Challenge to HUD fair housing rule denied

Courts HUD FHA U.S. Supreme Court

On September 19, the U.S. District Court for the District of Columbia denied a motion for summary judgment from the National Association of Mutual Insurance Companies arguing that the Department of Housing and Urban Development’s disparate-impact rule conflicts with the limits of the Fair Housing Act as interpreted at the Supreme Court. The rule, promulgated in 2013 and reinstated under the Biden administration, a policy is unlawful if it has a “discriminatory effect” on a protected class and was not necessary to achieve a “substantial, legitimate, nondiscriminatory” interest or if there is a less discriminatory alternative. Judge Richard J. Leon held that the rule does not exceed limitations on disparate-impact liability under the FHA placed by the Supreme Court in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015) where those limitations avoid potential constitutional issues and prevent the Act from forcing housing authorities to reorder their legitimate priorities.