NCLA Backs HUD’s Rescinding Disparate Impact Liability Rule that Fair Housing Act Never Supported

Comments Re: Proposed Rule to Rescind Disparate Impact Liability Under the Fair Housing Act

Washington, D.C., Feb. 13, 2026 (GLOBE NEWSWIRE) -- The New Civil Liberties Alliance submitted official comments today supporting the Department of Housing and Urban Development’s proposal to rescind its “Disparate Impact Liability Rule” first imposed in 2013. Under the rule being rescinded, you could be punished for selling, renting, or making other housing decisions about your property that more negatively impact people of one race, religion, sex, disability, family status, or national origin than another, even if you did not intend to discriminate. NCLA encourages HUD to rescind the rule, restoring neutral and nondiscriminatory housing standards nationwide.

The Fair Housing Act of 1968 (FHA) makes it illegal to discriminate against anyone in home sales or rentals “because of” factors such as “race, color, religion, familial status, or national origin.” Under a plain reading of the text, the statute only bars disparate treatment. Thus, it does not create liability for housing transactions that simply happen to have a disparate impact—affecting people in a listed category more negatively—where discrimination was not intended. Discrimination “because of” a category means a property owner is motivated by discriminatory intention against someone in that category. Disparate impact in housing transactions can be due to many unintended reasons.

Nonetheless, the U.S. Supreme Court upheld disparate impact liability under the FHA in its 2015 Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc. decision. That narrow 5-4 decision, authored by Justice Kennedy, was based on two flawed earlier decisions that were largely decided based on deference to government agencies’ interpretations of other anti-discrimination laws passed by Congress. The Supreme Court ended that type of agency deference going forward in 2024 when it overturned the Chevron doctrine in NCLA’s landmark Relentless v. Dept. of Commerce case. Therefore, although Inclusive Communities found disparate impact liability to be permissible under the FHA, HUD is not required to keep the Disparate Impact Liability Rule in place, which does not reflect the best interpretation of the statute’s text. Instead, HUD is permitted to rescind its existing rule.

NCLA released the following statements:

“Nothing in Inclusive Communities or its predecessor cases prevents HUD from enacting and enforcing only neutral policies.”
— Caitlin Moyna, Senior Litigation Counsel, NCLA

“Unelected bureaucrats may not unlawfully expand Congressionally-enacted laws to impose their policy whims on so-called disparate impact liability—or any other matter—through rulemaking.”
— L. Margaret Harker, Senior Litigation Counsel, NCLA

“The Fair Housing Act’s text bars disparate treatment, not disparate impact. Any HUD rule should do the same.”
— Mark Chenoweth, President, NCLA

For more information visit the comments page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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Joe Martyak
New Civil Liberties Alliance
703-403-1111
joe.martyak@ncla.legal

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