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Newly Proposed Rule Would Make Lawsuits like Road Home and St. Bernard Parish “Blood Relative” Cases Nearly Impossible

Posted on 23. Aug, 2019 by


New Orleans—Today, the Greater New Orleans Fair Housing Action Center (GNOFHAC) denounced an extreme move by the Trump Administration’s Department of Housing and Urban Development (HUD) to eviscerate a long-standing civil rights protection known as “disparate impact.” HUD’s proposed rule, published today in the federal register, would make it far more difficult to challenge discriminatory practices that are not blatant or explicit.

Though the term “disparate impact” may not be well-known, residents of South Louisiana are far too familiar with the trials and tribulations of dealing with the Road Home program after Hurricanes Katrina and Rita. Chief among the problems with the program was its discriminatory funding formula. Initially, the program used what appeared to be a neutral policy of offering homeowners rebuilding grants determined by the pre-storm value of their damaged home. Despite being neutral on its face, the policy resulted in homeowners in segregated white neighborhoods—which had higher pre-storm values—receiving higher grant awards than homeowners in predominantly African American neighborhoods. This was true even when the homes were the same size and age, and the damage was similar. Because of disparate impact, GNOFHAC’s lawsuit resulted in HUD and the Louisiana Recovery Authority putting $62 million dollars back in the pockets of Louisianans to rebuild their homes. It’s exactly this legal principle that HUD is attempting to gut with its new rule. 

Another significant post-Katrina case that utilized disparate impact was GNOFHAC’s challenge to the St. Bernard Parish “blood relative” ordinance. That law, passed in 2006 by the Parish Council, prohibited the rental of single-family residences unless to a blood relative, at a time when 93 percent of parish homeowners were white. The lawsuit, as well as a subsequent disparate impact challenge to a ban on apartment buildings, paved the way for more rental housing available to Louisianans hoping to come home after the storms.

HUD’s proposed rule significantly raises the burden of proof for discrimination, provides special protections for businesses that use algorithms, and appears to lay the foundation for exempting the insurance industry from disparate impact liability.

The disparate impact theory has been used to prove housing discrimination claims since the passage of the Fair Housing Act, and has enjoyed bi-partisan support for more than 50 years, beginning with its application by Richard Nixon’s Administration. Disparate impact has been upheld by 11 Courts of Appeals and by the U.S. Supreme Court in its 2015 Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project ruling.

“Whether you’re black, white, a family with children, or you have a disability, everyone should have a fair opportunity to find a place to call home. Disparate impact is not abstract in Louisiana—this legal tool has directly benefitted the residents of our state. Attacking this long held civil rights protection is just another way this Administration seeks to divide our country,” said Cashauna Hill, executive director of the Greater New Orleans Fair Housing Action Center.

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