With each passing week, it seems there is another attempt by the Trump administration to whittle down someone’s civil rights protections.
The latest effort is a proposed rule from the Department of Housing and Urban Development that would make it considerably harder — if not impossible — to enforce fair housing laws designed to protect vulnerable groups from covert or unintentional discrimination.
HUD wants to rewrite and weaken an Obama-era regulation governing “disparate impact” lawsuits, which use housing statistics to demonstrate that a neutral-sounding policy or method employed by a landlord, bank, insurer or local government ends up discriminating against racial minorities, seniors, the disabled, families with children or other protected groups. While conservatives have long disputed the idea that violations of the 1968 Fair Housing Act can be proved through statistics even when there’s no evidence of intent to discriminate, a divided Supreme Court ruled in 2015 that disparate impact claims were valid as long as plaintiffs could show that the discriminatory results were caused by the defendant’s policies.
HUD Secretary Ben Carson said the proposed rule is intended to “increase legal clarity” by setting new guidelines for how to prove a disparate-impact claim in the wake of the 2015 ruling. But civil rights advocates say the proposal could have far-reaching effects across the housing industry, whose history is fraught with segregation and discrimination that continue to this day, often in insidious ways.
The new rule could make it harder to challenge cities that exacerbate segregation with exclusionary zoning rules that limit the supply of affordable housing; harder to go after banks whose underwriting standards result in higher fees and interest rates for minority home buyers; and harder to crack down on landlords who rely on algorithm-driven background checks that cause families, immigrants or racial minorities to be excluded.
The disparate impact regulation adopted by the Obama administration put the responsibility on landlords, lenders, insurance companies and others in the housing industry. If statistics showed that their policies resulted in discriminatory outcomes, they had to demonstrate a valid business reason for the policy and show that there was no less discriminatory way to achieve the same goal. The result, advocates said, was that companies had an incentive to be proactive in rooting out policies that might unintentionally hurt certain groups.
The Trump administration proposal would eliminate that incentive and essentially free companies to ignore the disparate impact of their policies. The proposed rule would shift the burden of proof to the victims of discrimination, who would pretty much have to prove that the policy is discriminatory and unnecessary before they had the chance to gather evidence from the companies. That sets an impossibly high bar.
Even more worrisome, HUD would give lenders and landlords a loophole to escape responsibility for discrimination if they make decisions based on a third-party vendor’s data analysis. More and more aspects of the housing industry rely on algorithmic-based systems for credit scoring, underwriting and risk-based pricing. The HUD proposal would let companies dismiss accusations of disparate impact if they make their decisions to lend, rent or insure customers based on an industry-standard model or a third-party vendor‘s input.
There’s ample evidence that those “fair” models and algorithms can have discriminatory effects. The models are often based on historical data or patterns that have discrimination baked in, which can perpetuate bias. Even HUD has recognized the troubling power of the algorithm when the agency sued Facebook earlier this year, saying the company’s machine learning and prediction techniques “function just like an advertiser who intentionally targets or excludes users based on their protected class.”
The proposed disparate impact rule fits into a larger pattern. The Trump administration is trying to dismantle civil rights protections in the name of streamlining regulations and providing more “certainty” for businesses and investors. Indeed, HUD General Counsel J. Paul Compton Jr. told reporters that the new disparate impact rule would free up businesses to “innovate and take risks without the fear they will be second-guessed through statistics down the line.”
But what if the statistics are right? What if a company’s innovation discriminates against and hurts vulnerable people who are protected under fair housing laws? Such policies should be second-guessed — and more important, fixed. The Trump administration’s proposal, however, is designed to make it harder to second-guess decisions to provide or deny housing. And in many cases, it could close off the opportunity for advocates to even ask the question.