Fair HousingIntermediateColorado Exam

Under the FHA, 'disparate impact' theory means a housing practice can be discriminatory if:

AA. Only ever if the landlord personally intended to discriminate with clear provable intent

BB. The practice has a disproportionate negative effect on a protected class, even if the policy appears neutral on its face, unless justified by a legitimate business necessityCorrect

CC. Only if all members of a protected class are excluded, though many experienced professionals would note some exceptions depending on the circumstances, under standard practice

DD. Only when the discrimination is written into the lease

Why B. The practice has a disproportionate negative effect on a protected class, even if the policy appears neutral on its face, unless justified by a legitimate business necessity Is Correct

Answer B: B. The practice has a disproportionate negative effect on a protected class, even if the policy appears neutral on its face, unless justified by a legitimate business necessity

In Texas Dept. of Housing v. Inclusive Communities Project (2015), the U.S. Supreme Court held that disparate-impact claims are cognizable under the Fair Housing Act. A neutral-looking policy can be challenged if it has a disproportionate effect on a protected class. A statistical disparity alone is not enough: the plaintiff must point to the defendant's policy as causing it, and the defendant may justify the policy by showing it serves a valid interest. Intent to discriminate need not be proven.

Source: Texas Dept. of Housing v. Inclusive Communities Project (Cornell LII)

Exam Tip: Fair Housing

Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.

Key Fair Housing Terms in This Question

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

People Also Study

Key Terms to Know

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

Steering

An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.

Blockbusting

An illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.

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