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Fair Housing Act: disparate impact theory of liability

 

by Steve Tomkowiak   |   Michigan Bar Journal

Congress began debating fair housing legislation in 1966 during a period of widescale urban unrest,1 but progress stagnated for almost three years. Then, in March 1968, the Kerner Commission Report found that America was “moving toward two societies, one Black, one White — separate and unequal”2 and one of its major recommendations was enactment of a comprehensive federal fair housing law.3 Less than a month later, Dr. Martin Luther King Jr. was assassinated, sparking a new round of unrest. By April 11, one week after King’s death, Congress passed the Fair Housing Act (FHA).4

The disparate impact (DI) theory of liability was recognized as an important tool in remedying residential segregation.5 Unfortunately, in the 50 years since the FHA passed, the standard for determining DI liability remains unsettled, impeding the act’s effectiveness.

Though the U.S. Supreme Court held in Griggs v. Duke Power Co. and Smith v. City of Jackson6 that DI claims could be brought via Title VII and the Age Discrimination in Employment Act (ADEA),7 the Court for more than 40 years did not address whether such claims could be brought under the FHA.8 In 2012 and 2013, the Court granted certiorari in two cases to determine availability of DI claims under the FHA9 but both “unexpectedly settled.”10

During this time, all federal appeals courts considering DI claims under the FHA11 recognized the theory of liability.12 So, too, did the U.S. Department of Housing and Urban Development (HUD) in its adjudications.13 The courts and HUD also recognized an additional category of DI liability in policies shown to have “the unjustified effect of perpetuating segregation.”14 There are no appellate deci­sions in Michigan state court cases addressing fair housing cases involving DI claims. DI appears to be a wholly underutilized tool in Michigan to address housing policies that cause a disparate impact or perpetuate segregation.

HUD’S 2013 DI RULE

Establishing a uniform standard for disparate impact liability un­der the FHA proved elusive. In 2013, HUD clarified the frame­work by setting forth a uniform standard15 with a three-part, bur­den-shifting approach:

1) The plaintiff has the burden of proving a “[d]iscriminatory ef­fect” showing that the challenged practice “actually or predict­ably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated hous­ing patterns because of race, color, religion, sex, handicap, familial status, or national origin.”16

2) The defendant then has the burden to prove that the challenged practice “[i]s necessary to achieve one or more substantial, le­gitimate, nondiscriminatory interests” of the defendant.17

3) If the defendant satisfies this burden, the “plaintiff may still prevail upon proving that the substantial, legitimate, non­discriminatory interests supporting the challenged practice could be served by another practice that has a less discrimi­natory effect.”18

THE SUPREME COURT ICP DECISION

In 2014, the Supreme Court agreed to review Texas Dep’t of Hous­ing & Community Affairs v. The Inclusive Communities Project, Inc. (ICP) to determine whether disparate impact claims are cognizable under the FHA.19 The Court held that DI claims could be brought un­der FHA sections 804(a) and 805(a),20 noting that when Congress passed the amendments to the FHA in 1988, all courts of appeals considering DI claims found that such claims could be brought un­der the act.21 Congress, aware of this precedent, ratified the DI theory of liability as part of those amendments.22

Further, the Court found DI liability was consistent with the FHA stat­utory purpose, saying that “unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude mi­norities from certain neighborhoods without any sufficient justifica­tion”23 and noted that recognizing DI liability “permits plaintiffs to counteract unconscious prejudices ... that escape easy classification as disparate treatment.”24 And like HUD in its 2013 rule, the Court also found that actions leading to perpetuation of segregation can give rise to DI liability25 and, after summarizing the burden-shifting framework in the HUD rule, agreed that the plaintiff had the burden of proving there were no less-discriminatory alternatives.26

The Court articulated cautionary standards to govern the pleading and proofs for DI claims:

  • A plaintiff must “allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection” be­tween the policy and discriminatory effects.27
  • A robust causality requirement that ensures evidence of “ra­cial imbalance ... does not ... establish a prima facie case of disparate impact.” The robust causality requirement “protects defendants from being liable for racial disparities they did not create.”28
  • Policies of governmental or private actors will not give rise to DI liability unless they create “artificial, arbitrary, and unnec­essary barriers.”29

As noted above, the Court granted review limited to whether DI claims were cognizable under the FHA, declining to require brief­ing on applicable standards and burdens of proof. Nonetheless, lower courts have sought to apply these cautionary standards.

