The new proposed HUD regulations concerning “disparate impact” and the Fair Housing Act (FHA) have received much attention in the housing management and lending arenas – including an entry by your humble blog editor last week. A Fair Housing Defense Blog reader asked for my opinion about the impact of the proposed new rules. 

So, here goes. Professional apartment ownership, lenders, and management want to follow the FHA. We work every day to get it right. Discrimination has no part in our business. We want to fill all our units. We want our residents to renew their leases with us.  We want to provide loans to all qualified buyers. 

I am a defense lawyer. I defend those accused of discrimination. As such, I always would prefer clarity and certainty as to the circumstances under which my clients might be held liable (or the situations in which we would be shielded from liability).  Unfortunately, HUD’s preamble to the new rules really did not provide the type of detail I would have wanted to see.  Am I going to be forced into defending against practices that my clients developed without any discriminatory intent whatsoever? Could be. And that will be expensive and time consuming.

Indeed, HUD even declined to provide guidelines as to a defining percentage of what is an actionable different treatment between relevant protected classes. Also, just what HUD will consider to be a “substantial” business interest will need to be developed. In short, there are still many unanswered questions.

In sum, there will be more to come on this topic. Particularly if the Supreme Court decides to review the case in which the Department of Justice was asked to provide the views of the federal government. If the Court takes the case (and I think it well might), let’s hope we will get some needed guidance for the FHA regulated community.

Just A Thought.