HUD’s proposed revisions to its disparate impact rule were published in today’s Federal Register. Comments on the proposal are due on or before October 18, 2019.
Originally adopted in 2013, the rule sets forth the requirements for HUD or a private plaintiff to establish liability under the Fair Housing Act for discriminatory practices based on disparate impact even if there is no discriminatory intent. The proposed revisions include a new burden-shifting framework and other changes to reflect the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v Inclusive Communities Project, Inc.
Under the proposal, a plaintiff would need to allege five elements to establish a prima facie case based on a claim that a policy or practice has a discriminatory effect, including that the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective and that there is a robust causal link between the challenged policy or practice and a disparate impact on members of a protected class which shows the specific policy or practice is the direct cause of the discriminatory effect. As might be expected, HUD’s announcement this past Friday that it was releasing the proposal was quickly followed by criticism of the proposal from consumer groups.