CHAPA Submits Comment Letter to HUD to Protect Disparate Impact Rule

On August 17, CHAPA submitted a comment letter to HUD in response to the department’s Advance Notice of Proposed Rulemaking (ANPR) to reconsider its 2013 Disparate Impact rule under the Fair Housing Act. Specifically, HUD seeks public comment on whether the rule is consistent with the 2015 U.S. Supreme Court decision in Texas Department of Housing and Community Affairs v. Inclusive Communities. Disparate Impact liability arises in cases where a seemingly neutral practice has a discriminatory effect on a protected class. The Inclusive Communities decision affirmed the use of disparate impact liability to prove violations of the Fair Housing Act.

In Inclusive Communities, the Texas Department of Housing and Community Affairs was sued under a disparate impact theory for the allocation of low-income housing tax credits (LIHTC). The plaintiff argued that the department caused continued segregated housing patterns through its disproportionate allocation of LIHTC, allocating too much of the allocation for housing in predominantly black inner-city areas and too little in predominately white suburban neighborhoods.

To establish a disparate impact claim, a plaintiff must show that the challenged practice caused or predictably will cause a discriminatory effect.  If a discriminatory effect is established, the defendant then has the opportunity to prove that the practice is necessary to achieve a substantial, legitimate, non-discriminatory interest. If the defendant successfully proves there is a legally sufficient justification, the plaintiff may still prevail by proving that the legally sufficient justification could be served by another practice that has a less discriminatory effect.

In Inclusive Communities,the Supreme Court did not reach the merits of the case, and did not directly consider the HUD rule. HUD is now asking for public input regarding whether the regulation is consistent with the Court’s decision. Comments are due August 20th. 

CHAPA’s comment letter urges HUD to maintain the current rule and refrain from making changes that would restrict access to courts. The letter also asks HUD to examine and offer guidance on how bona fide community driven attempts at revitalization and anti-displacement can be pursued without violating the Rule.

Click here to read CHAPA's comment letter.