April 29, 2021

A Primer on the Fair Housing Act

fair housing - family

Blog authors: Jarrod Elwell, Senior Director at Enterprise, and Rachel Bogardus Drew, Research Director at Enterprise. 

This piece is part of our blog post series, Policy Actions for Racial Equity (PARE), which explores the many ways housing policies contribute to racial disparities in our country.   

On April 11, President Biden issued a proclamation stating, “The purpose of the Fair Housing Act was to put an end to inequities in our housing system and eliminate racial segregation in American neighborhoods.” Yet in the 53 years since the Act was passed, it has largely failed to meet these goals. In this blog post, we take a deeper look at why this is, dissect two key aspects of the Act that contribute to its ineffectiveness, and discuss some recent developments with the potential to finally realize the promise of the Fair Housing Act. 

History and Context for the Fair Housing Act 

When President Lyndon Johnson signed the Fair Housing Act (officially, Title VIII of the Civil Rights Act of 1968) on April 11, 1968, overt and implicit discrimination against racial and ethnic groups had long been rampant in both public policy and private housing practices. These included the use of redlined maps to restrict eligibility for federally insured home mortgages, blockbusting by real estate agents to induce white flight, and placing segregated public housing developments in communities that were previously integrated.  

The result of these practices, and the centuries of racist policies that preceded them, was the systematic exclusion of Black, Indigenous, and other people of color (BIPOC) from accessing better housing, neighborhoods, and wealth-building opportunities, leading to widespread racial disparities in both housing and non-housing outcomes. Housing discrimination was also one of the chief concerns raised by the civil rights movement, and was cited by the Kerner Commission as a major source of the civil unrest that broke out in many American cities in the 1960s. Among its findings, the Commission concluded, "What white Americans have never fully understood — but what the Negro can never forget — is that white society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it."  

Yet despite this acknowledgment, the Fair Housing Act was the last of the landmark civil rights legislation passed that decade, lagging policies that codified equal rights to voting, employment, and public accommodations. Opponents of the Act claimed that any federal intrusion into the housing market was not just antithetical to the capitalist economy on which most real estate transactions were based, but a threat to the (white) American Dream of community choice and property ownership. The Act, as implemented, failed to address some key sources of disparities in housing markets and provided little in the way of real relief to BIPOC communities seeking equitable access to housing and neighborhoods.   

What the Fair Housing Act Does (and Does Not) Cover 

The Fair Housing Act, simply stated, prohibits any policy or practice restricting access to housing that discriminates against members of one or more protected classes. Initially, those classes included groups defined by race, color, religion, and national origin; additional protections on the basis of sex (recently amended to include LGBTQ status), familial status (presence of children) and disabilities were later added. Individual cities, counties, and states have also identified additional protected classes.  

The Fair Housing Act had two prongs; the first prohibited discrimination in all real estate related transactions, including the sale, rental and financing of housing. It did not, however, address the legality of practices that, while not designed to intentionally discriminate against a protected class, nonetheless have a disparate impact on such groups. These include policies or practices that restrict housing access on the basis of non-protected conditions with strong, systemic correlations with certain subpopulations – for example, a landlord who refuses to rent to anyone with a criminal record will disproportionately reject applications from Black and Latine renters, who are more likely to have prior involvements with the justice system. 

The second prong, often referred to as the unfulfilled promise of the Act, requires Federal, State, and local governments to proactively address the discriminatory systems and structures that denied members of protected classes equitable access to the housing and neighborhoods of their choice, and to do so in a manner that affirmatively furthers the policies of the Fair Housing Act. Yet the legislation did not specify any standards or mechanisms for how governments should assess, identify, and correct existing patterns of segregation within their communities. As such, this element of the Act has largely been ignored over most of the half century of its existence.  

These two omissions from the Fair Housing Act – disparate impacts from non-discriminatory practices, and the responsibility of governments to affirmatively further the goals of the Act – continue to contribute meaningfully to discriminatory outcomes in housing to this day. We dig a little deeper into each issue below. 