HUD’s 2020 DI RULE AND RETURN TO THE 2013 RULE

Though the Supreme Court in ICP either left intact HUD’s 2013 rule or, at best, made it somewhat more demanding,30 the agency in 2020 took the unusual step of amending its 2013 rule, claiming revisions were needed “to better reflect” the ICP ruling.31

Prior to implementing the 2020 regulation, three separate actions challenged it.32 In one, the district court enjoined HUD from imple­menting the regulation33 and, as a result, it never went into effect. HUD subsequently reinstated its 2013 rule.34

DI CLAIMS UNDER ICP AND HUD’s 2013 RULE

In post-ICP cases, courts have reached different conclusions as to whether the U.S. Supreme Court adopted HUD’s framework or modified it.35 Courts have also struggled with the robust causation requirement,36 but the Supreme Court analysis in ICP may be best understood as accepting HUD’s three-step, burden-shifting ap­proach from its 2013 regulation while offering guidance in analyz­ing each step of the claim.

To show a prima facie case at the first step of a claim, the plain­tiff must sufficiently allege (at the pleading stage) or establish (at summary judgment or trial) a robust causality requirement by spe­cifically identifying the policy or policies causing the disparity. A one-time decision ordinarily fails to constitute a policy,37 evidence showing only preexisting statistical disparities between protected and non-protected groups is not sufficient, and the disparity must not have been caused by factors distinct from the challenged policy.

Most courts find robust causality if the plain­tiff presents statistical evidence showing a protected class “is disproportionately af­fected by a . . . policy.”38 Other courts ap­ply more stringent standards requiring the plaintiff to show not just that the policy had a disproportionate adverse effect on a protected class, but also caused the sta­tistical disparity.39

In the rebuttal step, courts agree that the defendant has the burden of showing the policy is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests. This is not an onerous burden, and the defendant has leeway to identify the policy’s valid interests or priorities. Fur­ther, federal law or other regulatory require­ments that substantially limit the defendant’s discretion in fashioning a policy should also be considered, as should policies of govern­mental or private actors that create “artifi­cial, arbitrary, and unnecessary barriers.”40

Analysis of the third stage under ICP does not vary from HUD’s formulation. Both re­quire the plaintiff to show the defendant’s interests could be served by an alternative practice that has less discriminatory impact or effect.41

POST-ICP CLAIMS IN HOUS­ING-RELATED CONTEXTS

Courts have addressed FHA DI claims in residential housing-related contexts using the framework set forth in ICP and HUD’s 2013 regulation. Five recent cases illus­trate the variety of policies that may give rise to DI claims and show they may be successfully prosecuted.

Zoning (Race)

In Mhany Mgmt, Inc. v. County of Nassau,42 the U.S. Court of Appeals for the Second Circuit considered a challenge to a city zoning ordinance as a perpetuation of seg­regation. The original multi-family residen­tial group zoning would have allowed the plaintiff to construct residential apartment units in a city that contained no affordable housing and where minorities constituted about 4% of the overall population. Due to public pressure, the city rezoned the prop­erty to residential-townhouse, which defined “townhouse” as a “single-family dwelling unit.”43 The district court found that rezon­ing “significantly decreased the potential pool of minority residents likely to move into the new housing development.”44

Analyzing the DI claim under ICP and HUD’s 2013 regulation, the Second Circuit found that the rezoning decision perpetuat­ed segregation within the city. In the sec­ond step of the claim, the city contended that rezoning advanced legitimate interests by reducing traffic and the strain on public schools. As to the third step, the court found that HUD regulations abrogated prior cir­cuit precedent regarding burden of proof to establish the absence of a less discriminato­ry alternative. Since the district court placed the burden on the city to establish the ab­sence of less-discriminatory alternatives, the appeals court reversed and remanded the ruling.45

Citizenship Status (National Origin)

