HUD’s Recent Revision of Discrimination ‘Because of Sex’ By David Levy

FAIR HOUSING MONTH BRIEFING:

HUD’s Recent Revision of Discrimination ‘Because of Sex’

BY DAVID LEVY, PROGRAMS SPECIALIST, FAIR HOUSING COUNCIL OF ORANGE COUNTY

Since a 1974 amendment to the original 1968 Fair Housing Act (FHA), it has been illegal across the nation to discriminate in any housing-related activity ‘because of sex.’ Sex was added as a fifth basis covered by the FHA, which originally focused on race, color, religion and national origin. That change, brought about by the same law that among other things created the Community Development Block Grant (CDBG) program, was consistent with many changes in federal law outlawing sex discrimination that took place in the 1970s. As some will remember, during that time there was an ultimately unsuccessful attempt to adopt the Equal Rights Amendment (ERA) to the United States’ Constitution. Interestingly, due to the unintended consequence of an unsuccessful ‘poison pill’ attempt to scuttle the Civil Rights Act of 1964, the outlawing of sex discrimination in employment had been the law of the land for 10 years at the time of the FHA’s amendment. That last fact is of consequence, because it is the judicial interpretations of the protection ‘because of sex’ available in the context of employment that have now given rise to an expansion by the U.S. Department of Housing and Urban Development (HUD) in how it will treat claims of discrimination ‘because of sex’ in the housing context. It should be noted that it is not that unusual that interpretations of anti-discrimination provisions of employment law have an influence on housing discrimination law. A substantial amount of the legal framework applied to analyzing and shaping housing discrimination litigation has originated from civil rights cases dealing with employment discrimination.

Throughout most of its history, the basis of ‘because of sex’ had been fairly narrowly interpreted. Generally, it was viewed from the point of view that sex should be taken to mean a person’s gender as determined at birth. Differential or adverse treatment shown to have been motivated by that gender were found to be discriminatory. Also, due to fact that women are overwhelmingly the victims of sexual harassment, courts had found in both the employment and housing contexts that ‘because of sex’ is applicable to address that harassment. Similarly, in the housing context it was found applicable to discriminatory conduct towards victims of domestic violence, who again are overwhelmingly women. However, until recently the interpretation did not extend to differential or adverse treatment based on person’s sexual orientation or gender identity.

On June 15, 2020, the U.S. Supreme Court issued a ruling covering three cases that had arisen from and formed a ‘split decision’ within three different federal Circuit Courts of Appeals. In an employment case known as Bostock v Clayton County, by a 6–3 ruling, the Court determined that discrimination on the basis of sexual orientation or gender identity is necessarily also discrimination “because of sex” as prohibited by Title VII of the Civil Rights Act of 1964. In light of that ruling, fair housing advocates were quick to pronounce that litigation to address housing discrimination on the basis of person’s sexual orientation or gender identity, including a person being transgender, would be viable under the FHA, given its same use of the ‘because of’ construction.

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Now, with the new presidential administration in place, and as a result of President Biden’s Executive Order 13988 on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation, HUD has issued a memorandum that has instructed its Office of Fair Housing and Equal Opportunity (FHEO) and its fair housing program grantees to interpret sex discrimination under the FHA to include discrimination because of sexual orientation and gender identity. The February 11, 2021 memorandum issued by Acting Assistant Secretary for Fair Housing & Equal Opportunity, Jeanine M. Worden, specifically instructs that “immediately, FHEO shall accept for filing and investigate all complaints of sex discrimination, including discrimination because of gender identity or sexual orientation that meet other jurisdictional requirements.” It requires grantees under the Fair Housing Initiative Program (FHIP), such as the Fair Housing Council of Orange County, to interpret sex discrimination under the FHA to include discrimination because of sexual orientation and gender identity. And for complaints originally filed with FHEO but referred to state and local agencies that process those cases through the Fair Housing Assistance Program (FHAP), their process must be consistent with the holding in Bostock. The state or local law under which the FHAP agencies operate either must explicitly prohibit discrimination because of gender identity and sexual orientation, which is already the case in California, or they must interpret existing sex discrimination coverage to include discrimination because of gender identity and sexual orientation.

An important thing to note is that HUD’s action is based on an Executive Order and an internal memorandum, neither of which has the same legal standing as a statute or even a properly adopted regulation. While the decision in Bostock is of significance in supporting the application of the FHA to sexual orientation and gender identity, it remains to be seen if those called to answer to complaints based on this interpretation of the FHA will bring judicial challenges to that interpretation. Such challenges might delay the resolution of those complaints, but at the same time they may also end in a complete affirmation of the correctness of the interpretation, making moot the need for formal regulation or statutory language. It is also possible that the Bostock decision will be the impetus to amend the FHA to explicitly include these bases. The Equality Act recently passed by the U.S. House of Representatives would do just that. It remains to be seen what portions of that bill might survive consideration in the U.S. Senate, but an alignment of the FHA with the holding in Bostock is perhaps more likely than not.

So given the foregoing, is this new HUD interpretation of ‘because of sex’ of any consequence to California? As earlier stated, the state’s Fair Employment and Housing Act (FEHA), which is enforced by the Department of Fair Employment and Housing (DFEH), has explicitly covered sexual orientation since 2000, and gender identity and expression since 2012. DFEH has substantial experience in handling complaints for housing discrimination that have been filed on those bases. So, will the ability of victims of that type of discrimination to file with FHEO instead of DFEH have much of an effect? Well, it might.

If FHEO decides to retain such complaints instead of referring them to DFEH in its capacity as a FHAP agency, any complaints proceeding to a HUD charge of discrimination might then result in a filing in federal court. Either the complainant or the responding charged party, in a case that does not otherwise reach a binding settlement, has the right to remove it to federal court instead of having it heard by an Administrative Law Judge. The complainant is then essentially represented by the U.S. Department of Justice, which brings the case on behalf of the United States of America. The alleged victim of the discrimination then may choose to intervene as a plaintiff and secure their own counsel. Another difference is that in the federal process there is no mandate for an attempt to reach a mediated settlement before proceeding to a court filing, as there is in the state process following a charge. State complainants who do not mediate in good faith may forfeit their right to have DFEH represent them in state court. In general and for several reasons, fair housing advocates have a preference for litigation in the federal courts rather than state ones, but of course that being readily available will depend on the choice of HUD to retain a complaint or refer it to a FHAP agency.

Only time will tell whether this recent change by HUD will result in any meaningful impact for California victims of housing discrimination on the basis of sexual orientation or gender identity.

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About the Author: David Levy, Programs Specialist with the Fair Housing Council of Orange County (FHCOC), has over 27 years’ experience in the areas of fair housing, landlord-tenant law and housing affordability. In addition to his work with FHCOC, he serves on the boards of the Kennedy Commission, the Affordable Housing Clearinghouse, and the Clearinghouse Community Development Financial Institution (CDFI), all located in Orange County, California.

This article is based on work supported by HUD under FHIP Grant #FEOI1900445. Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of HUD.