WASHINGTON — The Department of Housing and Urban Development has proposed rescinding its long-standing regulations governing “disparate impact” liability under the Fair Housing Act, a move that would roll back three rules issued since 2013 and shift responsibility for interpreting such claims largely to the courts.
In a proposed rule published Jan. 14 in the Federal Register, HUD said it plans to remove its “discriminatory effects” regulations, which allow housing practices to be deemed unlawful based on unequal outcomes among protected classes even absent discriminatory intent. The proposal would eliminate Subpart G of 24 CFR Part 100 and related language that formalized HUD’s framework for evaluating disparate impact claims.
HUD said the change is driven in part by a 2025 executive order directing agencies to eliminate disparate-impact liability “to the maximum degree possible,” arguing that outcome-based standards conflict with principles of equal treatment and merit. The agency also cited recent Supreme Court precedent limiting judicial deference to agency interpretations, concluding that its regulations no longer provide clarity or predictability and that courts are better positioned to interpret the Fair Housing Act.