With Rule Changes, Trump Launches ‘an Attack on Fair Housing From All Sides’

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Late on Friday afternoon, as millions of Americans turned their attention to the upcoming Labor Day weekend, the U.S. Department of Housing and Urban Development announced its final rule regarding “disparate impact,” a legal doctrine that protects minorities from adverse practices and policies, even if discrimination isn’t explicit. 

Separately, another HUD rule finalized in July took effect on Sept. 8, this one dialing back the requirements for state and local governments to abide by the federal anti-segregation mandate known as “Affirmatively Furthering Fair Housing,” or AFFH.

With these twin rules, the Trump administration has fundamentally revised how the federal government polices bias by landlords, lenders, and others in the housing industry. Civil rights advocates say the changes undermine anti-discrimination principles that have stood for more than 50 years, casting aside federal tools for enforcing the Fair Housing Act of 1968, a tentpole of Civil Rights legislation.

“The disparate impact rule and the AFFH rule under the current administration are a double whammy, an attack on fair housing from all sides,” says Anna Bailey, policy analyst at the Center on Budget and Policy Priorities, a progressive think tank. “First, the disparate impact rule raises the bar, making it so much harder to prove a disparate impact claim and challenge those discriminatory policies. While the AFFH, on the other hand, lowers the bar that communities and grantees need to reach in order to show that they’re pursuing fair housing.”

Kristen Clarke, president and executive director of the Lawyers’ Committee for Civil Rights Under Law, echoed the concerns of many fair housing advocates. “These issues take on particular urgency given President Trump’s recent attacks on fair housing principles and rejection of racial and socio-economically integrated communities.”

In disparate impact cases, plaintiffs aren’t citing an explicit discriminatory policy, like an apartment building that forbids children. Instead, they’re pointing to facially neutral policies with a discriminatory effect: an apartment building with a cap on bedroom occupancy, for example. While disparate impact has been established by case law stretching back decades, the U.S.Supreme Court only formally recognized that implicit bias is unconstitutional in 2015, in a landmark decision by former Justice Anthony Kennedy.

Under the new disparate impact rule, plaintiffs must meet a five-point evidentiary suit to bring forward a discrimination case under the Fair Housing Act. That’s a bigger lift than under the Obama-era 2013 rule, which set a three-part, burden-shifting test (plaintiff brings an allegation, defendant counters, plaintiff responds). Instead, under the new standard, plaintiffs must demonstrate prima facie how a policy discriminates against them — before any discovery process can take place in litigation. While plaintiffs must meet a much higher burden of proof under the new rule, defendants need only demonstrate that a policy is valid (as opposed to being necessary). “It creates a problem of asymmetrical information, where it requires plaintiffs to have information that it doesn’t make sense for them to know,” Bailey says.

The disparate impact rule also says that costs for defendants can be a mitigating factor: It falls on plaintiffs to prove that there’s an equally good policy alternative that does not have the same discriminatory effect — and also does not impose any new costs for the defendant.

But the Trump administration stepped back from one of its boldest proposals. A provision in the draft rule on disparate impact — a guideline that would have let property owners and mortgage lenders off the hook for third-party algorithms that produce unequal results for credit risk, interest rates and other standards — did not make the final cut. If it had, that provision would have been among the first of any federal policies to address fairness in automated decision-making.

Consequences of the new disparate impact rule could fall particularly hard on people with disabilities, whofile the most fair housing suits. Clarke says that the new rule runs against the logic of Kennedy’s disparate impact decision, making it harder for people who feel that they have suffered due to unstated discrimination to go to courts for relief. “Because this new rule erects nearly insurmountable barriers to disparate impact claims, those tangible benefits of the disparate impact framework will be lost if courts defer to HUD’s deeply problematic and unfounded interpretation with potentially disastrous consequences for Black tenants and homebuyers,” she says.

If the disparate impact rule concerns individuals and courts, then the AFFH rule governs states and systems. Under the Federal Housing Act, states and localities can’t use federal housing funds in a way that contributes to segregation — for example, by consigning affordable housing tax credits to highly segregated pockets of poverty.

President Donald Trump took a personal interest in reversing the federal rule on segregation. While the administration kickstarted the process for revising the Obama-era AFFH rule back in 2017, by June of this year, the president had declared that the rule was an effort to “abolish the suburbs” and began talking about scrapping the rule altogether. The following month, HUDannounced it was rescinding the AFFH rule, without going through the federal rule-making process.

While the Federal Housing Act still requires communities that receive federal housing dollars to ensure that they are not contributing to patterns of discrimination, the rule replacing AFFH sets a voluntary standard for compliance (a “general commitment to use the funds in good faith and accompanied similar certifications not to violate various civil rights statutes”).Multiplehousingassociations that receive federal funding wrote to Housing Secretary Ben Carson to object to the more lax standard, even though they are subject to less strict regulation under the new dispensation.

“The termination of the AFFH Rule once again demonstrates that the administration has no regard for civil rights laws like the Fair Housing Act and continues to dismantle long-standing anti-discrimination protections designed to protect housing choices of people of color and Black households, in particular,” Clarke says.

According to the National Fair Housing Alliance, housing discrimination complaintsrose by 8% in 2018 over the previous year — the highest levels since the group began tracking complaints in 1995.

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