A New Trump Rule Could Weaken A Civil Rights Era Housing Discrimination Law

The Trump administration is moving to weaken the civil rights-era Fair Housing Act — making it much harder to bring lawsuits alleging discrimination in housing, according to housing advocates. But conservative groups applaud the move and say it would stop frivolous lawsuits.

A draft of the Department of Housing and Urban Development rule, obtained by NPR, would target a powerful weapon that's used in discrimination cases. It's called "disparate impact." That means that to prove discrimination in a lawsuit, plaintiffs don't have to prove, for example, that a bank employee is refusing to make loans to people of color. They just have to show that a company has a business practice that, on its face, may not purposefully discriminate but has a discriminatory effect.

Enlarge this image toggle caption Courtesy of Wanda Onafuwa Courtesy of Wanda Onafuwa

"It's important because it allows us to really get at discrimination that's not intentional," says Nikitra Bailey, a lawyer with the nonprofit Center for Responsible Lending. She says the Trump administration's new rule would severely restrict this very important tool for fighting discrimination in housing.

"It's huge," Bailey says, because it allows fair housing lawsuits to obtain remedies for large numbers of people "without having to demonstrate each individual action of discrimination."

The proposal, which is not yet public, is expected to be released in August.

In one current case, a fair housing group is suing Bank of America, alleging that when the bank foreclosed on homes in recent years, it treated the vacant houses very differently in white neighborhoods than it did minority neighborhoods.

Wanda Onafuwa lives next to one of these houses in Baltimore's Tremont neighborhood. She works in accounting, owns her house and raised her kids there. She says it's a nice, quiet street. But then Bank of America foreclosed on the house next door, and it fell into worse and worse disrepair.

"The grass wasn't being mowed, there were no windows upstairs," Onafuwa says. "So you have a bad rainstorm, and I don't know what was going on with the roof, water would get in."

She says water would fill the basement and then spill over into her basement. "There were rats running around."

Onafuwa says she called the city and the bank repeatedly, but not much changed. Then, she says, a squatter started living in the vacant house — "a guy going in and out." That's even though, she says, there was no electricity hooked up. "It just looked pitch-black," she says.

Lisa Rice, president of the National Fair Housing Alliance, which is bringing the lawsuit, says her group looked at foreclosed properties in more than 70 communities across the country with comparable levels of owner-occupied homes and other similarities.

"In the white communities that we looked at, the story was completely different," she says. "The grass was mowed, the doors were secure, the windows were not broken, we didn't see trash and debris."

Bank of America said in a statement that it denies the claims in the lawsuit. "Our commitment to sustainable homeownership for low- to moderate-income and multicultural clients and communities has always been a hallmark of Bank of America," it said.

But in a disparate impact lawsuit, you don't have to show that a company meant to discriminate. The company might have had the best of intentions but still have adopted a policy that has an unequal outcome with a discriminatory effect.

Rice says these types of Fair Housing Act cases go back more than 40 years. In 2015, the Supreme Court upheld the use of disparate impact while imposing some limitations. But many corporations and conservatives don't like this legal approach.

"There are always going to be racially disproportionate results for any policy," says Roger Clegg, president of the Center for Equal Opportunity, a conservative think tank that focuses on civil rights issues. Clegg, who worked in the Justice Department in the Ronald Reagan and George H.W. Bush administrations, says these disparate impact cases are often unfair to defendants because the cases find discrimination where it's not actually happening.

"If you have a landlord who says, 'I'm not going to rent to people with a history of violent crime,' " he says. "The fact that that has a racially disproportionate result does not make it discrimination."

So he says this disparate impact approach results in a lot of unfair lawsuits. And he says the Trump administration's new rule will provide clarity about the limits under the 2015 Supreme Court decision.

But Bailey, of the Center for Responsible Lending, says the proposed rule goes way beyond that. "It really makes it more difficult to bring disparate impact cases, and then it limits the damages for discrimination," she says.

Bailey says with African American homeownership rates at their lowest level in 50 years, this could set up more roadblocks.

The Department of Housing and Urban Development says it can't comment on the proposed rule yet. But in an earlier statement, HUD Secretary Ben Carson said the department "remains committed to making sure housing-related policies and practices treat people fairly."

But civil rights advocates say they're worried. They say that beyond this proposed housing rule, the Trump administration is looking to roll back civil rights protections in education and in terms of which groups of people deserve protection from discrimination.