In a significant development, the Department of Housing and Urban Development (HUD) has recently reinstated the Discriminatory Effects Rule. So what does that mean for property management professionals? In this article, we will delve into the details of HUD’s reinstatement and explore how we got here, as well as what it means moving forward.
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This crucial regulation, designed to combat housing discrimination, holds immense importance for those working in property management, as it establishes guidelines to prevent policies and practices that may unintentionally result in discrimination against certain protected groups. Let’s consider four common questions that have arisen since HUD’s announcement.
What is the discriminatory effects rule?
The discriminatory effect rule is a regulation that tries to explain what disparate impact means when someone is investigating or is attempting to prove a violation of the Fair Housing Act through the disparate impact method of proof. This method has to do with when a neutral policy is applied; it has a greater negative effect on one or more of the protected categories.
Why and when was it rescinded?
There is quite a bit of history and politics surrounding the disparate impact and the discriminatory effects rule. Essentially the discriminatory effects rule was adopted by HUD in 2013. Since then, we have had changes in administration, and as a result, HUD updated or changed the rules to be more favorable for landlords in 2019 based on the existing administration’s viewpoint. Fast forward to today, and our current administration sees HUD returning to the original set of rules established in 2013.
Why was it reinstated?
Since the proposal of changes in 2019, there has been some litigation filed by a number of advocacy organizations. Along with that, a federal judge actually stopped the effective date for the 2019 changes. There was a legal basis for questioning whether the 2019 rules changed the analysis of proof and whether they were in line with the original court case that set the precedent. As a result of this, HUD has decided to return to the 2013 rules as they are closer in line with that precedent.
What is the bottom line for property management?
We are dealing with an extremely complicated area of the law. Clearly, no one ever wants to find themselves on the wrong end of a disparate impact claim. That being said, all property management companies need to pay careful attention to both their occupancy policies and their criminal history screening policies, as these are the two most commonly challenged. You need to be confident that you can defend your policies should they ever be challenged.
The reinstatement of HUD’s Discriminatory Effects Rule marks a significant step forward in the ongoing fight against housing discrimination. Property management professionals now have a renewed responsibility to ensure their policies and practices comply with the guidelines set forth by this rule. By understanding the nuances of disparate impact and taking proactive measures to eliminate any unintentional discriminatory effects, property managers can create environments that promote equal access to housing opportunities for all individuals.
As we move forward, it is imperative for property management professionals to stay informed about fair housing regulations and engage in ongoing training. By doing so, you can help avoid a potential complaint and maintain compliance.
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