Fair Housing Laws: Who Do They Protect?

The Fair Housing Act is a federal law that prohibits discrimination in most housing-related activities, including buying, selling, renting, or financing. It protects individuals from discrimination when renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities. The Act covers a wide range of housing types, including rental housing, home sales, and mortgage lending, and applies to direct providers of housing, such as landlords and real estate companies, as well as other entities such as banks, insurance companies, and lending institutions.

The Act makes it illegal for landlords to refuse to rent to someone or to discriminate against a tenant based on race, colour, religion, sex, familial status, national origin, or disability. It also prohibits discrimination in the terms, conditions, and privileges of rental agreements.

Individuals who believe they have been victims of housing discrimination can file a complaint with the Department of Housing and Urban Development (HUD) or initiate a lawsuit in federal or state court. HUD will investigate the complaint and pursue legal action on the individual's behalf if necessary.

Discrimination in housing sales and rentals

In addition to direct providers of housing, the Fair Housing Act also prohibits discrimination by other entities such as municipalities, banks, lending institutions, and homeowners insurance companies, whose practices may make housing unavailable to certain individuals. For example, banks may impose more stringent underwriting standards or provide less favourable loan terms for individuals based on their race, colour, religion, sex, national origin, or disability.

The Fair Housing Act also provides protections for individuals facing discrimination in mortgage lending and home improvement loans. It is illegal for lenders to refuse to make a mortgage loan, provide financial assistance, or offer different terms or conditions based on the protected characteristics listed above. Additionally, individuals facing discrimination in housing sales, rentals, or lending may file a complaint with the Department of Housing and Urban Development (HUD) or file their own lawsuit in federal or state court.

While housing discrimination is illegal, it can be challenging to prove. Individuals who believe they have been victims of housing discrimination are advised to document their experiences, gather evidence, and seek legal advice. Fair housing groups and local human rights commissions can also provide assistance and send out testers to gather evidence of disparate treatment.

Discrimination in mortgage lending

Despite these laws, discrimination in mortgage lending still occurs. A 2021 study found that minority borrowers were charged interest rates that were nearly 8% higher and were rejected for loans 14% more often than privileged groups. This type of discrimination has far-reaching consequences, contributing to the racial wealth gap and hindering housing fairness.

There are three types of lending discrimination: overt discrimination, disparate treatment, and disparate impact. Overt discrimination is blatant and easy to recognise, such as refusing to consider Social Security income for a person with a disability. Disparate treatment involves differences or inconsistencies in treatment based on prohibited factors, such as taking longer to approve minority applicants. Disparate impact occurs when a lender applies a policy consistently, but it has a disproportionate negative impact on a protected class.

If you believe you have been a victim of lending discrimination, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) or the U.S. Office of Fair Housing and Equal Opportunity (FHEO). You can also contact your state attorney general's office to see if the creditor has violated state laws.

Discrimination in housing assignments, leases, and subleases

Discrimination in housing is illegal in nearly all housing scenarios, including private housing, public housing, and housing that receives federal funding. The Fair Housing Act prohibits discrimination in housing assignments, leases, and subleases based on race, colour, religion, sex, disability, familial status, or national origin.

In the US, the Fair Housing Act applies to "dwellings", including homes, apartments, condominiums, cooperatives, mobile homes, and other manufactured homes. The Act makes it illegal for an owner to refuse to rent to someone or to otherwise discriminate against a tenant on any of the protected bases. This means that landlords may not discriminate in the rental or in the terms, conditions, and privileges of rental of a dwelling unit to any renter because of a handicap of that renter or any person associated with them. Landlords must also allow reasonable modifications to be made to the premises to accommodate handicapped persons, at the expense of the handicapped person.

In California, for example, there are strict laws prohibiting various types of discrimination in leasing, and landlords must comply with these prohibitions or face severe penalties. California law prohibits discrimination based on race, colour, religion, sex, sexual orientation, marital status, national origin, ancestry, source of income, or disability.

When it comes to subleases and lease assignments, landlords should be aware of the following:

• It is best to include a clause in the lease specifying whether subleases are allowed and if so, requiring the tenant to obtain written permission and meet certain criteria before subleasing.
• Landlords should screen potential subtenants and assignees, even if the time left on the lease is short.
• A sublease can provide the benefit of an uninterrupted stream of income for the rental unit, but it may be difficult to enforce the terms of the lease in the event of any violations.
• With an assignment, the assignee assumes the legal place of the original tenant in the lease, meaning they rent directly from the landlord. This provides the landlord with the advantage of uninterrupted income and the ability to pursue legal action against the assignee in the event of a violation.
• Landlords can protect themselves by stating in the lease how subleases and assignments are reviewed, including the right to approve or deny these requests.
• All sublease and assignment agreements must comply with fair housing laws to avoid discrimination issues.

Discrimination in housing advertising and marketing

The law covers a broad range of media, including applications, flyers, brochures, deeds, signs, banners, posters, billboards, and even pictures in an office. It also includes verbal statements made in writing, over the phone, or in person. Expressing an illegal preference or limitation to fellow agents, brokers, employees, prospective sellers, renters, or any other person in connection with the sale or rental of a property is prohibited.

For example, a statement like "only real Americans live here" or advertising with pictures that only show young, white residents without children or people of different races or nationalities, can be considered a violation. Using phrases like "no children" or indicating a religious preference, such as advertising for a "Christian roommate," is also prohibited.

Certain types of affirmative fair housing marketing are required by federal law, especially for applicants seeking to participate in HUD's subsidized and unsubsidized housing programs. This is to ensure that individuals of similar income levels have a similar range of housing choices, regardless of their race, colour, religion, sex, disability, familial status, or national origin.

If an individual believes they have experienced housing discrimination in advertising or marketing, they can file a complaint with the Department of Housing and Urban Development (HUD) or file their own lawsuit in federal or state court.

Discrimination in housing insurance

The Act applies to "dwellings", including homes, apartments, condominiums, cooperatives, mobile homes, and other manufactured homes. It covers most housing, but there are some limited exemptions, including owner-occupied buildings with no more than four units and single-family houses sold or rented by the owner without an agent.

Housing insurance companies are considered direct providers of housing, and as such, they are prohibited from discriminating against individuals by refusing to provide insurance or by providing different terms or conditions based on the protected characteristics listed above.

To address discrimination in housing insurance, individuals can file a complaint with the Department of Housing and Urban Development (HUD) or file their own lawsuit in federal or state court. The Department of Justice also brings suits on behalf of individuals based on referrals from HUD. State Insurance Departments should also play a role in investigating insurers and enforcing fair practices.

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