NMHC and NAA joined a coalition of housing providers to file comments with the U.S. Department of Housing and Urban Development (HUD) voicing concerns over the agency’s proposal to reinstate HUD’s 2013 Rule on Disparate Impact under the Fair Housing Act (FHA). HUD’s latest action comes after the last Administration reopened consideration of the agency’s disparate impact policy and reissued a new disparate impact rule in September 2020. This proposed rule seeks to replace the revised 2020 Rule with the original 2013 Rule.
We have long-raised concerns that HUD’s 2013 rule created uncertainty for housing providers and undermined the use of necessary business practices. In 2013, HUD issued a final rule formalizing the agency’s position on disparate impact under the FHA, which creates liability for seemingly neutral policies that nonetheless have a discriminatory effect on a protected class. Subsequently, the U.S. Supreme Court issued a milestone decision on disparate impact liability in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (Inclusive Communities), which created new limitations on the use of disparate impact theory.
NMHC and NAA have documented the diverging disparate impact standards being used by HUD and various courts following the Inclusive Communities decision, and in 2018, we urged HUD to revise the 2013 Rule to ensure compatibility with the Supreme Court ruling. Since the 2013 Rule fails to address the current legal landscape, we have encouraged HUD to instead implement a rule that better aligns the HUD standard with recent legal outcomes and helps housing providers execute long-held business practices without running afoul of fair housing requirements.
For more information on disparate impact, please visit our advocacy page.