Obama Racial Bias Housing Regulation Shot Down By Federal Judge

A housing bias regulation was just thrown out in federal court. The Obama administration-issued rule maintained that racial bias could be based upon “seemingly neutral practices” that could ultimately prompt a “discriminatory effect.” The U.S. Department of Housing and Urban Development (HUD) approved the regulation in 2013.

The Fair Housing Act of 1968 was only designed to address direct discrimination claims, according to U.S. District Judge Richard Leon. The district court judge went on to rule that the Obama administration’s take on the text contained in the Fair Housing Act “appears to be nothing more than wishful thinking on steroids,” and is based on an assumption that “disparate impact” accusations can be governed by the federal law.

The American Insurance Association and related business groups are calling the striking down of the Obama racial bias regulation a big win. Such groups reportedly opposed the disparate impact assumptions because the rule allowed for a vast array of housing business decisions which could be subject to a broad range of civil rights litigation. In 2012, Allstate Corporation was sued by the National Fair Housing Alliance for refusing to insure flat-roofed homes in Delaware. Flat roofs can pose significant issues due to build-up of rain and snow during inclement weather. The National Fair Housing Alliance claimed that the insurance carrier was engaging in a discriminatory practice because low-income minorities “were likely” to live in the structures.

Although the Obama housing racial bias rule was struck down in federal court, the regulation is not dead yet. The U.S. Supreme Court has scheduled a hearing in a very similar case. The ruling is not expected until June, 2015. In the past several years the U.S. Supreme Court had agreed to hear arguments in two similar cases, but each time the matter was resolved before a ruling had been announced.

The plaintiffs in the presumed racial bias case contend that the Fair Housing Act only prohibits the intentional discrimination of the sale or rental of a dwelling or related housing services based upon race, color, religion, sex, familial status, national origin, or handicap.

“Interpreting the Fair Housing Act to extend disparate impact liability to the provision and pricing of homeowner’s insurance requires insurers to consider characteristics such as race and ethnicity and to disregard legitimate risk-related factors,” the American Insurance Association v. U.S. Department of Housing and Urban Development says.

What do you think of the ruling on the Obama administration’s racial bias housing regulation?

[Image via: NBC News]