Call to Action: HUD Disparate Impact Rule Change

The Trump Administration’s Department of Housing and Urban Development (HUD) announced a rule change to eviscerate a long-standing civil rights protection known as “disparate impact” and are accepting comments until October 18th. HUD’s proposed rule, published in the federal register, would make it far more difficult to challenge discriminatory practices that are not blatant or explicit. We are partnering with the Greater New Orleans Fair Housing Action Center (GNOFHAC) and the National Fair Housing Alliance (NFHA) to overwhelm HUD with comments opposed to the rule.   

The term “disparate impact” may not be well-known, but many of our residents in South Louisiana are far too familiar with the trials and tribulations of dealing with the Road Home program after Hurricanes Katrina and Rita. Chief among the problems with the program was its discriminatory funding formula. Initially, the program used a neutral policy of offering homeowners rebuilding grants determined by the pre-storm value of their damaged home. Despite being neutral on its face, the policy resulted in homeowners in segregated white neighborhoods—which had higher pre-storm values—receiving higher grant awards than homeowners in predominantly African American neighborhoods. This was true even when the homes were the same size and age, and the damage was similar. Because of disparate impact, GNOFHAC’s lawsuit resulted in HUD and the Louisiana Recovery Authority putting $62 million dollars back in the pockets of Louisianans to rebuild their homes.

HUD’s proposed rule significantly raises the burden of proof for discrimination, provides special protections for businesses that use algorithms, and appears to lay the foundation for exempting the insurance industry from disparate impact liability. If this rule goes forward, it would make it virtually impossible to bring lawsuits like the ones that stopped the discriminatory Road Home formula, St. Bernard’s “blood relative ordinance,” and large property managers’ policies of evicting domestic violence survivors. It would simultaneously gut HUD’s own guidance about how strict criminal background policies disproportionately impact communities of color. This is HUD’s rule, but it lays the ground work for gutting civil rights protections in other realms like education, employment, and transportation.

The disparate impact theory has been used to prove housing discrimination claims since the passage of the Fair Housing Act, and has enjoyed bi-partisan support for more than 50 years, beginning with its application by Richard Nixon’s Administration. Disparate impact has been upheld by 11 Courts of Appeals and by the U.S. Supreme Court in its 2015 Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project ruling.

The National Fair Housing Alliance (NFHA) has also created a google drive with talking points and examples about how this will impact specific groups, including women, people with disabilities, families with children, Latinx communities, etc.

You can submit your comment letter to the federal register and individuals can also submit comments through a portal built by NFHA at https://defendcivilrights.org/.

Let Maxwell Ciardullo, Director of Policy and Communications with GNOFHAC, know have if you have any questions or concerns. 

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