NCSHA Urges HUD to Clarify Disparate Impact Rule

On August 16, NCSHA submitted comments to HUD on the agency’s 2013 Disparate Impact Final Rule, which implements the Fair Housing Act’s discriminatory effects standard. HUD had requested public comments on the rule because it is considering modifying the rule in light of the Supreme Court’s 2015 decision in Texas Department of Housing and Community Affairs vs. Inclusive Communities Project, Inc.

NCSHA supports the adoption of the Disparate Impact Rule. However, we encouraged HUD to make two important clarifications in keeping with the majority opinion in the Supreme Court case. Specifically, NCSHA recommends that HUD modify the Disparate Impact Rule to:

  • State that to be successful in establishing a prima facie case under step one of the burden-shifting process, plaintiffs must demonstrate a robust causality between the challenged policy or policies and the disparity.
  • Acknowledge that policies meet the legally sufficient justification under step two in the burden-shifting process as long as they are not artificial, arbitrary, and unnecessary.

In Texas DHCA vs. ICP, the Court found that disparate impact claims are cognizable under the Fair Housing Act. However, the majority opinion provides greater context on the standard that those claims must meet to be successful in litigation. The clarifications NCSHA suggests would ensure greater consistency between the Disparate Impact Rule and the Court’s decision in this case.

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