Q: What is the disparate impact tool?

Disparate impact is a longstanding legal tool to fight discrimination and ensure equal housing opportunity under the Fair Housing Act. It requires banks, landlords, and other housing providers to choose policies that apply fairly to all people. Some policies that seem neutral in theory can unfairly exclude certain groups of people or segregate particular communities in practice. This protection allows us to identify and prevent harmful, inequitable, and unjustified policies, thereby ensuring that everyone can be treated fairly.

In a disparate impact case, a person can challenge unjustified policies or practices that disproportionately harm people protected by the Fair Housing Act. Courts have allowed disparate impact claims for over 45 years. Use of disparate impact was affirmed by the Supreme Court in a 2015 ruling in Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project.

Q: Who is helped by disparate impact?

The disparate impact tool helps make housing accessible for families with children, women, LGBTQ people, people with disabilities, people of faith, and communities of color. It has played a critical role in advancing civil rights and equal opportunity and addressing the segregation that still persists in America. Disparate impact is used to address disparities in rental practices, lending, property insurance, zoning, and other areas. But its impact extends far beyond housing. Gutting this protection under the Fair Housing Act is part of the Trump administration’s broad-based attack on using disparate impact to address discrimination in other areas, including education, employment, healthcare, the environment, transportation, and the criminal justice system. We must fight any efforts to take away the rights that we all share and hold dear.

Q: Is housing discrimination even still a concern in America?

Yes. In fact, more than 4 million instances of housing discrimination occur each year, and the vast majority are unreported. When Americans are denied equal access to housing, it reduces the availability of good jobs, quality education, and a clean and healthy environment, all of which are central to the American Dream.

Q: What is the Fair Housing Act?

The Fair Housing Act prohibits discrimination on the basis of race, color, national origin, gender, religion, disability, and familial status. Congress passed the Fair Housing Act with broad bipartisan support one week after the assassination of Dr. Martin Luther King Jr. in 1968. It remains one of the most critical civil rights laws for advancing racial and other forms of equality.

Q: What is HUD proposing and how does it affect the Fair Housing Act?

HUD is proposing to gut the longstanding legal tool known as disparate impact under the Fair Housing Act. This is one of the Trump administration’s most extreme moves to dismantle anti-discrimination laws. The proposed rule would allow financial institutions, insurance companies, and housing providers to engage in covert discriminatory practices by dramatically weakening disparate impact liability. This would effectively destroy a 45-year-old protection against housing discrimination and would pave the way for widespread harm to millions of people across the country while businesses pad their profit margins. Specifically, the proposed rule provides:

  • Overwhelming obstacles to prove discrimination: Victims of discrimination will face a drastically higher burden to prove a disparate impact claim under the Fair Housing Act, making it virtually impossible to succeed. Victims are asked to play a rigged game of whack-a-mole, trying to guess what justifications a defendant might invoke and preemptively debunk them.
  • Profits above all else: Language in the proposed rule suggests that a practice or policy that is profitable could be immune from challenge for its discriminatory impact — with the burden on discrimination victims to show that a company can make at least as much money without discriminating.
  • Discrimination by algorithm: The proposed rule would provide special defenses for business practices that rely on statistics or algorithms. Disparate impact is a critical tool to rein in discrimination in the use of algorithmic models — such as credit scoring, pricing, marketing, and automated underwriting systems. These can have starkly discriminatory effects but can operate as a hidden box, making those discriminatory effects difficult to attribute to any person’s intentional discrimination. HUD’s proposed rule could effectively immunize such covert discrimination by algorithm.
  • No data, no records, no accountability: Businesses are disincentivized to collect important data that can reveal discrimination. This means that victims of discrimination will be unable to identify whether discrimination is happening and lack the ability to challenge it if they do detect discrimination.
Q: Who will be impacted by this proposal?

If the Trump administration destroys this powerful civil rights tool, millions of our families, friends, neighbors, and communities could be harmed:

  • A landlord could evict victims of domestic violence based on common leases that hold all tenants, even victims, responsible for crimes in their homes. This would place women — the primary victims of domestic abuse — and their children at risk of homelessness and further violence.
  • A landlord could exclude applicants who don’t hold full-time jobs. This action would bar people with disabilities or seniors who may not work full-time but can still afford an apartment.
  • A bank could charge excessive fees or rates to certain groups who seek home mortgage loans. Given these barriers, people of color or people with disabilities would be forced to take on risky or costly loans — or not have access to financing at all.
  • An apartment building could restrict occupancy to one person per bedroom. Families with children would be barred from renting or would be forced to rent more expensive multi-bedroom apartments.
  • An insurance company could refuse to insure homes under a certain dollar value. In many communities, this would exclude homes in neighborhoods of color from quality insurance and would prevent homeowners in those areas from fully protecting their homes from damage due to fire, hurricanes, or other disasters.
Q: What can we do to stop this?

Take action now and join the campaign to Defend Civil Rights!

  1. Submit a comment telling HUD that you oppose the Trump administration’s attempt to destroy this crucial civil rights protection and open the floodgates to discrimination.
  2. Ask your friends and family to take action and submit a comment.
  3. View our resources for images and posts to share on social media.