HUD Continues to Make Changes Affecting Housing; “Change is Constant,” Opines TenantScreeningUSA.com

Disparate impact is a legal theory that HUD has used in an attempt to successfully implement all aspects of the Fair Housing Act (FHA) of 1968.  However the current administration is attempting to pull back the use of disparate impact theory as a legal enforcement tool.

From Curbed.com (Jan 05, 18):

Fresh off a failed attempt to delay a rule designed to give Section 8 housing voucher recipients more choice in where to live, Ben Carson and the U.S. Department of Housing and Urban Development (HUD) announced Friday that it’s delaying another Obama-era anti-segregation measure: the Affirmatively Furthering Fair Housing (AFFH) rule.

The AFFH rule, established in 2015, aims to realize aspects of the Fair Housing Act (FHA) of 1968 that never came to be. The FHA barred racial discrimination in housing, but not until a 2015 U.S. Supreme Court ruling did the ban include “disparate impact”: policies that are discriminatory without necessarily stating racial discrimination as an intent. (1)

Attempts have been made over the years to legally and socially desegregate housing.  During the previous administration HUD utilized the legal theory of disparate impact, a theory suggesting defacto segregation may exist in housing and landlords may preclude certain classes, specifically African-American and Hispanic groups, from fair and equal housing opportunity.

From legaldictionary.net (no date given)

Disparate impact concerns policies and procedures – in employment, housing, education, and other issues – which are not necessarily meant to be discriminatory, but which end up ultimately having an “adverse effect” on a particular class of people, based on such traits as their race, color, or religion. (2)

Adam Almeida, President and CEO of TenantScreeningUSA.com states:  “As administrations change so to does the direction policy may take.  Change is especially true with a shift in political ideology.  Leadership at HUD has changed course and is potentially moving away from the use of disparate impact as a legal course of action.”

Under new guidance from HUD the AFFH rule will be delayed in implementation.

Almeida states:  “Ultimately landlords and property managers should be aware of what is changing with the Department of Housing and Urban Development as it could eventually affect non-governmental entities and, subsequently, tenant screening.”

Tenant screening is a critical tool utilized by landlords and property managers to vet rental applicants.

Ultimately, politicians cite inconsistencies between Supreme Court findings and disparate impact and have pushed HUD toward recent changes.

From BankingJournal.aba.com (Nov. 15, 18):

The Department of Housing and Urban Development’s rule implementing the Fair Housing Act discriminatory effects standard is inconsistent with current Supreme Court precedents on disparate impact theory and could be negatively affecting HUD’s housing goals, a group of House Republicans said in a letter to HUD Secretary Ben Carson today.

“Local governments, commercial and residential lenders, issuers, developers, and other mortgage industry service providers are less inclined to participate in housing projects because HUD’s disparate impact rule does not comply with the Supreme Court’s rulings,” the lawmakers wrote. “This inconsistency will reduce housing production, which in turn will increase housing expenses for many Americans, including those who can least afford it.”(3)

Almeida concludes:  “The key takeaway is that change is constant.  Whether it is a change in policy or in governance ideology change is constant.  A best practice remains that landlords and/or property managers work with a well-qualified third-party tenant screening agency in order to remain complaint with any potential change affecting tenant screening.”

TenantScreeningUSA.com is a third-party background screening company that provides tenant checks to landlords and property managers for all sizes and types of rental complexes.  From the single-unit to the large community, TenantScreeningUSA.com has the ability to customize a tenant screening package specific to a managers unique requirements.

Notes:

(1)  curbed.com/2018/1/5/16854218/hud-fair-housing-delay-obama

(2)  legaldictionary.net/disparate-impact/

(3)  bankingjournal.aba.com/2017/11/gop-lawmakers-huds-disparate-impact-rule-inconsistent-with-supreme-court-precedent/

 

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