in response to the notice are due by August 20, 2018.
The Fair Housing Act prohibits discrimination based on race, color, religion, national origin, sex, familial status, and disability. HUD issued its “disparate impact” regulation in February 2013, setting forth requirements for proving a violation of the Fair Housing Act based on its discriminatory effect, even if the actions were not motivated by discriminatory intent. Under a disparate impact analysis, a rule or law that is neutral on its face may violate the Fair Housing Act if it has a discriminatory effect on a protected group and there is not another, less discriminatory method to achieve the intended result.
In the 2015 case of Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., the U.S. Supreme Court upheld disparate impact theory for proving violations of the Fair Housing Act, affirming that the law encompassed claims brought based on either discriminatory intent or discriminatory effect.
HUD’s 2018 notice, titled “Reconsideration of HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard,” states that it is “particularly interested” in responses to the following questions:
1. Does the Disparate Impact Rule’s burden of proof standard for each of the three steps of its burden-shifting framework clearly assign burdens of production and burdens of persuasion, and are such burdens appropriately assigned?2. Are the second and third steps of the Disparate Impact Rule’s burden-shifting framework sufficient to ensure that only challenged practices that are artificial, arbitrary, and unnecessary barriers result in disparate impact liability?3. Does the Disparate Impacts Rule’s definition of ‘‘discriminatory effect’’ in 24 CFR 100.500(a) in conjunction with the burden of proof for stating a prima facie case in 24 CFR 100.500(c) strike the proper balance in encouraging legal action for legitimate disparate impact cases while avoiding unmeritorious claims?4. Should the Disparate Impact Rule be amended to clarify the causality standard for stating a prima facie case under Inclusive Communities and other Supreme Court rulings?5. Should the Disparate Impact Rule provide defenses or safe harbors to claims of disparate impact liability (such as, for example, when another federal statute substantially limits a defendant’s discretion or another federal statute requires adherence to state statutes)?6. Are there revisions to the Disparate Impact Rule that could add to the clarity, reduce uncertainty, decrease regulatory burden, or otherwise assist the regulated entities and other members of the public in determining what is lawful?