WASHINGTON – Feb. 13, 2013 – The Department of Housing and Urban Development (HUD) has issued a disparate-impact rule that gives it a new tool to fight housing discrimination. It “will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination,” says HUD Secretary Shaun Donovan.
It’s a tool courts have used for years – a statistical analysis. Advocates fighting housing discrimination can now compile historical data and use it to prove that a lender or city rule has had an adverse effect on a protected class, even if it’s an unintended effect. Statistical analysis is often used to show that a rule appearing neutral on the surface has actually harmed a protected class of homebuyers.
In the past, courts have looked at neutral rules with an eye toward whether they discriminate, and also if they serve a legitimate purpose. If they do serve a legitimate purpose, they then look to see if there’s another way to achieve the same goals that discriminates less.
The end result: Someone can claim a violation of fair-housing laws without necessarily proving that cities or lenders intended the discrimination.
Civil rights group pushed the new rule, arguing that it will make it easier to combat housing discrimination. Phillip Tegeler’s Huffington Post column also says it suggests that HUD could be focusing more intently on housing discrimination for the next four years.
Financial groups, however, oppose the new rule, saying it will cost consumers more.
Prior to the rule being adopted, Insurance Information Institute President Robert Hartwig told The Wall Street Journal, “There’s no question that the rule, if adopted in its current form, will raise the cost of homeowners insurance for potentially millions of home buyers … at the worst possible time for them, for the economy, and for the still-fragile housing market.”
Source: Wall Street Journal (02/08/13) Timiraos, Nick; Scism, Leslie; Huffington Post (02/12/13), Phillip Tegeler
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