In Reyes v. Waples Mobile Home Park Ltd. Partnership,46 a mobile home park began enforcing a policy requiring all occupants to document their legal status in the U.S. by presenting an original Social Securi­ty card or an original (foreign) passport, U.S. visa, and original arrival/departure form (I-94 or I-94W). Under the policy, the park would not renew the lease and seek eviction for any tenant with one or more occupants who did not provide the required documentation.47

The plaintiffs alleged that Latinos comprised nearly 65% of the undocumented popula­tion in Virginia, undocumented immigrants comprised more than 36% of the Latino population in the state, and Latinos were 10 times more likely than non-Latinos to be adversely affected by the policy. The court said the plaintiffs satisfied ICP's robust cau­sality requirement by asserting the policy would disproportionately subject Latino ten­ants to eviction.48

Insurance (Race and Sex)49

In National Fair Housing Alliance v. Trav­elers Indemnity Co.,50 plaintiff’s testers51 in the District of Columbia posed as purchas­ers of an apartment complex and contact­ed various insurance companies to inform them that they participated in the Housing Choice Voucher (HCV)52 program. In each instance, insurance brokers told testers the companies would not insure the property if voucher recipients resided in the building.53

According to statistics included in the com­plaint, D.C. households are approximately 45% non-Hispanic Black or African Amer­ican and 41% non-Hispanic white. More than 47% of D.C. households are headed by women. For households receiving HCVs, 92% are non-Hispanic Black or African American compared to roughly 45% of all households receiving HCVs in D.C. Only 1% of HVC recipients are non-Hispanic whites. The percentage of households re­ceiving HCVs headed by women totaled 81.5%, compared to 47% of all households headed by women in all of D.C. Further, residents participating in the HCV program were largely concentrated in four census tracts that were nearly 85% Black compared to the entire D.C. percentage of 51%.54

The court held that the plaintiff’s allegations satisfied the ICP robust pleading require­ment. According to the court, the insurer’s policy ‘‘will exacerbate racial and sex-based disparities by having a disproportionate impact on African-American residents and members of women-headed households.”55

Occupancy Limits (Familial Status)

In Rhode Island Commission for Human Rights v. Graul,56 the tenants, a married couple renting a one-bedroom unit, had a child. The bedroom measured at least 150 square feet. The apartment complex gave the tenants six months to move to a two-bed­room unit or vacate due to a two-person-per-bedroom unit policy.57

Applying the three-step analysis in ICP, the court found in step one that a prima facie case was established based on evidence showing disparity ratios for three-person households with children, four-person households, and five-person households well above the 1.25 ratio for statistical significance,58 even when controlled by in­come range.

In the second step, the apartment complex claimed its policy complied with the view of a local official regarding the building code and asserted there was a minimum re­quirement of 170 square feet for bedroom occupancy by three persons. The court re­jected this assertion as misreading the build­ing code, which required bedroom units to have at least 70 square feet for the first occupant and at least 50 square feet per person for more than one occupant. A 150 square foot bedroom unit, therefore, could hold three people.59 The complex failed to carry its burden in the second step, and the court did not need to reach the third step.

Use of Criminal Records
(Race and National Origin)

Connecticut Fair Hous. Ctr v Corelogic Rent­al Prop. Solutions, LLC60 involved a chal­lenge to the defendant’s use of CrimSAFE criminal record screening. The defendant provides a housing provider with a form list­ing general categories of crimes for which it would like CrimSAFE to screen. Using those categories, the defendant generated a one-page report indicating whether dis­qualifying records were found, including ar­rests that that did not lead to conviction. The CrimSAFE report had a maximum “look­back” of 99 years for convictions and seven years for non-convictions and provides no additional information such as the underly­ing records, the nature of the alleged crime, the date of the offense or the outcome of the case, if any.61

One plaintiff, a Latino man, suffered de­bilitating injuries in a car accident, ren­dering him unable to speak, walk, or care for himself. The year before his injury, he was arrested for retail fraud but never convicted. Using CrimSAFE, the defen­dant informed the housing provider that the plaintiff was disqualified based on un­specified criminal records.62

In denying cross motions for summary judgment on the DI claims, the court noted statistical evidence showing Blacks were more than four times as likely as whites and Latinos more than 2.5 times as likely as whites to have been jailed at some point in their lives.

