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Disparate Impact Being Tested Across Country

Resident Screening

WASHINGTON, D.C. – As anticipated with last summer’s U.S. Supreme Court ruling on Inclusive Communities (ICP) v. Texas Department of Housing and Community Affairs, organizations from across the country are testing the threshold of Disparate Impact Theory on rental housing. Two of the most recent and prominent tests include the following:

Criminal Background – Washington State Attorney General is conducting fair housing testing on the use of criminal records in tenant screening. The investigation centers on advertised blanket felony exclusion policies and its impact to a specific racial demographic.

Occupancy Standards – A private multistate fair housing complaint was filed against member companies calling into question its use of occupancy standards. The complaint alleges that a policy restricting occupancy to two-persons per bedroom is discrimination against familial status.

Ironically, the landmark ICP case that enabled these actions failed in federal district court on its merits. In an opinion by presiding Judge Sydney Fitzwater, ICP failed to establish a basic “prima facie” case, or sufficient corroborating evidence to support claims of discrimination.

As many legal observers suggested at the time of the Supreme Court ruling, while the courts deemed disparate impact is cognizable, it would not be easy to prove. As evidence, legal scholars pointed to the fact that to prove that a policy has a disparate impact, a three-part balance-shifting test must be employed to determine whether a fair housing violation has occurred.

Initially, the complainant must establish that a policy or practice has a disparate impact on a protected class. Then the burden shifts to the respondent who must show that there is a legally sufficient justification for the policy or practice being challenged by the complainant. Finally, the burden shifts back to the complainant to show that there is a less discriminatory alternative to the policy or practice.

In his opinion, Judge Fitzwater argued that ICP was unable to prove the initial balance-shifting test that a discriminatory policy or practice exists.

-- Fred Tayco