The ability to identify the underlying “business necessity” or “public interest” will go a long way in undercutting a claim that a policy is “artificial, arbitrary and unnecessary.” And, finally, because plaintiffs will have to show that there is “an available alternative practice that has less disparate impact and serves the [entity’s] legitimate needs,” an entity subject to the FHA may wish to proactively engage in that analysis itself and modify its policies and practices if it determines that an alternative approach would serve its purposes and soften the statistically adverse impact on a protected group.In 2008, the Inclusive Communities Project, a nonprofit Texas group assisting low-income, predominantly African-American families in finding affordable housing in predominantly Caucasian, suburban neighborhoods, filed suit against the Texas Department of Housing and Community Affairs, alleging the Department’s administration of federal Low-Income Housing Credits for residential developers violated the FHA. To guard against potential disparate impact claims, affirmative steps should be taken to review, and, if necessary, make changes to, existing policies and practices. In doing so, the demographic implications of policies and practices should be considered, and, to the extent there are statistical disparities, the legitimate business and mission-driven considerations behind the policies should be documented. The Court held that the language of the FHA recognizes disparate impact, concluding that two other anti-discrimination statutes – Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act – “provide essential background and instruction.” Noting that “Congress’ use of the phrase ‘otherwise make unavailable’” in Section 804(a) of the FHA “refers to the consequences of an … On April 14, 2016 Judge Leon granted the industry's motion to amend the complaint and return the case to his court.However, on June 25, 2015, the Supreme Court upheld the application of disparate impact under the FHA in a surprise five-to-four decision in the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. The HUD proposed disparate impact rule provides a framework for establishing legal liability for facially neutral practices that have unintended discriminatory effects on classes of persons protected under the Fair Housing Act. The Supreme Court Recognizes FHA Disparate Impact Claims. Disparate impact liability under the FHA arises when a housing provider’s policy or practice that seems neutral on its face actually results in discriminatory effects on a protected class. This website uses cookies to improve your browsing experience. The Department petitioned the Supreme Court for certiorari, and the Supreme Court granted that petition.The Court held that, as with disparate impact employment claims, a plaintiff in an FHA disparate impact case must first establish a prima facie case of disparate impact discrimination. However, on June 25, 2015, the Supreme Court upheld the application of disparate impact under the FHA in a surprise five-to-four decision in the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.
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