TRENTON – Attorney General Gurbir S. Grewal yesterday joined a letter opposing the Trump Administration’s proposal to repeal current rules that provide critical protections against housing discrimination.

The U.S. Department of Housing and Urban Development (HUD) announced earlier this summer that it is seeking comments on whether to reconsider rules recognizing that the Fair Housing Act (FHA) provides for “disparate impact liability.” Disparate impact liability allows individuals to demonstrate housing discrimination even without proof of biased intent, based on significant disparities in treatment of minorities or other groups.

As the U.S. Supreme Court has put it, disparate impact liability “permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification …. In this way disparate-impact liability may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.” Yesterday’s letter – on behalf of New Jersey, North Carolina, and 15 other states – explains both that the law is clear the FHA provides for this kind of liability, and that such liability is critical for state civil rights enforcement efforts.

“The federal government’s plan to roll back necessary protections against housing discrimination is misguided and illegal,” explained Attorney General Grewal. “Given the long history of housing discrimination in our nation, we should not be making it easier for individuals to discriminate so long as they hide their intent. The U.S. Supreme Court has already said that the Fair Housing Act protects individuals based on these patterns of unfair treatment, and the federal government should stay true to that promise. I will not stand by quietly in the face of this assault on our civil rights.”

As the letter to HUD notes, the U.S. Supreme Court, in Texas Department of Housing & Community Affairs v. Inclusive Communities, Inc., recognized that the FHA “must be construed to encompass disparate-impact claims.” As the letter explains, HUD “has no power to alter” the Supreme Court’s determination.

The letter also explains why HUD’s proposal will have drastic consequences across states. “During the boom of the subprime market in the last decade,” the letter explains, “African-American and other minority borrowers were more likely to receive subprime loans, pay higher rates, and incur more charges than white borrowers-even after controlling for income and neighborhood characteristics.” The letter adds, “Even today, borrowers of color are substantially more likely than white borrowers to be denied conventional loans.” Disparate impact liability is necessary to put a stop to that.

As the Attorneys General further explain, their offices have significant experience in addressing housing discrimination. After all, the letter states, “Enforcement actions under the FHA and similar state laws based on disparate impact theories are a critical component of states’ efforts to combat discrimination and ensure greater equality of opportunity.” The current HUD rule, the Attorneys General conclude, “strikes the proper balance between promoting an integrated society and protecting housing providers from unmeritorious discrimination claims.”

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