The U.S. Supreme Court on June 17 agreed to hear a case involving federal housing discrimination law, the outcome of which will determine the validity of the U.S. Department of Housing and Urban Development’s (HUD’s) “discriminatory effects rule.”
Published on Feb. 8, 2013, this rule essentially codifies HUD’s long-held position that the Fair Housing Act applies not only to acts of intentional discrimination but also actions and policies that have a disparate impact on a protected class, regardless of intent. The rule also established uniform standards for determining when a real estate practice or policy violates the act.
The court’s final decision will affect apartment owners, managers and developers, as HUD’s new rule has called into question some often used industry and business practices, such as resident screening.
In the case, Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., the New Jersey township created a plan for redeveloping a blighted neighborhood occupied mostly by low- and moderate-income minority households. Residents filed suit against the township, arguing that the redevelopment lacked affordable housing and, therefore, had a disparate impact on minorities and violated the Fair Housing Act.
Backed by decisions from eleven of the thirteen federal courts of appeals, HUD and the U.S. Department of Justice(DOJ) maintain the Fair Housing Act was meant to be broadly applied and therefore includes liability for disparate impact.
HUD recently published a new study, Housing Discrimination Against Racial and Ethnic Minorities 2012, that showed subtle forms of housing discrimination persists even as obvious discriminatory treatment, such as refusing to provide information about a housing unit or denying a request to see an available unit, is declining.
NMHC/NAA previously filed an amicus brief asking the court to weigh in and determine once and for all whether disparate impact claims are allowed under the Fair Housing Act.
The Supreme Court plans to hear the case in the fall. The petitioner’s brief from the township is due in early August, followed by amicus briefs in support of the petitioner.