MVFHC praises new HUD rule clarifying how disparate impact in housing-related transactions is prohibited by the Fair Housing Act
February 8, 2013 — The Miami Valley Fair Housing Center (MVFHC) welcomes a new rule issued today by the U.S. Department of Housing and Urban Development (HUD) formalizing a national standard for determining whether housing-related policies having a disparate impact are discriminatory and prohibited by the Fair Housing Act.
“Through the issuance of this rule, HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner,” said HUD Secretary Shaun Donovan. “This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination.”
HUD, statutorily charged with responsibility for interpreting and enforcing the Fair Housing Act, has long interpreted the Act to prohibit housing practices with an unjustified discriminatory effect, if those practices actually or predictably result in a disparate impact on a protected class.
The rule allows complaints to be filed under the Act if a group can show a “discriminatory effect” or that a protected class was disparately impacted by the alleged illegal practices. In other words, no actual intent to discriminate is needed as long as the disparate impact can be shown. The rule also makes clear that housing-related transactions such as home loans and homeowners insurance are covered by the Act.
The rule does not change decades-old substantive law articulated by HUD and the courts. It adds no additional costs to housing providers and others engaged in housing transactions. Rather, the rule will simplify compliance with the Fair Housing Act’s discriminatory effects standard and will decrease litigation.
“We are pleased that HUD has issued this new rule,” said Jim McCarthy, MVFHC’s President/CEO. “Making sure that people are treated equally in all housing transactions, including lending and insurance, helps our mission of ensuring equal housing opportunity for all people in our region.”
How is disparate impact a part of the Fair Housing Act? The Fair Housing Act prohibits both intentional discriminatory acts and facially “neutral” policies that may limit housing opportunities based on race, color, national origin, religion, or sex, or for families with children and people with disabilities. Any policy that has a discriminatory effect on a protected class must be changed so that it is both fair and effective, unless no other policy can achieve the same legitimate goal with a less discriminatory effect.
At a recent conference on housing issues, Sara Pratt, HUD’s chief of enforcement, explained the importance of the disparate impact standard for ensuring fair housing, saying that while overt discrimination has lessened, discrimination still occurs. “Landlords, housing professionals, and zoning and planning boards have learned to stop talking about it,” Pratt said. “What they haven’t learned is to stop doing it.”
Although the principle of disparate impact is not directly mentioned in the Fair Housing Act, it has been recognized by 11 circuit courts as a legally acceptable means by which parties can make claims under the Act. By creating a framework to root out not just intentional discrimination but also seemingly “neutral” policies, the Fair Housing Act enables HUD, state and local agencies, and private fair housing organizations to continue to address systemic housing discrimination and segregation in the United States.
What are some policies that have a disparate impact?
Families with children: A mobile home park charges rent by the head, making it more expensive to rent for families with children. Instead, the landlord could charge by the size of the unit.
Disabled veterans: An apartment complex allows only people with full-time jobs, thus barring disabled veterans who cannot work—even if they can afford to pay the rent. The complex could instead consider all income to assess a potential tenant’s ability to pay.
The disparate impact standard strengthens our communities and our nation. Implementing the disparate impact rule helps us maintain open markets free from discrimination—a critical component to the prosperity of America’s future. Discrimination disrupts our economy, causing inefficiency and instability by constraining the full economic participation of all hard-working Americans.
The final rule as sent to the Federal Register for publication is available on HUD’s website (Acrobat PDF).
Previous news items are available here.
Resources and useful links
MVFHC provides legal counsel and advice at no cost for foreclosure cases involving residential mortgages.
If you have received a foreclosure complaint, call MVFHC at 937-223-6035.
If you are struggling with your mortgage payments but have not yet been served with a foreclosure notice, please contact the HomeOwnership Center of Greater Dayton at 937-853-1600.
Reasonable Modifications and Accommodations
Have questions about what your rights or responsibilities are under the federal Fair Housing Act for persons with disabilities? Now available online in the Services/Reference section are joint statements from the Department of Justice and the Department of Housing and Urban Development that explain reasonable modifications
Service Animal Policy
A Service Animal Policy
is now available available online in the Services/Reference section. The policy explains what service animals are and how they are a reasonable accommodation under the Federal Fair Housing Act and also provides practice guidelines for housing providers
and for tenants
Additional Landlord/Tenant info
Also, if you are a landlord or a tenant wanting information on your rights and duties under Ohio law, the Dayton-Montgomery County Ombudsman's Office has a page about landlord/tenant issues
Mobile Home Park residents
rights and responsibilities
A booklet outlining your rights and responsibilities when renting mobile homes or lots in mobile home parks is available on the Ohio Legal Services website
Fair Housing Advertising Word and Phrase List
A word and phrase list
intended as a guideline to assist in complying with state and federal fair housing laws is available online in the Services/Reference section.
Equal Housing Opportunity usage guidelines
on the usage of the "Equal Housing Opportunity" logo and slogan are available online in the Services/Reference section.
Fair Housing Accessibility FIRST
is an initiative sponsored by the U.S. Department of Housing and Urban Development (HUD) that promotes compliance with the Fair Housing Act design and construction requirements. Visit www.fairhousingfirst.org
for instruction programs and useful online resources.
is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy efficient products and practices. To learn how you can save money in your home, visit www.energystar.gov
Copies of special reports such as Analyses of Impediments to Fair Housing Choice released by local jurisdictions as well as other reports done by MVFHC on zoning and predatory lending are available on the reports