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Civil Groups Sue HUD Secretary Carson Over New Rule Targeting Fair Housing Act

National housing advocacy and civil rights groups are suing the U.S. Department of Housing and Urban Development and HUD Secretary Ben Carson, asking a federal court to invalidate an update to department policy they say will reverse long-standing protections under the Fair Housing Act.

Secretary of Housing and Urban Development Ben Carson at Bisnow's 2019 Opportunity Zone Summit.

The National Fair Housing Alliance, the NAACP Legal Defense and Educational Fund Inc., Fair Housing Advocates of Northern California, and BLDS LLC filed a lawsuit in U.S. District Court in Connecticut on Thursday, claiming the new rule, which targets HUD's implementation of the FHA's Disparate Impact Standard, would "set the clock back a half century in the fight for fair housing in the United States." 

“Last month, the administration eviscerated 2013’s disparate impact rule and replaced it with a new rule that would make it almost impossible for victims of discrimination to challenge policies and practices that have a harmful effect on communities of color, women, people with disabilities, and families with children,” Lisa Rice, president and CEO of the NFHA, said in a press call Thursday.

At issue is “disparate impact,” which since 2013 has held landlords responsible for discriminatory practices that could have unintended impacts on members of a “protected class,” defined by the FHA as race, color, religion, national origin, sex or sexual orientation. 

The new rule, as updated by HUD under Carson “impos[es] new pleading requirements for Fair Housing Act claims alleging disparate impact, dramatically increasing plaintiffs’ evidentiary burdens while decreasing those placed on defendants,” the lawsuit claims.

Connecticut-based Open Communities Alliance and Massachusetts-based nonprofit SouthCoast Fair Housing filed a concurrent suit Thursday alongside the national groups.

"The suits ignore the plain text of controlling Supreme Court precedent and well-established doctrine of administrative law," a spokesperson for HUD told Bisnow. 

The department has already adopted this new version of the rule. It is slated to become effective Oct. 26. 

The organizations named in the lawsuit are far from the only parties concerned about the changes to the rule. In July, The New York Times reported that Bank of America, Citigroup, JPMorgan Chase and Wells Fargo joined together to ask HUD not to go forward with their plan to alter the way the rule is applied and interpreted.

“Although the banks stopped short of saying no policy change should ever be made, the request for a delay was unusual in the world of finance, where firms regularly seek fewer regulations,” the NYT wrote.

The National Association of Realtors also voiced its concern for changes to the existing rule in a July statement

“While there is debate among industry, government, and advocates as to whether additional clarity is needed with respect to disparate impact claims, there is broad consensus across the country that now is not the time to issue a regulation that could hinder further progress on addressing ongoing systemic racism in our country,” the NAR wrote.