Disparate Impact: What in the world does that mean and why should I care?

Prosperity-Disp-Impact

The U.S. Supreme Court will hear a landmark case on Wednesday, January 21, 2015 and yet little know what the words ‘disparate impact’ mean or how greatly this decision will affect them and fair housing in every community.

Disparate Impact is a legal doctrine under the Fair Housing Act which means that a policy or practice may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability.

Wait, What?

Disparate impact theory safeguards the right to a fair shot for everyone.

Why Does It Matter?

Where you live determines where you work and how you get there, your access to healthcare, and the school your child attends. Unfortunately, policies and practices still exist that – intentionally or unintentionally – keep some people out of housing they can afford simply because of who they are. While we have made great strides in advancing fairness in the housing sector, segregation persists and there is still more work to be done. Everyone benefits from a housing market free from discrimination where the full participation of all Americans is possible. Additionally, from a business standpoint the disparate impact theory helps us maintain open markets free from discrimination – a critical component to the prosperity of America’s future. Discrimination disrupts our economy, causing inefficiency and instability by constraining the full economic participation of all hard-working Americans.

Can you explain by example?

An apartment complex only allows people with full-time jobs. This bars disabled veterans and other people with disabilities who may not be able to work full-time, even though they can afford the apartment. The complex could instead consider all income to assess someone’s ability to afford rent.

A city decides to prohibit all housing that would be affordable to working-class people, and that has the effect of excluding most or all people of color in that region. If the city cannot show a valid reason for its policy, or if a more fair and effective alternative is available, then the policy would have to be set aside under the disparate impact approach.

A lender has a policy of allowing its loan officers to overcharge consumers at the loan officer’s discretion. The result is that women are charged higher prices than their male counterparts—even though both have the same credit profiles. In a case like this, the lender would have to abandon the discretionary pricing policy and take steps to insure that women are not over-charged for lending products and services.

Ok, I know understand. What can I do about this?

You can make noise by:

  • Sharing this blog so more people understand
  • Share our Facebook post and re-tweet our tweets with hashtag #KeepHousingFair
  • Join us in DC on Wednesday, January 21, from 9:00 to 11:30 a.m. as we rally to Keep Housing Fair at the S. Supreme Court

Disp-Impact-Flyer-Twitter-final-draft-corrected

Here is some more explanation and history on this case from the Shelterforce blog.