Disparate Impact Media Articles
Disparate Impact Videos
Download Disparate Impact Media Kit (PDF)
Download recording of January 15, 2015 media roundtable (MP3)
Disparate Impact is a legal doctrine under the Fair Housing Act which states that a policy may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability when there is no legitimate, non-discriminatory business need for the policy. In a disparate impact case, a person can challenge practices that have a “disproportionately adverse effect” on those protected by the Fair Housing Act and are “otherwise unjustified by a legitimate rationale.”
On January 21st, 2015, the U.S. Supreme Court heard oral arguments in a case challenging whether disparate impact will remain a safeguard against discrimination in housing regardless of intent. On June 25, 2015, the Supreme Court ruled, in a decided victory for civil rights groups and consumers across America, that “[d]isparate impact claims are cognizable under the Fair Housing Act” after considering the Act’s “results-oriented language, the Court’s interpretation of similar language in title VII and the ADEA, Congress’ ratification of disparate-impact claims in 1988 against the backdrop of the unanimous view of nine Courts of Appeals, and the statutory purpose.” The Court stated:
“Much progress remains to be made in our Nation’s continuing struggle against racial isolation…The FHA must play an important part in avoiding the Kerner Commission’s grim prophecy that ‘[o]ur Nation is moving toward two societies, one black, one white-separate and unequal.’…The Court acknowledges the Fair Housing Act’s continuing role in moving the Nation toward a more integrated society.”
Federal appellate courts have consistently ruled in favor of applying the disparate impact standard. Indeed 11 appellate courts have found that disparate impact is a legitimate claim under the Fair Housing Act. Disparate impact has been used to expand housing opportunities for persons with disabilities, families with children and others protected by the Fair Housing Act. Without it, municipalities can more easily pass zoning ordinances that prohibit people with disabilities from modifying their homes to make them accessible; condo associations can more easily establish rules that prevent people with disabilities from making reasonable modifications to their homes; landlords can more easily evict victims of domestic violence; lenders can again employ policies and practices that steer borrowers with good credit into higher cost, unsustainable mortgages; and apartment managers can establish rules that make housing excessively and prohibitively expensive for families with children.
The Supreme Court’s decision also upholds the US Department of Housing and Urban Development’s disparate impact rule which establishes a burden-shifting framework for addressing disparate impact claims. HUD issued its rule in February, 2013, to establish a standard by which disparate impact cases would be adjudicated.
The Court found that the Fair Housing Act’s “results-oriented” language - “otherwise make unavailable”, under §804(a) and “discriminate against any person in” making certain real-estate transactions “because of race” or other protected characteristic, under §805(a) - address the “consequences of an action rather than the actor’s intent.” The language of the Act together with legal precedents decided by the Supreme Court related to Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 made it clear to the Court that there is “strong support for the conclusion that the FHA encompasses disparate-impact claims.” The Court, in its wisdom, recognized that discrimination is not always overt and that disparate impact is an important tool to permit “plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.”
The Court recognized that disparate impact is not a new standard but a long-established protection that millions have come to rely upon in order to access housing opportunities. Indeed, the Court was loathe to go against the “longstanding judicial interpretation of the FHA to encompass disparate-impact claims and congressional reaffirmation of that result” commenting that the disparate impact protection has been in place for over 4 decades with no “dire consequences.” The Fair Housing Act was passed not just to address individual acts of discrimination but to also eradicate systemic practices that create and perpetuate residential segregation and racial isolation in America. Realizing the full purpose of the Fair Housing Act is not possible without disparate impact. Without disparate impact, our country is indeed doomed to the gripping conclusion reached by the Kerner Commission. The Court’s opinion not only lauds the Fair Housing Act’s lofty purpose but highlights the need for the continuation of the disparate impact standard since the Fair Housing Act’s purpose has not been fully achieved. In the Court’s words, “[m]uch progress remains to be made in our Nation’s continuing struggle against racial isolation.”
Civil rights advocates will be able to continue using this critically important tool to advance housing opportunities for those most vulnerable in our society.
To read NFHA’s statement on this historical decision, click here.
To read NFHA’s blog about this case for the SCOTUSBLOG Symposium, click here.
Why Does It Matter?
Disparate impact theory safeguards the right to a fair shot for everyone. Where you live determines where you work and how you get there, your access to healthcare, and the school your child attends. Unfortunately, policies and practices still exist that – intentionally or unintentionally - keep some people out of housing they can afford simply because of who they are.
While we have made great strides in advancing fairness in the housing sector, segregation persists and there is still more work to be done. Everyone benefits from a housing market free from discrimination where the full participation of all Americans is possible.
Additionally, from a business standpoint the disparate impact theory helps us maintain open markets free from discrimination – a critical component to the prosperity of America’s future. Discrimination disrupts our economy, causing inefficiency and instability by constraining the full economic participation of all hard-working Americans.
Examples of Disparate Impact
- An apartment complex only allows people with full-time jobs. This bars disabled veterans and other people with disabilities who may not be able to work full-time, even though they can afford the apartment. The complex could instead consider all income to assess someone’s ability to afford rent.
- A city decides to prohibit all housing that would be affordable to working-class people, and that has the effect of excluding most or all people of color in that region. If the city cannot show a valid reason for its policy, or if a more fair and effective alternative is available, then the policy would have to be set aside under the disparate impact approach.
- A lender has a policy of allowing its loan officers to overcharge consumers at the loan officer's discretion. The result is that women are charged higher prices than their male counterparts—even though both have the same credit profiles. In a case like this, the lender would have to abandon the discretionary pricing policy and take steps to insure that women are not over-charged for lending products and services.
A coalition of organizations in support of protecting fair housing in in the disparate impact case held a joint media roundtable on Wednesday, January 14. Representatives from the NAACP Legal Defense Fund, the National Fair Housing Alliance and the American Civil Liberties Union spoke about the importance of disparate impact as a civil rights safeguard in the housing market.
- Sherrilyn Ifill, President and Director-Counsel of the NAACP Legal Defense & Educational Fund, Inc.
- John Relman, Managing Partner, Relman, Dane & Colfax, on behalf of the National Fair Housing Alliance
- Dennis Parker, Director of Racial Justice Program, American Civil Liberties Union
Download Media Roundtable Audio (MP3)