NMHC/NAA will soon file comments with the U.S. Department of Housing and Urban Development (HUD) raising concerns about the conflicts between the agency’s Final Rule on Disparate Impact and the Supreme Court’s decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (Inclusive Communities). NMHC/NAA have long-argued that numerous HUD regulations and guidance documents reinforce an interpretation of disparate impact that conflicts with recent legal precedent and creates uncertainty in housing providers use of long-held, business practices.

We strongly urge NMHC/NAA members to take action as well and submit additional comments. The deadline for filing comments with HUD is August 20, 2018. 

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 Fair Housing Act (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/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 urging HUD to revise the Final Rule to ensure compatibility with the Supreme Court and reissue guidance that helps housing providers execute necessary business practices without running afoul of fair housing requirements.  

NMHC/NAA 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 and example comment text is available here.