HUD Final Rule on Disparate Impact under the Fair Housing Act

On February 8, 2013, the Department of Housing and Urban Development (“HUD” or the “Department”) finalized its controversial discriminatory effects rule (the “final rule” or “discriminatory effects rule”), thus formalizing the Department’s “long held recognition” that a plaintiff or charging party can establish a Fair Housing Act (“FHA” or the “Act”) violation using the “disparate impact” theory of liability. Although HUD emphasized that the final rule merely codifies preexisting standards, in many respects it differs from applicable Supreme Court precedent.

More problematic from a practical perspective is that the final rule and its accompanying preamble contain numerous ambiguities and unresolved issues. Unfortunately, this will make complying with and defending claims under the final rule particularly tedious.

This alert describes the history of the final rule, summarizes its provisions and discusses the compliance and litigation challenges presented by HUD’s formulation of the effects test in both the final rule and its preamble.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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