PROPOSED HUD RULE WOULD HOBBLE FAIR HOUSING ENFORCEMENT
FHJC JOINS NATIONWIDE CALL FOR ACTION
On Monday August 19th, the Department of Housing and Urban Development (HUD) announced a proposed rule that would make it nearly impossible to use a well-established legal theory to prosecute housing discrimination cases.
“Disparate impact” is a legal tool used to challenge facially neutral policies that have a discriminatory impact and yield biased outcomes. The value of the disparate impact theory in fair housing enforcement stems from an understanding that hidden, stubborn prejudice can result in needless, facially neutral policies that discriminate against protected classes in practice. Changing the disparate impact rule will allow financial institutions, insurance companies, and housing providers to design and implement discriminatory policies that will widen societal inequalities.
For the Fair Housing Justice Center (FHJC), the new rule is not an abstract threat. The rule, as proposed, would radically undermine fair housing enforcement efforts in the New York City region. Over the past 15 years, many FHJC investigations have led to litigation that relied on the disparate impact theory to challenge exclusionary zoning and land-use practices (e.g., MHANY Management et al. v. Village of Garden City et al.); eliminate discriminatory residency preferences that perpetuate residential segregation (e.g., FHJC v. Town of Yorktown et al., FHJC et al. v. Village of Great Neck Plaza, FHJC et al. v. Town of Bedford et al. et al.); remove racially discriminatory policies of homeowner associations and co-ops (e.g., FHJC et al. v. Edgewater Park Homeowners Corp. et al.); and end discriminatory housing policies that exclude people with disabilities (e.g., Cales et al. v. New Castle Hill Realty et al., Chacon et al. v. The LeFrak Organization et al., R.H. v. Equity Renaissance Holdings LLC., Cruz v. Grenadier Realty Corp.).
FHJC President Robert Martin stated, “This is a moment when all of us who believe in fair housing need to raise our collective voices in opposition to this rule. The proposed rule must be defeated because it represents a direct attack on established fair housing law. It threatens to substantially weaken fair housing enforcement and gives comfort to those who have found more subtle, clever, or technologically sophisticated ways to discriminate.”
The proposed rule change will create difficulty for those seeking to file a case under the FHA. Under the current rule, there is a three-step, burden-shifting process in which the plaintiff must first show that a policy is causing a discriminatory effect. The defendant must then show that the policy is necessary to achieve valid, nondiscrimatory interests. The burden then shifts back to the plaintiff to prove, if possible, that the defendant’s interests could be achieved with a policy that is less discriminatory.
HUD’s proposed rule replaces the three-step burden-shifting process with a five-point prima facie evidentiary test, requiring plaintiffs to prove (1) that a policy is “arbitrary, artificial, and unnecessary” to achieve a valid interest; (2) a “robust causal link” between the challenged policy and a disparate impact on members of a protected class; (3) that the policy has a negative effect on “members of a protected class”; (4) that the disparity caused by the policy is “significant”; and (5) that the “complaining party’s alleged injury” is directly caused by the challenged policy.
HUD ‘s decision to gut the disparate impact tool will create profound negative impacts on millions of Americans regardless of their background. The racial and wealth disparities within communities will worsen and last for decades.
The FHJC is joining other members of the National Fair Housing Alliance in an organized effort to save disparate impact and beat back this assault on our civil rights. NFHA has created a website – www.defendcivilrights.org – where visitors can learn about the issue and leave an official comment for HUD during the 60-day public comment period, ending October 18th.
The FHJC urges all of its supporters to visit the site, leave a comment, and spread the word on social media to fight back against this blatant attack on everyone’s civil rights.