NMHC and NAA will soon file comments with the U.S. Department of Housing and Urban Development (HUD) voicing strong support for the agency’s newly released Proposed Rule on Disparate Impact under the Fair Housing Act (FHA). NMHC has long-raised concerns that HUD’s existing disparate impact doctrine created uncertainty for housing providers and undermined the use of necessary business practices and have argued for the agency to better align its’ regulations and policies with recent court decisions.
The Proposed Rule directly addresses a number of our priorities and is an important step in addressing barriers to new apartment development and housing affordability. We strongly encourage NMHC members to take action as well and submit additional comments. The deadline for filing comments with HUD is October 18, 2019.
Of concern, disparate impact theory creates liability for seemingly neutral policies that nonetheless have a discriminatory effect on a protected class. In 2013, HUD issued a final rule formalizing the agency’s position on disparate impact liability and establishing uniform standards for determining when a real estate practice or policy violates the FHA. Subsequently, the U.S. Supreme Court issued the milestone Inclusive Communities decision on disparate impact liability, which created new limitations on the use of the theory.
NMHC and NAA documented the diverging disparate impact standards being used in a white paper last year that reviews a range of court cases involving: tax credit allocation, project decision making, mortgage lending, zoning, preference policies, insurance and screening policies. The paper provides greater clarity on disparate impact implications for the apartment industry and shows a need to update HUD policies with new legal precedent.
We are encouraging HUD to expeditiously finalize the final rule to ensure that housing providers can execute necessary business practices without running afoul of fair housing requirements.
NMHC members are encouraged to submit individualized comments including information about their company and the impact of uncertain fair housing conditions. Information on submitting a comment text is available here.