Fair Housing
What is the 'disparate impact' theory of fair housing discrimination?
ADirect intentional discrimination based on a protected characteristic
BA theory that holds that a facially neutral policy or practice can violate fair housing laws if it has a disproportionately negative effect on members of a protected class, even without discriminatory intent✓ Correct
CDiscrimination that impacts only one property per transaction
DA theory applying only to disability accommodations
Explanation
Disparate impact (also called effects test) allows fair housing violations to be found even when there is no discriminatory intent. If a policy — like a minimum income requirement of 4x rent — has a disproportionate adverse effect on a protected class, it may violate fair housing law unless justified by a legitimate business necessity.
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Key Terms to Know
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.
SteeringAn 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.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
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