The Fair Housing Act was signed into law in 1968 by President Lyndon B. Johnson. It was designed to protect individuals from discrimination when they are renting, buying, or securing financing for housing. It specifically prohibits discrimination based on race, color, national origin, religion, sex, disability and the presence of children.
What is a Disparate Impact Claim?
The underlying issue that the Supreme Court had to address was whether the Department’s allocations had disproportionally and adversely affected a minority group, even if the Department had no intentions of causing such an effect. The disproportionate effect of a policy on a minority group represents a “disparate impact.” In its ruling on June 25, 2015, the Court ruled in favor of ICP and formally recognized the availability of disparate impact claims under the Fair Housing Act.
Businesses, governmental entities and individuals can be the target of a disparate impact claim even if they did not intend to discriminate, and this can result in expensive litigation and reputational harm. Many of the routine activities of municipalities, zoning boards, homeowners associations, and developers could result in a disparate impact, creating exposure to an FHA claim. Avoiding such liability and creating FHA-compliant business plans and zoning regimes involves a difficult balancing act because of the extensive reach of disparate impact liability.
1 See Texas Department of Housing and Community Affairs et al. v. Inclusive Communities Project, Inc., et al., 135 S.Ct. 2507 (June 25, 2015)