Disparate Impact 

In 2013, the Obama Administration sought to remedy the first of these issues, by formally incorporating into the Act what dozens of court rulings had already determined: that housing practices with disparate impacts on protected groups (as well as those that increase or perpetuate segregation) could be held as violations of federal fair housing law. A subsequent Supreme Court case in 2015 further supported this position, finding that the “recognition of disparate impact claims is consistent with the [Act’s] central purpose.” The Court ruling further established a process under which disparate impact claims could be made, which included demonstrating direct causality between a policy or decision and observed discriminatory outcomes.  

The standard for establishing causality, however, was not defined until the Trump Administration issued a rule in 2020 that placed an impossibly high burden on plaintiffs to bring any fair housing claims forward. This included proving the purpose of the practice could have been achieved without causing a disparate impact, that the defendant would not have been materially or financially disadvantaged by a different approach, and that any potential defense of the practice would not absolve the defendant of having committed a violation.  

The 2020 rule also specifically removed the language from the 2013 rule with respect to practices that perpetuate existing segregation and offered additional protections to entities that use third-party data to make decisions about to whom to sell, rent, or lend. A challenge to the 2020 rule, however, prevented its implementation during the prior administration.  

Affirmatively Furthering Fair Housing (AFFH) 

From our nation’s forming through the civil-rights era, segregation was largely created by federal and local governments. By the 1950s, the Supreme Court had decided that redlining, racially restrictive covenants and racial zoning were all unconstitutional. Yet, there was no explicit commitment or obligation for government to undo the impact of the housing systems and structures that treated BIPOC people as less than white people by denying them the same access to wealth-building opportunities.  

The Fair Housing Act sought to change this pattern, proclaiming that it is “the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States.” The purpose of this mandate was to ensure that recipients of Federal financial assistance – including states, insular areas, and local governments, and public housing agencies – affirmatively work to further fair housing. Without explicit instructions on how to accomplish this, however, most recipients have failed to do more than simply not discriminate. Consequently, few recipients of federal funding took any meaningful actions to address segregation and related barriers for those protected by the Act.  

As with the disparate impact rule, the Obama Administration again sought to address this weakness of the Fair Housing Act, and in 2015 issued a landmark regulation to implement the affirmatively furthering fair housing (AFFH) requirements of the Fair Housing Act. This change required, among other provisions, recipients of federal housing funds to complete a fair housing plan with measurable goals (no less frequent than every five years) and to report on the status of their efforts, annually, to reverse entrenched patterns of segregation in their communities or risk suspension/reductions in their federal funding allocations.  

However, on January 5, 2018, Department of Housing & Urban Development (HUD) suspended implementation of the agency’s 2015 AFFH regulation and, in August 2020, the Trump Administration rescinded the AFFH regulation and replaced it with Preserving Community and Neighborhood Choice. The new rule allowed HUD’s program participants to simply self-certify that they affirmatively furthering fair housing without requiring documentation or proof of their efforts.  

Recent Developments 

Following on these two moves by the prior administration to further weaken the Fair Housing Act, the Biden Administration has worked quickly to address these challenges to the 2013 disparate impact standard and the 2015 AFFH requirements under the Act. To that end, earlier this month the new HUD secretary Marcia Fudge announced new draft rules to undo most of the proposed changes.  

Currently under federal review, these revised rules are expected to reinstate much of the Obama-era versions of these provisions, as part of the new administration’s commitment to advancing racial equity. If implemented, these changes have the potential to finally realize the original purpose of the Fair Housing Act. 

We encourage all who believe in creating a just society to read, discuss, and share the PARE blog series as we learn and act to address the impacts of housing policies on racial equity in America. We also invite you to join us in this conversation, by suggesting additional topics and sharing resources for how we can advocate for greater racial equity. If you’d like to offer feedback on our body of work, please reach out to the Public Policy team. You can also check out our blog and subscribe to our daily and bi-weekly policy newsletters for more information on Enterprise’s federal, state, and local policy advocacy and racial equity work.  

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