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Biden Seeks Reversal of Trump-Era Housing Discrimination Rules

Jan. 26, 2021, 10:52 PM

The Biden administration set the stage for reversing Trump-era housing policies as part of a broad series of executive orders aimed at promoting racial justice and combating discrimination.

President Joe Biden on Tuesday signed an executive order calling on the U.S. Department of Housing and Urban Development to review the Trump administration’s “Preserving Neighborhood and Community Choice” and a rule limiting the use of disparate impact to bring housing discrimination claims. Both rules were issued in the summer of 2020.

“This is not only a mandate to refrain from discrimination but a mandate to take actions that undo historic patterns of segregation and other types of discrimination and that afford access to long-denied opportunities,” the executive order said.

The “Preserving Neighborhood and Community Choice” rule essentially repealed an Obama-era Affirmatively Furthering Fair Housing rule to allow HUD to suspend housing grants and other funding for communities that don’t do enough to prevent housing discrimination.

Former President Donald Trump repeatedly complained that the rule would “destroy” the suburbs by mandating low-income housing. Affirmatively Furthering Fair Housing was a provision of the 1968 Fair Housing Act, but the rules remained unwritten until 2015.

Fair housing advocates said that Trump’s statements were largely meant to provoke fear that Blacks and Latinos would move into suburban communities.

HUD’s 2020 disparate impact rule rewrote regulations that the department put in place in 2013 that set a three-part test for determining whether HUD, state and local officials, or private actors can bring claims of unintentional housing discrimination.

The 2020 rule expanded it to a five-part test, provided defendants with sturdier defenses, and essentially shielded all algorithmic housing decisions from disparate impact claims. The rewritten rule raised the bar so high that critics feared such claims would be nearly impossible to bring.

Fudge Hearing

Judge Mark G. Mastroianni of the U.S. District Court for the District of Massachusetts put the disparate impact rule on hold in an October ruling. One of the options for the Biden administration in handling the litigation would be to simply not defend the rule.

Biden’s nominee for HUD secretary, Rep. Marcia Fudge (D-Ohio), is set for a confirmation hearing before the Senate Banking and Housing Committee on Jan. 28. She is expected to provide more insight into how HUD will handle the two regulations targeted in the Biden order.

The order to HUD was part of a series of executive actions signed by Biden that ended the Justice Department’s use of private prisons; combatted racist and xenophobic acts against Asian Americans and Pacific Islanders; and reaffirmed the federal government’s commitment to tribal sovereignty and consultation.

To contact the reporter on this story: Evan Weinberger in New York at eweinberger@bloomberglaw.com

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com, Melissa B. Robinson at mrobinson@bloomberglaw.com

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