A recent action by the U.S. Department of Housing and Urban Development has now formalized a national standard for determining violations of the Fair Housing Act. The new rule known as 'disparate impact' embraces a long-held civil rights view that housing discrimination and lending occur not only by intent; but also by effect.
"Through the issuance of this Rule, HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner," said HUD Secretary Shaun Donovan. "This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination."
Enacted in 1968 following the assassination of Dr. Martin Luther King, Jr. the Fair Housing Act bans discrimination in the sale, rental and financing of housing based on race, religion, national origin or sex. The Act was later amended to include family status and the physically-challenged.
Despite the Fair Housing Act, some real estate agents, landlords, lenders and even local governments continued practices that had an unjustified effect of discriminating against many well-qualified home seekers. As a result, many consumers were locked out of housing opportunities that provided convenient access to quality schools, health care and more. The new regulation reaffirms what the law intended over 40 years ago.
In response to HUD's rule announcement, a chorus of civil rights and fair housing advocates hailed the move.
"Every federal court of appeals that has considered this issue has concluded that liability under the Fair Housing Act can be established by proof of disparate impact," said Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights. "This doctrine, now codified, is a powerful tool to combat redlining, housing discrimination and predatory lending."
"We need look no further than the nation's foreclosure crisis to see how many homeowners in communities of color as well as families with children, people with disabilities and many others have been devastated by the disparate impact of discriminatory housing and lending policies," said Shanna Smith, president and CEO of the National Fair Housing Alliance. "People of color, including many in the middle class have lost a century of household wealth because of these practices. While some of these practices are unintentional, many others are built on the explicitly discriminatory practices of the past."
"This is a profound step forward in the fight of discrimination," said Janis Bowdler, director of economic policy with the National Council of LaRaza.
Since early 2012, HUD solicited and received input from a broad base of interested concerns. Fair housing and legal aid organizations, state attorneys general, financial institutions, state governments and citizen activists all helped HUD to craft a rule that would be consistently and fairly applied.
According Mike Calhoun, president of the Center for Responsible Lending (CRL), "Fair housing is fundamental to every family's pursuit of the American Dream. By issuing this disparate impact rule, HUD reaffirmed the nation's commitment to fairness for all. CRL lauds the vigilance of the entire civil rights community for its long and hard-fought effort helping to make America's reality live up to its promises.
Charlene Crowell is a communications manager with the Center for Responsible Lending