CityLab: How HUD Could Reverse Course on Racial Discrimination

CityLab, June 21, 2018: How HUD Could Reverse Course on Racial Discrimination

The U.S. Department of Housing and Urban Development signaled on Wednesday that it may reverse an Obama-era rule that bans more subtle forms of discrimination in housing.

At a time when the department is already locked in a court battle over fair housing law and proposing to raise rents on low-income families, the move indicates Secretary Ben Carson’s efforts to rethink the department’s fundamental obligation to protect vulnerable residents against discrimination.

The department issued a notice that it plans to revisit its rule regarding “disparate impact,” a legal doctrine that prohibits discrimination that happens as an effect of a policy whose language is otherwise neutral. Under this standard, lenders and landlords may not enact any practice that disproportionately negatively affects minorities, even if the practice itself is not explicitly discriminatory.

HUD adopted a final rule on the disparate impact provision in 2013, formally recognizing a ban on any “facially neutral practice that has a discriminatory effect.” The rule confirmed the department’s long-held reading of the Fair Housing Act, making its use consistent across jurisdictions. The U.S. Supreme Court further weighed in on disparate impact in 2015, affirming in a 5-4 decision that civil rights law indeed prohibits policies that indirectly affect minorities adversely. Eleven earlier federal appellate courts all confirmed the doctrine.

“This new advance notice of proposed rulemaking appears to ask the kinds of questions that you might ask if you were trying to water down a rule,” says Jesse Van Tol, CEO of the National Community Reinvestment Coalition, a nonprofit that promotes fair practices in lending and housing. “Are there loopholes that should be provided? Is the rule burdensome?”

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