The Department of Justice on Tuesday withdrew HUD’s appeal of the case postponing the agency’s 2020 Disparate Impact Rule that would have made it harder to bring discrimination claims under the Fair Housing Act.
By withdrawing the appeal, the preliminary injunction under the case Massachusetts Fair Housing Center v. HUD will continue to delay implementation on the rule. According to DOJ court documents, HUD, along with HUD acting secretary Matt Ammon voluntarily moved to dismiss the appeal.
The rule, initially enacted in 2013 under the Obama administration, drew hefty backlash from the housing industry after changes to the rule were made under former President Trump last year.
Criticism was especially apparent after then-HUD Secretary Ben Carson issued updated guidelines that imposed a specific, five-step approach that required regulators to prove intentional discrimination on the lender’s behalf.
Under HUD’s previous rule, lenders, landlords and other housing providers could be held liable for discrimination against protected classes even if it was not their intent to discriminate. The use of disparate impact was challenged all the way up to the U.S. Supreme Court, which upheld the rule in 2015.
Join HousingWire this February as we aim to provide listeners with a greater perspective on how race, housing and wealth intersect, and what experts are doing to close the homeownership gap. Tune into HousingWire Daily every Wednesday to listen to our new miniseries, Honest Conversations, a show that will examine the state of minority homeownership.
However, under Trump, HUD began signaling that changes could be coming. By 2017, the Trump administration, via the Department of the Treasury, called on HUD to reconsider how it used the disparate impact rule.
However, after the controversial changes were issued in 2020, a federal judge delivered a preliminary injunction in October to stop HUD from implementing the rule until the legal challenge was resolved.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition expressed support for HUD’s withdrawal of the appeal.
“This is a good first step to definitively end the Trump Administration’s attempt to undermine fair housing enforcement,” Van Tol said. “Now HUD and the Biden Administration can get to work driving discrimination out of housing. That should include fully rescinding HUD’s weakened disparate impact standard issued in 2020 and making it clear that HUD’s 2013 Disparate Impact Rule applies and will be followed.”
One week after being sworn in, President Biden signed a number of executive orders alongside a memorandum calling for HUD to reexamine the changes made to the Disparate Impact Standard. And HUD has shown signs it plans to work with the new administration in expanding racial equity past its current policies.
Following Biden’s memorandum, Ammon said the president’s executive order is a vital step toward redressing the federal government’s legacy of housing discrimination.
“Only by recognizing and acknowledging our nation’s history of housing discrimination can we begin to lift the barriers to safe, accessible, and affordable housing. With this executive order, President Biden is taking meaningful action to advance racial equity in housing and expand opportunity for all. HUD looks forward to working closely with the President and his administration to expand equitable access to housing for millions of Americans,” said Ammon.
Marcia Fudge, Biden’s nominee for secretary of HUD, vowed to end discrimination in housing should her nomination be approved by the U.S. Senate.
During her testimony to the Senate Committee on Banking, Housing and Urban Affairs on Thursday, Fudge said part of her priorities for HUD, “will require us to end discriminatory practices in the housing market, and ensure that our fair housing rules are doing what they are supposed to do: opening the door for families, especially families of color who have been systematically kept out in the cold across generations, to buy homes and punch their ticket to the middle class.”
In regards to the removal of the appeal, HUD did not immediately respond to a request for comment.