HUD to Publish Final Rule Reinstating 2013 Rule on Discriminatory Effect

HUD recently released a final rule, pending publication, that recodifies the 2013 Rule regarding discriminatory effect under the Fair Housing Act and rescinds the 2020 Rule that, in part, removed the definition of discriminatory effect, made it harder to initiate a case, and altered the burden-shifting framework established by the 2013 Rule in disparate impact claims.  WBK wrote in detail about the notice of proposed rulemaking that preceded this final rule here.

The final rule recodifies the 2013 Rule in its entirety, including the 2013 Rule’s definition of discriminatory effect, stating that a practice has a discriminatory effect if it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.  Additionally, the burden of proof established under the 2013 Rule is also reinstated as follows: (1) the plaintiff proves in a prima facie showing that a challenged practice caused or predictably will cause a discriminatory effect; (2) if the plaintiff makes this prima facie showing, the defendant must prove that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the defendant; and (3) if the defendant meets that burden, plaintiff may still prevail by proving that substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice with a less discriminatory effect.

The final rule goes into effect 30 days after publication in the Federal Register.