Fair Housing Enforcement & Proposed Revisions to the Disparate Impact Rule

Below please find information about proposed changes to the disparate impact rule and the link for comments. The deadline for comments is Oct. 18, 2019.

The proposed revisions to the disparate impact rule could fundamentally reshape federal fair housing enforcement. Disparate impact refers to practices or policies that have an adverse impact on certain classes of people without discriminating against them in explicit terms, such as a landlord that only accepts people with full-time jobs, which bars disabled veterans and other people with disabilities who may not be able to work full-time, even though they can afford the apartment, or a housing authority that distributes housing tax credits, which are used to build low-income housing, in a way that consolidates construction in mostly immigrant areas. The new rule would raise the burden of proof for parties claiming discrimination and would provide special defenses for business practices that rely on statistics or algorithms, such as credit scoring, pricing, and automated underwriting systems. This would create a loophole for lenders and landlords using third-party vendors by shielding them from liability while making it more difficult to attribute the discrimination to the model or algorithm.