Attorney General Becerra: Federal Reversal on Fair Housing Regulations Will Make American Communities More Vulnerable to Segregation and Inequality

SACRAMENTO – California Attorney General Xavier Becerra today co-led a coalition of attorneys general in opposition to a new proposal that would weaken federal protections intended to safeguard against housing discrimination. Under the proposed rule, the U.S. Department of Housing and Urban Development (HUD) would make it far more difficult to initiate a disparate impact claim under the U.S. Fair Housing Act (FHA) and, as a result, make American communities more vulnerable to discriminatory housing policies. In a comment letter, the attorneys general urge HUD to rescind the proposal and leave the existing, court-approved system in place.

“Fighting to protect our civil rights can already be a monumental task – we don’t need a new rule that makes it harder to challenge policies that result in segregation and inequality,” said Attorney General Becerra. “If we’re to effectively combat structural and systemic housing discrimination, we must work together. That’s why our coalition is calling on HUD to stand with us and keep the existing federal fair housing protections in place.”

Breaking with decades of legal precedent, the proposed rule imposes an unreasonable five-element test for federal disparate impact claims that unnecessarily favors defendants in housing discrimination cases and establishes an overly heavy burden on claimants and plaintiffs. In other words, the test makes it extremely difficult to make legal claims under FHA to address inequitable housing policies. For instance, the proposal effectively forces a plaintiff to describe how a defendant might justify practices that may have a discriminatory effect and then preemptively argue why the supposed reason is insufficient—all without ever actually having heard a justification from the defendant. This approach would require plaintiffs to essentially argue hypotheticals against themselves and allow a defendant to prepare a defense against a claim without ever actually having asserted a purported reason for a particular policy in court.

Moreover, HUD’s proposal also creates a number of exemptions that would enable a defendant to obtain a dismissal of a disparate impact claim in the pleading stage based on technicalities. For example, under the new HUD proposal, a defendant could claim they were not at fault for a policy that results in discrimination because the policy relies on a computer model created or maintained by a third party. In addition, unlike the existing system, the proposed rule does not allow for the plaintiff to demonstrate how a challenged policy or practice’s objectives can be achieved through less discriminatory means before facing a motion to dismiss, and therefore fails to provide a clear opportunity to mitigate harm.

Unlike the current system, HUD’s proposed regulations fail to keep up with existing laws in California that provide strong protections against housing discrimination, including protections for disparate impact policies that may appear to be neutral but are actually discriminatory in effect. For instance, under California’s Fair Employment and Housing Act, a plaintiff can make a disparate impact claim if they are able to demonstrate that a policy had the effect of discriminating against a person on the basis of a protected class under state law. Protected classes under California law include: race, national origin, religion, age, disability, sex, gender, sexual orientation, veteran status, marital status, genetic information, and medical condition. There are also reasonable mechanisms in place for defendants to defeat these claims by either disproving the allegation or by establishing that the practice was consistent with a business necessity.

Attorney General Becerra is committed to fighting against discriminatory housing policies and upholding protections for those living in California and throughout the country. Last year, Attorney General Becerra called on HUD to maintain the existing standards for disparate impact claims. Last month, the Attorney General highlighted the harmful effects of discriminatory lending practices in an amicus brief supporting the City of Oakland in a case against Wells Fargo. In March and October of 2018, the California Department of Justice submitted comments opposing changes proposed by the Trump Administration that would revoke key tools used to overcome entrenched patterns of residential segregation and foster inclusive communities. In July of 2019, Attorney General Becerra urged HUD to withdraw a proposed rule on housing assistance eligibility, which would risk eviction for tens of thousands of Californians. Attorney General Becerra also joined a coalition of attorneys general seeking to protect federal rules allowing equal and consistent access to shelters for transgender and gender nonconforming individuals.

In submitting the comment letter, Attorney General Becerra is joined by the attorneys general of New York, North Carolina, Colorado, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

A copy of the comment letter is available here.