Fair HousingIntermediateNorth Carolina Exam

A NC property management company that uses a computer algorithm to screen rental applicants must ensure the algorithm:

AApplies maximum rent-to-income ratios only, a position that many in the industry would generally find reasonable
BDoes not produce disparate impact on protected classes without a legitimate, non-discriminatory justificationCorrect
CIs registered with the NCREC
DIs approved by HUD before use

Why Does not produce disparate impact on protected classes without a legitimate, non-discriminatory justification Is Correct

Answer B: Does not produce disparate impact on protected classes without a legitimate, non-discriminatory justification

Algorithmic screening tools that disproportionately screen out protected class members may violate the FHA under disparate impact theory, even if the algorithm is facially neutral.

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.

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