An important milestone for civil rights: HUD issues final fair housing “disparate impact rule”

Years in the making, HUD yesterday issued the final rule on proving “disparate impact” under the Fair Housing Act. The rule is a reaffirmation of the established standard widely used to prove a civil rights violation has occurred when the perpetrator is not caught in an overt act.

Let me say first that I am not an attorney. My view of the rule is that of a layperson. HUD’s rule seems to me to be based on a reasonable and careful standard and is consistent with the plain language of the Fair Housing Act.

HUD’s new rule is important and necessary make clear how the federal government will interpret allegations of violation of the fair housing act where the violation has the effect of discrimination but where there is no proof that the violation was deliberate. Proving what is in another person’s heart or providing exactly what motivated a city council or state legislature is usually impossible. The effect of discrimination is the same on the victim whether it is intentional or not. If a person is to be treated fairly it is the effect on the individual that matters, not the intent of the perpetrator. Therefore, it is important if the Fair Housing Act is to have any meaning, for there to be a basis to challenge the actions, particularly those of state and local government agencies, regardless of the motivation.

Yesterday HUD established in a formal rule a three-part burden-shifting test for determining a violation of the Fair Housing Act. The rule is based on a standard that has long been used by HUD and broadly supported by all eleven federal appeals courts. A story in a continuing series by ProPublic on fair housing enforcement makes the claim that the rule is being put in place to formalize this standard in advance of a possible Supreme Court challenge to disparate impact claims under the Fair Housing Act. While the Supreme Court is narrowly divided and therefore unpredictable, most experts I talk to think the Court is unlikely to strike down the long established disparate impact standard in the new HUD rule.

Fair Housing was the last major piece of civil rights legislation adopted and has been the most poorly enforced. Widespread violations continue. HUD’s background section in the release of the final rule yesterday sums up the purpose of the Fair Housing Act quite nicely.

The Fair Housing Act was enacted in 1968 to combat and prevent segregation and discrimination in housing, including in the sale or rental of housing and the provision of advertising, lending, and brokerage services related to housing. The Fair Housing Act’s “Declaration of Policy” specifies that “[i]t is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.” Congress considered the realization of this policy “to be of the highest priority.”

The Fair Housing Act’s language prohibiting discrimination in housing is “broad and inclusive;” the purpose of its reach is to replace segregated neighborhoods with “truly integrated and balanced living patterns.” In commemorating the 40th anniversary of the Fair Housing Act and the 20th anniversary of the Fair Housing Amendments Act, the House of Representatives reiterated that “the intent of Congress in passing the Fair Housing Act was broad and inclusive, to advance equal opportunity in housing and achieve racial integration for the benefit of all people in the United States.”

The Fair Housing Act gives HUD the authority and responsibility for administering and enforcing the Act, including the authority to conduct formal adjudications of Fair Housing Act complaints and the power to promulgate rules to interpret and carry out the Act. In keeping with the Act’s “broad remedial intent,” HUD, as the following discussion reflects, has long interpreted the Act to prohibit practices that have an unjustified discriminatory effect, regardless of intent.

The Fair Housing Act is designed to address profound injustices in our society that are at the root of our major social problems today. While the issue is often framed today in terms of inequality, lack of access to good schools, entrenched poverty and crime and delinquency, the underlying principally contributing issue is residential segregation – a problem that has long gone unaddressed.

Disparate impact says it a violation of the Fair Housing Act can occur by facially neutral practices that have an unjustified discriminatory effect on the basis of a protected characteristic, regardless of intent. HUD offers an example. The HUD Secretary found a violation of the Fair Housing Act occurred  when a mobile home community set an occupancy limit of three persons per dwelling because this had a discriminatory effect on families with children. While neutral on its face, the occupancy policy had a discriminatory effect on families with children because it served to exclude them at more than four times the rate of families without children. The federal courts upheld this decision on appeal.

So what does the rule say about how the federal government will decide if unlawful discrimination can be found in the effect of an action under the Fair Housing Act?

…HUD proposed a burden-shifting framework for determining whether liability exists under a discriminatory effects theory. Under the proposed burden-shifting approach, the charging party or plaintiff in an adjudication first bears the burden of proving that a challenged practice causes a discriminatory effect. If the charging party or plaintiff meets this burden, the burden of proof shifts to the respondent or defendant to prove that the challenged practice has a necessary and manifest relationship to one or more of its legitimate, nondiscriminatory interests. If the respondent or defendant satisfies this burden, the charging party or plaintiff may still establish liability by demonstrating that the legitimate, nondiscriminatory interest can be served by another practice that has a less discriminatory effect.

Here is how I think it would work in the case of the mobile home park that prohibited more than three persons.

The plaintiff, let’s say a family with a trailer who wanted to live in the mobile home community, is told by the mobile home park owner they cannot live there because they have four people in their household (two parents and two children). The Fair Housing Act prohibits discrimination based on familial status (having children). The family with the mobile home challenges the policy of the mobile home park because it has a discriminatory effect. The family with the mobile home meets the first burden so the burden shifts to the mobile home park owner to show the rule prohibiting more than three persons, “has a necessary and manifest relationship to one or more of its legitimate, nondiscriminatory interests.” Maybe the mobile home park owner says they do not want dangerous conditions to exist in mobile homes in their park caused by overcrowding too many people in a trailer. That sounds like a legitimate interest. So the burden shifts back to the family with the mobile home. Finally at the third stage the family can still win the claim, “by demonstrating that the legitimate, nondiscriminatory interest can be served by another practice that has a less discriminatory effect.” In this case perhaps the family has a trailer designed and certified to accommodate four people and with three bedrooms. The family can argue that the park owner could have set a policy that took into account the size of the trailer and number of bedrooms to fulfill the park owner’s legitimate interest to prevent overcrowding but did not do so. In this case the family has proven a violation of the Fair Housing Act.

There are lots of other instances this disparate impact standard will impact. Especially of concern to us are action taken by state and local governments in the rules they establish and the manner in which they allocate public resources.

Friday was an important day for civil rights in our country. A landmark civil rights law, poorly enforced, now has clear new standards. The law is clearer and easier to follow.

That is a good thing for all of us.