Proposed Disparate Impact Rule Published – Public Comment Period Now Open
Dear NAA Affiliates and Members,
NAA and NMHC are voicing strong support for the U.S. Department of Housing and Urban Development’s (HUD) proposed rule on disparate impact, which was published in the Federal Register on August 19. The rule proposes to amend the agency’s interpretation of the Fair Housing Act’s (FHA) disparate impact standard to better reflect the U.S. Supreme Court’s (SCOTUS) 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (also known as “Inclusive Communities”).
As background, a rental housing provider can be sued under disparate impact theory if the owner or operator implements a policy that is neutral on its face but nonetheless has an unintended, discriminatory effect on members of a protected class under the FHA. In 2013, HUD issued a final rule that formalizes the agency’s position on disparate impact liability and establishes uniform standards to determine when a real estate practice or policy violates the FHA. Subsequently, the Supreme Court issued a milestone decision on disparate impact liability in Inclusive Communities, which created new limitations on the use of the standard.
NAA and NMHC have long-raised concerns about the conflicts between the agency’s 2013 final rule on disparate impact and SCOTUS’ decision in Inclusive Communities. In response to the advanced notice of proposed rulemaking for this rule, we urged HUD to reissue guidance that helps housing providers execute long-held business practices without running afoul of fair housing requirements.
NAA and NMHC are currently conducting a thorough review of the proposed rule and plan to submit comments by the deadline on October 18, 2019. We strongly encourage industry professionals to take action and submit additional comments. Affiliate staff and members should be on the lookout for instructions from NAA on how to take action prior to the October comment deadline.
To learn more about disparate impact and our advocacy efforts, visit the Disparate Impact page on the NAA website.
Gregory S. Brown
Senior Vice President, Government Affairs