Disparate Impact
A theory of Fair Housing Act liability where a housing policy that is facially neutral nevertheless causes a disproportionate adverse effect on a protected class without a legally sufficient justification. Recognized under 24 CFR Part 100, Subpart B and Texas Dept. of Housing v. Inclusive Communities Project (2015).
Also known as: discriminatory effect, adverse impact, disproportionate impact
Definition
Disparate impact is a legal theory under which a facially neutral housing policy or practice violates the Fair Housing Act if it has a disproportionately adverse effect on members of a protected class and lacks sufficient justification.
Legal Recognition
The U.S. Supreme Court confirmed that disparate impact claims are cognizable under the Fair Housing Act in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015).
HUD's implementing regulation at 24 CFR § 100.500 established a burden-shifting framework:
Burden-Shifting Framework (24 CFR § 100.500)
Step 1 — Plaintiff's burden: The plaintiff must prove that a challenged practice has caused or predictably will cause a discriminatory effect on a protected class.
Step 2 — Defendant's burden: If plaintiff establishes a prima facie case, the defendant must prove that the challenged practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest.
Step 3 — Plaintiff's rebuttal: The plaintiff may still prevail by showing that the substantial, legitimate interest can be served by a practice with a less discriminatory effect.
Common Contexts
- Criminal history screening: Categorical bans on applicants with criminal records may produce disparate impact on racial minorities (HUD 2016 Guidance on Criminal History)
- Minimum income requirements: Policies requiring income 3-4x rent may disproportionately exclude voucher holders in some markets
- Occupancy restrictions: Overly restrictive occupancy policies may disproportionately affect familial status
Sources
- 24 CFR § 100.500, eCFR —
ecfr - 42 U.S.C. § 3604, Cornell LII —
cornell-lii - HUD.gov: Disparate Impact —
hud-gov
Frequently asked questions
Legal Recognition
The U.S. Supreme Court confirmed that disparate impact claims are cognizable under the Fair Housing Act in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015). HUD's implementing regulation at 24 CFR § 100.500 established a burden-shifting framework:
Burden-Shifting Framework (24 CFR § 100.500)
Step 1 — Plaintiff's burden: The plaintiff must prove that a challenged practice has caused or predictably will cause a discriminatory effect on a protected class. Step 2 — Defendant's burden: If plaintiff establishes a prima facie case, the defendant must prove that the challenged practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Step 3 — Plaintiff's rebuttal: The plaintiff may still prevail by showing that the substantial, legitimate interest can be served by a practice with a less discriminatory effect.
What is the policy rationale for Disparate Impact?
Criminal history screening: Categorical bans on applicants with criminal records may produce disparate impact on racial minorities (HUD 2016 Guidance on Criminal History) Minimum income requirements: Policies requiring income 3-4x rent may disproportionately exclude voucher holders in some markets Occupancy restrictions: Overly restrictive occupancy policies may disproportionately affect familial status
Sources
CFR § 100.500, eCFR — ecfr U.S.C. § 3604, Cornell LII — cornell-lii HUD.gov: Disparate Impact — hud-gov