The National Association of Realtors (NAR) called on Monday for the U.S. Department of Housing and Urban Development (HUD) to end its attempt to change the 2013 “disparate impact rule.”
The rule aims to give tenants the power to sue landlords or businesses for housing discrimination in instances where the discrimination occurs unintentionally.
“While there is debate… as to whether additional clarity is needed with respect to disparate impact claims, there is broad consensus across the country that now is not the time to issue a regulation that could hinder further progress toward addressing ongoing systemic racism,” NAR President Vince Malta said in a letter to the Department of Housing and Urban Development on Monday.
“We believe this is the time to explore how we may work together to eliminate unnecessary barriers to housing opportunity and advance policies that allow more Americans to fully participate in the American Dream… and respectfully ask that HUD withdraw its proposed rule to amend its interpretation of the Fair Housing Act’s disparate impact standard.”
HUD proposed an update to the rule in August 2019, which outlined a five-step threshold for plaintiffs to prove unintentional discrimination and give defendants more guidance on how to rebut the claims. Activists at the time argued the updated guidance would make it easier for businesses and landlords to discriminate and harder for tenants to bring housing discrimination suits.
At the time of the proposed change NAR expressed broad support for the disparate impact rule, as part of the written comment period.
“Ultimately, NAR supports disparate impact as a legal theory to address the unfair housing practices that inhibit fair housing and unfairly target members of protected classes, while still protecting the ability of Realtors and other stakeholders to run their businesses in a free and functional real estate market,” Malta said.
HUD, meanwhile, argued that the changes to the disparate impact rule were aimed at providing legal clarity and bringing the disparate impact rule 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.