Supreme Court upholds use of “disparate impact” in fair housing claims

July 1, 2015

On June 24, in a 5-4 decision, the United States Supreme Court upheld the allowable use of “disparate impact” for discrimination claims under the Fair Housing Act. In Texas Department of Housing and Community Affairs v. Inclusive Communities Project, the Court sided with the lower court and found that the Fair Housing Act allows for discrimination suits based on disparate impact, regardless of whether the discriminatory act was intentional or unintentional. The Inclusive Communities Project argued that the state of Texas disproportionately allocated low-income housing tax credit deals in predominately minority communities versus majority white communities and thus was discriminatory.

Due to the Supreme Court’s decision, the U.S. Department of Housing and Urban Development (HUD) will likely move forward with finalizing their Affirmatively Furthering Fair Housing (AFFH) proposed rule that was published in 2013 and the Assessment of Fair Housing (AFH) toolkit from 2014. HUD proposed a new structure and process whereby HUD would provide state and local government grant recipients (including CDBG and HOME) with guidance, data and also an assessment template (toolkit) by which to complete an assessment of fair housing (AFH). This assessment would then be linked to the state and local governments consolidated housing and community development plans to assess investments and related policies to affirmatively further fair housing.

To view more information on the AFFH proposed rule and AFH toolkit click here. To view NACo comments on the AFH toolkit click here.

For more information, contact NACo’s Associate Legislative Director Daria Daniel.

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