This year has seen some major changes in the housing world due to President Trump’s executive order which focuses on deregulation. This order has created considerable changes in the way HUD approaches fair housing enforcement. While these changes are not necessarily bad, it is unclear for property managers to wade through these changes without a clear federal compliance guidance document. Our friends at Karsaz Law have provided us with a breakdown of what has changed, here is our interpretation as a leading property management company and housing provider.
President Trump’s executive order’s purpose was to reduce regulations, which included limiting how they use disparate impact in enforcements. What is disparate impact? This is when a policy is not intending to discriminate but still ends up harming a protected group more than others. It focuses on the effect of a policy, not the intent. Despite this, under the Fair Housing Act, disparate impact is still legally recognized. An executive order cannot change the law.
Following this executive order, HUD issued two memos and one letter, each taking away prior guidance and invalidating withdrawn documents.
Disparate Impact Memo:
The Disparate Impact Memo directs all HUD staff to shift resources toward cases with strong evidence of intentional discrimination. This memo revokes all guidance that is inconsistent with this new enforcement. Prior administrations treated disparate impact as a vital enforcement tool, this memo represents a considerable change in administration.
Criminal Screening Letter:
The letter was issued to Public Housing Authorities and to private owners with stakes in project-based rental assistance. This letter is set to reinforce the use of criminal background checks as a legitimate method of strengthening the obligation of housing providers to give a decent, safe, and affordable housing option. Along with this, the letter officially withdraws the 2015 Notice limiting reliance on arrest records, 2016 OGC guidance on criminal records under the FHA, and the 2022 FHEO memo on implementation of that guidance.
Service & Emotional Support Animal Memo:
This memo voids HUD’s 2013 and 2020 guidance on reasonable accommodation requests for service animals and emotional support animals. While taking away these guidance’s, the memo states the withdrawal is not final. This leaves the existing standards without federal guidance until HUD releases new documents. Read last week’s blog for more information on what this means.
Staying Compliant:
Property managers and housing providers must stay more diligent than ever to stay compliant and avoid legal issues. These changes directly affect the way HUD applies federal enforcement of the Fair Housing Act. Requirements at the state-level, including NERC enforcement, are to stay fully in effect and unchanged. Housing providers are vulnerable without federal guidance.
Providers who do not stay up to date with these changes are exposing themselves to more risk of state complaints and federal civil lawsuits that allege discrimination, including disparate impact, failure to accommodate and other Fair Housing Act violations.
These changes are not bad for the industry; in fact, its purpose is beneficiary. However, the changes are recent and the guidance that was taken away has no replacement which creates a legal void that is easy to fall into. Housing providers no longer have a clear federal standard to follow when it comes to criminal screening and assistance animal accommodations. Here at Sin City Real Estate & Management, it is our duty to stay updated with changes that affect our business and your investment.
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