law pg 11,12.qxp_Layout 1 8/19/21 7:49 AM Page 1
It’s the Law
By HOWARD BOOKSTAFF, Hoover Slovacek LLP , HAA General Counsel
HUD PROPOSES REVIVAL OF DISCRIMINATORY EFFECTS RULE Review your policies today.
ON JUNE 25, 2021, Housing and Urban Development Secretary Marcia L. Fudge stated: “We must acknowledge that discrimination in housing continues today and that individuals, including people of color and those with disabilities, continue to be denied equal access to rental housing and homeownership. It is a new day at HUD – and our Department is working to lift barriers to housing and promote diverse, inclusive communities across the country.” In 2020, HUD published a disparate impact rule. Ultimately, the 2020 rule never took effect. After reconsidering the 2020 rule, HUD now also proposes bringing back the 2013 discriminatory effects rule they published in 2013. According to HUD, under the 2013 rule, the discriminatory effects framework was straightforward: A policy that had a discriminatory effect on a protected class was unlawful if it did not serve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative could also serve that interest. The 2020 rule complicated that analysis by adding new pleading requirements, new proof requirements and new defenses, all of which made it harder to establish that a policy violates the Fair Housing Act. HUD now proposes to return to the 2013 rule’s straightforward analysis. HUD published a proposed rule on June 25, which restores the 2013 discriminatory effects rule. It remains open to public comment through August 24. Although the change is not yet in effect, it is likely to occur. Let’s take a look at the rule purposed www.haaonline.org
on June 15 and how it might affect your policies and procedures.
In 2020, HUD published a disparate impact rule. Ultimately, the 2020 rule never took effect. After reconsidering the 2020 rule, HUD now also proposes bringing back the 2013 discriminatory effects rule they published in 2013.
Liability Under the June 25 Proposed Rule The proposed rule states that liability may be established under the Fair Housing Act based on a practice’s discriminatory effect, even if the practice was not motivated by a discriminatory intent. The practice may still be lawful if supported by a legally sufficient justification. Note the following definitions:
• Discriminatory Effect: A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status or national origin. • Legally Sufficient Justification: A legally sufficient justification exists where the challenged practice: (i) is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests; and (ii) those interests could not be served by another practice that has a less discriminatory effect. A legally sufficient justification must be supported by evidence and may not be hypothetical or speculative. • Burdens of Proof in Discriminatory Effects Cases: Step One: - The complaining party has the burden
of proving that a challenged practice caused or predictably will cause a discriminatory effect. Step Two: - Once the complaining party satisfies its initial burden, the housing provider will have the burden of proving the challenged practice is necessary to achieve one more substantial, legitimate, nondiscriminatory interests of the housing provider. Step Three: - If the housing provider satisfies its burden of proof (as identified above in step two), the complaining party may still prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect. • Discriminatory Effects versus Intent: A demonstration that a practice is supported by legally sufficient justification may not be used as a defense against a claim of intentional discrimination. Review Your Policies All policies should be reviewed to determine whether any could actually or predictably result in a disparate impact on a group of persons in a protected class. For September 2021
ABODE
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