Statistically Speaking: Restrictive Changes to Fair Housing Act Disparate Impact Liability

Disparate impact liability, a theory for pleading discrimination allegations, has been an important tool in the battle for housing equity. Disparate impact claims, however, have undergone drastic changes since their inception in 1971. Most recently, the Department of Housing and Urban Development issued a final rule amending the pleading requirements for litigants alleging disparate impact housing claims. The new rule threatens to undermine the development of disparate impact claims under the Fair Housing Act (FHA) of 1968, which gives plaintiffs access to relief, specifically in cases of lending discrimination. This Note analyzes the rule in light of a seminal 2015 U.S. Supreme Court decision, Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., which recognized disparate impact claims under the FHA. Ultimately, an FHA disparate impact rule should balance the need for plaintiffs to reach the discovery phase of litigation to uncover discriminatory animus versus defendants’ ability to justify policies with legitimate purposes.