With respect to the second step, the de­fendant claimed that federally subsidized properties required screening for arrests and convictions and the process accurate­ly categorizes risk levels and reduces bias. The court, however, found that the defen­dant did not provide legal or empirical support for treating a pending arrest record as sufficient to determine that a prospective tenant would threaten the health or safety of a residential community. The court noted that HUD, in informal guidance, treated ar­rest records as insufficient to warrant denial of admission.63 In the third step, the court found that the plaintiffs met their burden un­der ICP and the 2013 regulation of show­ing less discriminatory alternatives.

CONCLUSION

The disparate impact theory of liability is well established as a cognizable theory of liability in fair housing cases. DI claims may challenge practices that result in discrimination. Still, the theory remains underutilized as a tool to combat policies that adversely impact one or more protected classes or perpetuate segregated housing patterns. The DI theory of liability should prompt all entities involved in any aspect of housing to carefully review all policies — without establishing unlawful quotas — to ensure they do not result in adverse discriminatory effects or perpetuate segregation.


ENDNOTES

1. Texas Dep’t of Housing & Comm Affairs v The In­clusive Communities Project, 576 US 519, 529; 135 S Ct 2507; 192 L Ed 2d 514 (2015) (“After extensive factfinding the Commission identified residential segre­gation and unequal housing and economic conditions in the inner cities as significant, underlying causes of the social unrest,” citing Report of the Nat’l Advisory Comm on Civil Disorders (1968) (hereinafter, “Kerner Commission Report”).

2. Kerner Commission Report, p 1, available at [https://perma.cc/DWZ6-WUJV] (website accessed February 7, 2022).

3. Id. at 263.

4. 42 USC 3601 - 3619. See also Fair Housing and Related Laws, US Dep’t of Housing and Urban Devel­opment [https://perma.cc/TYP5-XBT4] (website accessed Feb­ruary 7, 2022).

5. Texas Dep’t of Housing, 576 US at 539-40, 566 (Ali­to, J, dissenting).

6. Griggs v Duke Power Co, 401 US 424; 91 S Ct 849; 28 L Ed 2d 158 (1971) and Smith v City of Jackson, 544 US 228; 125 S Ct 1536; 161 L Ed 2d 410 (2005).

7. 29 USC 623 – 634.

8. Huntington v. Huntington Branch, NAACP, 488 US 15, 18; 109 S Ct 276; 102 L Ed 2d 180 (1988) (“Since appellants conceded the applicability of the dis­parate-impact test for evaluating the zoning ordinance under Title VIII, we do not reach the question whether that test is the appropriate one.”).

9. Magner v Gallagher, 566 US 1013; 132 S Ct 548 (Mem); 181 L Ed 2d 395 (2011) and Magner v Gal­lagher, 566 US 1187; 132 S Ct 1306 (Mem); 181 L Ed 2d 1035 (2012) (appeal dismissed); Twp of Mount Holly v Mount Holly Gardens Citizens in Action, 570 US 904; 133 S Ct 2824 (Mem); 186 L Ed 2d 883 and Twp of Mount Holly v Mount Holly Gardens Citizens in Action, 570 US 1020; 134 S Ct 636 (Mem); 187 L Ed 2d 415 (2013) (appeal dismissed).

10. Texas Dep’t of Housing, 576 US at 552 n 4 and 576 n 8. The Court questioned the circumstances lead­ing to the dismissals in Magner and Mt. Holly.

11. E.g., Langlois v Abington Housing Auth, 207 F 3d 43, 49-50 (CA 1, 2000); Huntington Branch, NAACP v Town of Huntington, 844 F 2d 926, 935-36 (CA 2, 1988); Resident Advisory Bd v Rizzo, 564 F 2d 126, 146-47 (CA 3, 1977); Betsey v Turtle Creek Assoc, 736 F 2d 983 (CA 4, 1984); Hanson v Veterans Admin, 800 F 2d 1381, 1386 (CA 5, 1986); Arthur v City of Toledo, 782 F 2d 565, 574-75 (CA 6, 1986); US v City of Black Jack, 508 F 2d 1179, 1184-85 (CA 8, 1974); and Halet v Wend Investment Co, 672 F 2d 1305, 1311 (CA 9, 1982).

12. Implementation of the Fair Housing Act’s Discrimina­tory Effects Standard, 78 Fed Reg 11460 (February 15, 2013) (to be codified at 24 CFR pt 100).

