On March 17, 2023, HUD submitted to the Federal Register for publication a Final Rule entitled Restoring HUD's Discriminatory Effects Standard. The Final Rule rescinds the Department's 2020 rule governing Fair Housing Act disparate impact claims and restores the 2013 discriminatory effects rule.
According to HUD, the 2013 rule is more consistent with how the Fair Housing Act has been applied in the courts and in front of the agency for more than 50 years, and that it more effectively implements the Act's broad remedial purpose of eliminating unnecessary discriminatory practices from the housing market. The discriminatory effects doctrine, which includes disparate impact and perpetuation of segregation, addresses policies that unnecessarily lead to systemic inequality in housing, regardless of whether they were deliberately discriminatory in nature. Under the HUD's 2013 discriminatory effects rule, a policy that had a discriminatory effect on a protected class was unlawful if it was not necessary to achieve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative could also serve that interest. According to HUD, the 2020 rule complicated the analysis by requirements that made it more difficult to establish that a policy violates the Fair Housing Act. Thus, the HUD now returns to the 2013 rule’s straightforward analysis.
The Final Rule will take effect 30 days after it is published in the Federal Register.
Read the HUD’s press release here.
The Final Rule can be found here.