President Biden’s Memorandum on Housing Discrimination

President Biden’s Memorandum on Housing Discrimination

Client Alerts

Contributors

On Tuesday, January 26, President Biden signed a memorandum on discriminatory housing practices and policies. The memorandum is one of a series of recent executive actions focused on racial equity, representing the Administration’s continued effort to address systemic racism across multiple issue areas and government agencies.

The memorandum is directed at the secretary of the U.S. Department of Housing and Urban Development (HUD) and outlines a broad objective to address bias and discrimination in rental housing and home-buying. The order provides a historical overview of U.S. government policies that it says have exacerbated racial inequalities and how those inequalities continue to “permeate[] land-use patterns in most U.S. cities and virtually all aspects of housing markets.” The memorandum is not, however, limited to racial discrimination; it also references discrimination based on sexual orientation, gender identity and disability.

The order specifically directs the secretary of HUD to examine the effects of two regulatory actions taken during the Trump Administration: the rule titled “Preserving Community and Neighborhood Choice,” published August 7, 2020, and the rule titled “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard,” published September 24, 2020.

  • The August 7 rule repealed the Affirmatively Furthering Fair Housing (AFFH) rule promulgated under the Obama Administration. The AFFH rule required that jurisdictions receiving federal housing funds assess patterns of housing discrimination and design a plan to address their findings. HUD suspended enforcement of the AFFH rule in 2018, with the repeal following in August 2020.
  • The September 24 rule amended an Obama-era rule on the disparate impact standard in the context of proving housing discrimination. Under the disparate impact standard, a facially neutral policy can be found discriminatory if it disparately impacts people in a protected class, even without an intent to discriminate. For example, the disparate impact standard has been used to prevent the use of criminal background checks by housing providers when such checks result in a disparate impact on minority groups. The Trump Administration’s rule changed the burden-shifting framework for disparate impact claims, making it more difficult for plaintiffs to prove discrimination. That rule also provided a series of affirmative defenses against liability, including some that critics argued eliminated potential claims regarding algorithmic bias. The Trump Administration rule was only briefly in effect, as it was enjoined by a federal court in October 2020 pending lawsuits challenging its implementation.

While President Biden’s housing memorandum does not explicitly undo either of these Trump-era rules, it lays the groundwork for HUD to replace them, which we expect to occur. The memorandum directs the secretary of HUD to examine the effects of both rules and, “[b]ased on that examination,” to “take any necessary steps … to implement the Fair Housing Act’s requirements that HUD administer its programs in a manner that affirmatively furthers fair housing and HUD’s overall duty to administer the Act including by preventing practices with an unjustified discriminatory effect.” Acting HUD Secretary Matthew E. Ammon welcomed the executive action, stating in a press release, “With this executive order, President Biden is taking meaningful action to advance racial equity in housing and expand opportunity for all. HUD looks forward to working closely with the President and his administration to expand equitable access to housing for millions of Americans.”

Also on January 26, President Biden took a series of other equity and inclusion-related actions to address the use of private prisons, racism against Asian Americans and Pacific Islanders, and enhanced coordination with American Indian and Alaska Native Tribal Nations.

Contributors