13. E.g., HUD v Mountain Side Mobile Estates Part­nership, HUDALJ 08-92-0010-1 (1993), aff’d in perti­nent part by Mountain Side Mobile Estates Partnership v HUD, 56 F 3d 1243 (CA 10, 1995), and 78 Fed Reg 11460, 11461 – 62. As a federal agency, HUD may adopt a policy through adjudication, see general­ly Informal Administrative Adjudication: An Overview, Congressional Research Service (October 1, 2021), available at [https://perma.cc/A7WJ-CJVY].

14. Huntington Branch, NAACP, 844 F 2d at 937; Graoch Assoc #33, LP v Louisville/Jefferson Cty Metro Human Relations Comm, 508 F 3d 366, 378 (CA 6, 2007); Metropolitan Housing Dev Corp, 558 F 2d at 1291; and City of Black Jack, 508 F 2d at 1184-86. See generally Schwemm, Segregative-Effect Claims Un­der the Fair Housing Act, 20 NYU J Legis & Pub Pol’y 709, 714 (2017), available at  [https://perma.cc/LS2S-4KLT].

15. 78 Fed Reg 11460, 11469-70 n 102.

16. 24 CFR 100.500(a) and (c)(1). This first element in a DI case is commonly referred to as the plaintiff’s “prima facie case,” Texas Dep’t of Housing, 576 US at 543 and Wards Cove Packing Co v Antonio, 490 US 642, 653 (1989). Unfortunately, the “prima facie case” terminology is also used to describe each of the prima facie elements (typically four or five) that a plaintiff must initially establish to satisfy the intent requirement of a dis­parate treatment case involving indirect, circumstantial evidence, St. Mary’s Honor Ctr v Hicks, 509 US 502; 113 S Ct 2742; 125 L Ed 2d 407 (1993); US Postal Servs Bd of Governors v Aikens, 460 US 711, 714; 103 S Ct 1478; 75 L Ed 2d 403 (1983); and Texas Dept of Community Affairs v Burdine, 450 US 248, 252- 53; 103 S Ct 1478; 75 L Ed 2d 403 (1981).

17. 24 CFR 100.500(b)(i) and (c)(2). Additionally, the “legally sufficient justification must be supported by ev­idence and may not be hypothetical or speculative” 24 CFR 100.500(b)(ii)(2). As to the second element, HUD’s 2013 DI rule avoids the “justified by business necessity” terminology found in employment discrimination cases and many earlier FHA cases.

18. 24 CFR 100.500(b)(ii) and (c)(3).

19. Texas Dep’t of Housing & Comm Affairs v The Inclu­sive Communities Project, 573 US 991; 135 S Ct 46 (Mem); 189 L Ed 2d 896 (2014).

20. Texas Dep’t of Housing, 576 US at 533-34 (quoting 42 USC 3604(a) and 42 USC 3605(a)). The Court did not address whether DI claims could be brought under other sections of the FHA.

21. Texas Dep’t of Housing, 576 US at 535-38 (listing court of appeals’ decisions).

22. Id. at 536.

23. Id. at 539.

24. Id. at 540.

25. Id.

26. Id. at 527-28.

27. Id. at 523-24 and 543.

28. Id. at 542 (quoting Wards Cove Packing Co, 490 US at 653).

29. Id. at 543 (quoting Griggs, 401 US at 431).

30. Reinstatement of HUD’s Discriminatory Effects Stan­dard, 86 Fed Reg 33590, 33592-93 n 35 (June 25, 2021); MHANY Mgt, Inc v County of Nassau, 819 F 3d 581, 618 (CA 2, 2016) (‘‘The Supreme Court implicitly adopted HUD’s approach’’); Inclusive Communities Proj v Lincoln Prop Co, 920 F 3d 890, 902 (CA 5, 2019) (noting that ‘‘debate exists regarding whether in ICP the Supreme Court adopted [HUD’s 2013] regulation’s ap­proach or modified it’’); and Reyes v Waples Mobile Home Park Ltd Partnership, 903 F 3d 415, 432 n 10 (CA 4, 2018) (“To the extent the two conflict, Inclusive Communities controls, but we also afford the HUD regu­lation and guidance the deference it deserves.”).

