Fair Housing “Final Rule”

Implementation of the Fair Housing Act’s Discriminatory Effects Standard: Final Rule was issued in the February 15, 2013 Federal Register.  The purpose of the final rule was to “formalize the national standard for determining whether a housing practice violates the Fair Housing Act”.  The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, handicap, familial status or national origin.

The final rule formally establishes a three-part test for determining whether a housing practice has a discriminatory effect:

1. The person charging discrimination has the burden of proving its prima facie (first appearance) case.  The “charging party” must present all the essential facts showing that a practice results in, or could be predicted to result in, a discriminatory effect based on a protected characteristic.
2. If the charging party proves a prima facie case, the burden of proof shifts to the respondent (entity being accused) to prove that the practice is necessary to achieve a legitimate, nondiscriminatory interest.
3. If the respondent satisfies his/her burden, then the charging party can still establish liability if s/he proves that the “legitimate, nondiscriminatory interest” could be achieved using a different practice with a less discriminatory effect.

The rule doesn’t change the law.  But it formalizes a clear, consistent, nationwide standard for bring lawsuits for discriminatory effects under the Fair Housing Act.  It does not add any additional cost to housing providers.

The rule will simplify compliance with the Fair Housing Act’s discriminatory effects standard, and will decrease the number of lawsuits by clearly allocating the burdens of proof, and how those burdens must  be met.

HUD Secretary Shaun Donovan stated: “This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination.”