HUD Restores “Discriminatory Effects” Rule
Industry Update
March 17, 2023
Source: U.S. Department of Housing and Urban Development
The U.S. Department of Housing and Urban Development (HUD) announced that it has submitted to the Federal Register for publication a Final Rule entitled Restoring HUD’s Discriminatory Effects Standard. The Final Rule rescinds the Department’s 2020 rule governing Fair Housing Act disparate impact claims and restores the 2013 discriminatory effects rule. In the Final Rule, HUD emphasizes that the 2013 rule is more consistent with how the Fair Housing Act has been applied in the courts and in front of the agency for more than 50 years, and that it more effectively implements the Act’s broad remedial purpose of eliminating unnecessary discriminatory practices from the housing market.
“Discrimination in housing continues today and individuals, including people of color and people with disabilities, continue to be denied equal access to rental housing and homeownership,” said HUD Secretary Marcia L. Fudge. “Today’s rule brings us one step closer to ensuring fair housing is a reality for all in this country.”
The Fair Housing Act prohibits discrimination in housing and housing-related services because of race, color, religion, national origin, sex (including sexual orientation and gender identity), familial status, and disability. The discriminatory effects doctrine (which includes disparate impact and perpetuation of segregation) is a tool for addressing policies that unnecessarily cause systemic inequality in housing, regardless of whether they were adopted with discriminatory intent. 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. Accordingly, having a workable discriminatory effects standard is vital for the Biden-Harris Administration to accomplish its goal of creating a housing market that is free from both intentional discrimination and policies and practices that have unjustified discriminatory effects.
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