31. HUD’s Implementation of the Fair Housing Act’s Dis­parate Impact Standard, 85 Fed Reg 60288 (September 24, 2020).

32. Mass Fair Housing Ctr v HUD, No 20-11765 (2020); Nat’l Fair Housing Alliance v HUD, No 20- 7388 (2020); and Open Communities Alliance v HUD, No 20-1587 (2020).

33. Mass Fair Housing Ctr v HUD, 496 F Supp 3d 600, 606-7 (D Mass, 2020). In ruling on the request for pre­liminary injunctive relief, the court found a likelihood that the 2020 DI regulation constituted a massive over­haul and changed the standard for DI liability under the FHA, rendering the regulation arbitrary and capricious in violation of the Administrative Procedure Act.

34. 86 Fed Reg 33590.

35. Compare Mhany Mgt, 819 F 3d at 618 (“Supreme Court implicitly adopted HUD’s approach”) with Inclu­sive Communities Project v Lincoln Prop Co, 920 F 3d 890, 902, 903 n 6 (CA 5, 2019) (“We read the Su­preme Court’s opinion in ICP to undoubtedly announce a more demanding test than that set forth in the HUD regulation” and “we are convinced the Supreme Court’s language in ICP is stricter than the regulation itself.”). See also Reyes, 903 F 3d at 424 n 4 (“Without decid­ing whether there are meaningful differences between the frameworks,” the court noted, “that the standard announced in [ICP], rather than the HUD regulation[,] controls our inquiry.”).

36. Lincoln Prop Co, 920 F3d at 903-05 (noting that the Supreme Court in ICP and the Fifth Circuit on remand in ICP did not “clearly delineate” the “robust causation” requirement, and that the Fourth, Eighth, and Eleventh circuits have reached various views as to this causation requirement) (citing cases).

37. But see Mhany Mgt, 819 F 3d at 619 (noting that in the Title VII and ADEA contexts, courts have permit­ted “cases dealing with disparate impact challenges to single decisions of employers” and “other circuits have described the distinction between a single isolated de­cision and a practice as ‘analytically unmanageable— almost any repeated course of conduct can be traced back to a single decision.’”).

38. Inclusive Communities Proj v Lincoln Property Co, 930 F 3d 660, 661-67 (CA 5, 2019); Reyes, 903 F 3d at 427-49, 430; Oviedo Town Center II v City of Oviedo, unpublished opinion of the United States Court of Appeals for the Eleventh Circuit, issued December 28, 2018 (No 17-14254); Binns v City of Marietta, un­published opinion of the United States Court of Appeals for the Eleventh Circuit, issued August 3, 2017 (No 16- 14924); and Boykin v Fenty, unpublished opinion of the United States Court of Appeals for the District of Colum­bia, issued June 14, 2016 (No 13-7159).

39. Inclusive Communities Proj v Heartland Communi­ty Ass’n, Inc, unpublished opinion of the United States Court of Appeals for the Fifth Circuit, filed August 10, 2020 (No 19-10991), (robust causation requires either “‘a change in the defendant’s enforcement of [a] poli­cy’ caused a disparate impact; or a challenged policy ‘caused the relevant minority group to be the dominant group’ of those affected by the policy.”).

40. Texas Dep’t of Housing & Comm Affairs, 576 US at 544. It is unclear at what step the examination of “artificial, arbitrary, and unnecessary barriers” should occur, but the Ninth Circuit considers this at the second step. The Ninth Circuit fashioned a two-part analysis for the second step: “At end, it is defendant’s burden at this stage to show (1) a legitimate business interest, and (2) that the practice or policy serves in a significant way that legitimate interest.” Southwest Fair Housing Council, 9 F 4th at 1194.

41. Compare HUD’s 2013 DI regulation (“substantial, legitimate, nondiscriminatory interest supporting the challenged practice could be served by another practice that has a less discriminatory effect”) with Texas Dep’t of Housing & Comm Affairs, 576 US at 533 (“a court must determine that a plaintiff has shown that there is an available alternative . . . practice that has less disparate impact and serves the [entity’s] legitimate needs”).

