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HUD Reinstates “Discriminatory Effects” Rule

HUD revokes the 2020 Fair Housing Act rule and brings back the 2013 policy to eliminate discrimination in the housing market.

March 17, 2023

Washington- The Department of Housing and Urban Development announced the Publication of a final rule titled “Restoring HUD’s discriminatory Effects Standard” and has submitted it to the Federal Register. The Final Rule rescinds the 2020 regulation that governed the Fair Housing Act and replaces it with the 2013 discriminatory effects rule. HUD asserts that the 2013 rule aligns more closely with the longstanding application of the Fair Housing Act in court decisions over the past 50 years. Furthermore, HUD believes that implementing the 2013 rule better serves the Act’s objective of effectively eradicating discriminatory housing practices.

Marcia L. Fudge said, “Discrimination in housing continues today, and individuals, including people of color and people with disabilities, continue to be denied equal access to rental housing and homeownership”. By introducing the new rule, we strive to make fair housing a reality for everyone in this country.

The Fair Housing Act prohibits housing discrimination based on race, color, religion, national origin, sex, familial status, and disability in housing and housing related services. With the help of the discriminatory effects doctrine, it becomes easy to address policies causing systematic inequality in housing irrespective of the fact whether they opted with discriminatory intent or not. The policies that exclude people from housing opportunities such as zoning requirements, lending and property insurance policies, and criminal record policies are challenged. Consequently, having a workable discriminatory effects standard is crucial for the Bidden-Harris administration to attain its goal of a housing market that is free from discrimination.

HUD’s 2013 rule on discriminatory effects served to officially establish the longstanding legal principles derived from case law for resolving Fair Housing Act cases under the discriminatory effects doctrine. This rule applied to both administrative cases filed with HUD and court actions initiated by private plaintiffs at the federal level. The discriminatory effects framework was pretty straightforward under the 2013 rule. It was a policy having discriminatory effects on a protected class.

The 2020 rule introduced complexities to the analysis by introducing new requirements for pleading, proof, and defenses. These additions made it more challenging to demonstrate that a policy violates the Fair Housing Act, and it also posed difficulties for entities regulated by the Act in determining the lawfulness of their own policies. Consequently, HUD has reverted back to the 2013 rule, which employs a straightforward analysis.

Once published in the Federal Register, the final rule will go into effect after 30 days. The 2020 rule never came into effect due to preliminary order staying the implementation of the 2020 rule in the Massachusetts Fair Housing Center. However, it’s been a decade since the 2013 rule has been in place. The regulated entities complying with the 2013 rule do not need to change any practices currently complying with this rule.

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Department of Housing and Urban Development. “HUD Restores “Discriminatory Effects” Rule”. HUD, March 17, 2023,
HUD Restores ‘Discriminatory Effects’ Rule | / U.S. Department of Housing and Urban Development (HUD)

Last Updated: September 20, 2021