The NAACP Legal Defense & Educational Fund, Inc. (LDF) today applauds the issuance of final regulations by the Department of Housing and Urban Development (HUD) that endorse use of the “disparate impact” standard under the Fair Housing Act of 1968.

“We are thrilled about HUD’s action today.  Disparate impact is a powerful tool for challenging the structural and institutional inequalities that persist in our housing and financial markets.  The regulation comes at a critical time as African-American families struggle to overcome the devastating effects of the recession on homeownership and wealth,” said Sherrilyn Ifill, President and Director-Counsel of LDF.    

“Disparate impact” occurs when government or private actors unjustifiably pursue practices that have a disproportionately harmful effect on communities of color and other groups protected by the Fair Housing Act.  Since the Supreme Court’s decision in Griggs v. Duke Power Co., 401 U.S. 424 (1971), this method of proving discrimination has been recognized by courts in a variety of civil rights cases, including those addressing employment discrimination, unequal educational opportunities and environmental racism. 

In the housing context, disparate impact is a powerful tool for promoting fair housing opportunity and meaningful housing integration.  This standard is often used in challenging discrimination in mortgage lending, the provision of homeowners’ insurance, exclusionary zoning and admissions, redevelopment or demolition practices in public housing.

Although disparate impact doctrine is focused primarily on harmful outcomes, it can also help root out intentional discrimination, which is often more difficult to prove.  Importantly, the HUD regulations also reaffirm that the Fair Housing Act bans practices which create or perpetuate racially segregated housing.   

LDF relied on the disparate impact standard in a recent case, Greater New Orleans Fair Housing Action Center et al. v. U.S. Department of Housing & Urban Development et al. LDF alleged that HUD’s “Road Home” program, which sought to assist homeowners after Hurricane Katrina, discriminated against African-American homeowners by awarding grants based on the lesser of the pre-storm value of the home or the cost of rebuilding.  Because property values were lower in African-American communities, African-American homeowners were awarded insufficient grants for rebuilding whereas white homeowners with higher value homes were likely to receive grants allowing them to rebuild.  The case settled. 

For decades, the availability of disparate impact under the Fair Housing Act has been recognized by courts, repeatedly endorsed as federal policy and utilized by HUD and other agencies in enforcement actions.  HUD issued a proposed regulation in November, 2011, asking for comments.  LDF was one of many civil rights groups who submitted comments in strong support of the regulations, noting that the “importance of the disparate impact standard to effective and vigorous fair housing enforcement cannot be overstated.”    

Leslie Proll, Director of LDF’s Washington Office, said:  “Issuance of the HUD regulation has long been a top priority for LDF.  The federal government’s official imprimatur will reinforce the courts’ and federal agencies’ longstanding and consistent interpretation of the Fair Housing Act.  This regulation will promote stronger fair housing enforcement across communities and in all aspects of the housing market.  This is a very good day for fair housing.”