42. MHANY Mgt, Inc v County of Nassau, 819 F 3d 581 (CA 2, 2016).

43. Id. at 590-97.

44. Mhany Mgmt, Inc v County of Nassau, 843 F Supp 2d 287, 329 (ED NY, 2012).

45. Id. at 617-20.

46. Reyes v Waples Mobile Home Park Ltd Partnership, 903 F 3d 415 (CA 4, 2018).

47. Id. at 419. Previously, the park only enforced the policy against the tenant. In 2015, the park began en­forcing the policy against all occupants over 18 years of age. Tenants not in compliance with the policy had 21 days to cure the violation or 30 days to vacate the park. Further, the park converted these leases into month-to-month leases with an additional $100 fee for each month a non-complying tenant did not vacate the lot. In 2016, the additional fee increased to $300 a month. Id. at 419-20.

48. Id. at 428. Following discovery, plaintiffs presented evidence that Latinos were nearly twice as likely to be undocumented compared to Asians, and 20 times more likely to be undocumented than other groups. Addition­ally, plaintiffs submitted evidence showing that 11 of the 12 tenants (or 91.7%) in noncompliance with the policy were Latino. Id. at 422.

49. The Fourth Circuit in an earlier case held that in­surance coverage is not subject to the FHA. Mackey v Nationwide Ins Co, 724 F 2d 419, 424 (CA 4, 1984). It is the only circuit court to reach this conclusion. All subsequent circuit court decisions and HUD regulations have found that homeowner’s insurance is covered under the FHA. Ojo v Farmers Group, Inc, 600 F 3d 1205, 1207-8 (CA 9, 2010); 24 CFR 100.70(d)(4). See also NAACP v American Family Mutual Ins Co, 978 F 2d 287, 297 (CA 7, 1992) (“No insurance, no loan; no loan, no house; lack of insurance thus makes housing unavailable.”).

50. Nat’l Fair Housing Alliance v Travelers Indemnity Co, 261 F Supp 3d 20 (D DC, 2017).

51. “Testing refers to the use of an individual or individ­uals (testers) who, without a bona fide intent to rent or purchase a house, apartment, or other dwelling, pose as prospective renters or purchasers for the purpose of gathering information that may indicate whether a housing provider is complying with fair housing laws.” 24 CFR 115.100(c). Testing has been approved in nu­merous fair housing cases. E.g., Havens Realty Corp v Coleman, 455 US 363, 373; 102 S Ct 1114; 71 L Ed 2d 214 (1982); Gladstone, Realtors v Village of Bell­wood, 441 US 91, 94; 99 S Ct 1601; 60 L Ed 2d 66 (1979); and Paschal v Flagstar Bank, 295 F 3d 565, 576, 579-80 (CA 6, 2002).

52. The HCV program is commonly referred to as Sec­tion 8, as the program was established in Section 8 of the US Housing Act of 1937, Pub L.75-412, 50 Stat 888, 891. Section 8(b)(1) authorizes financial assis­tance for rental housing, 42 USC 1437f(B)(1).

53. Nat’l Fair Housing Alliance, 261 F Supp 3d at 22- 23.

54. Id. at 23.

55. Id. at 33-34.

56. Rhode Island Comm for Human Rights v Graul, 120 F Supp 3d 110 (D RI, 2015).

57. Id. at 114.

58. At the lowest disparity ratio (three-person house­holds paying rent between $900 and $1,400), house­holds with children were more than three times likely to be adversely impacted by the rule in comparison to households with no children. Id. at 126.

59. Id. at 127-28. The FHA permits housing providers to follow “reasonable local, state, or federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling.” 42 USC 3607(b)(1).

60. Connecticut Fair Housing Ctr v Corelogic Rental Property Solutions, 478 F Supp 3d 259 (D Conn, 2020).

61. Id. at 274.

62. Id. at 273.

63. Id. at 278, 296-99, 287 n 18, 304 (citing HUD’s Office of General Counsel, Application of Fair Housing Act Standards to the Use of Criminal Records by Pro­viders of Housing and Real Estate-Related Transactions (2016); HUD PIH Notice 2015-19, Guidance for Public Housing Agencies (PHAs) and Owners of Federally-As­sisted Housing on Excluding the Use of Arrest Records in Housing Decisions, at 3-4 (2015).