Activists argue the change will make it easier for businesses and landlords to discriminate and harder for tenants to bring lawsuits for housing discrimination. 

The U.S. Department of Housing and Urban Development officially announced on Friday proposed changes to the 2013 “disparate impact rule,” new guidelines that activists argue will make it easier for businesses and landlords to discriminate and harder for tenants to bring housing discrimination suits.

The updated rule, entered into the Federal Register on Monday, would outline a five-step threshold for plaintiffs to prove unintentional discrimination and give defendants more guidance on how to rebut the claims. As with all proposals, there will be a 60-day comment period. After the comments are closed and digested, HUD will publish a final rule and guideline for implementation. Rule-making is under the purview of the executive branch.

“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,” HUD Secretary Ben 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.”

Carson has argued that the rule will provide legal clarity and bring the disparate impact rule – when housing discrimination occurs unintentionally – more in line with a 2015 Supreme Court ruling. In that 2015 ruling in the case of Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc., the court upheld disparate impact but set vague limitations on applying the rule.

Under the new guidance, plaintiffs would now have to establish a link that the practice in question is, “arbitrary, artificial and unnecessary,” and establish a robust link between the practice and impact. It further requires the plaintiff to prove the practice will have an impact on an entire protected class — and not just an individual member of a protected class. The final two steps require the plaintiffs to prove the disparity is significant, and for them to show that their alleged injury is directly caused by the challenged practice.

The rule previously only had a three-step process. First, the plaintiff must prove the practice has a “discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin,” according to the Code of Federal Regulations.

The second step shifts the burden onto the defendant to argue whether or not there’s a legally sufficient justification for the practice in question.

Finally, the investigating agency must determine, even if there’s a legally sufficient justification, whether or not there are “alternative practices that may be comparably effective with less disparate impact,” according to the U.S. Department of Justice. 

Housing advocates believe that the updated policy is intended to gut the existing disparate impact ruling and provide guidance for defense against disparate impact lawsuits.

“Making the federal fair housing law less accessible and setting the bar even higher to prove discrimination is sending exactly the wrong message to both consumers and the housing industry alike,” Caroline Peattie, executive director of Fair Housing Advocates of Northern California, said in a statement.

“It’s telling people in the housing industry – including managers, owners, Realtors, lenders, and insurers – ‘go ahead, you can discriminate, as long as you’re careful about it and aren’t obvious about showing intent,’ while telling consumers – renters and buyers who are supposed to be protected under the Fair Housing Act – that it may not be worth filing a complaint because it will be too difficult to prove that what you experienced was illegal discrimination,” Peattie continued.

The National Fair Housing Alliance (NFHA) also condemned the rule, saying it would be virtually impossible to challenge “covert discriminatory practices,” by financial institutions, insurance companies and housing providers while opening the floodgates for widespread discrimination against classes protected by the Fair Housing Act.

NFHA has launched a campaign called “Defend Civil Rights,” which aims to mobilize housing advocates across the country to oppose the rule.

“From day one, the Trump administration has been working to obliterate the rights and liberties of millions of people, and now they’ve launched one of the most aggressive attacks on civil rights protections,” Lisa Rice, president and CEO of NFHA said in a statement. “The National Fair Housing Alliance strongly condemns HUD’s proposed rule that would effectively gut the ‘disparate impact’ tool under the Fair Housing Act. This rule is a blatant attempt to destroy hard-won protections against housing discrimination in this country, and we will stop it.”

Email Patrick Kearns

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