Support Needed for Fair Housing Bill HB1239 in the Current Maryland Session!

 

The Fair Housing and Housing Discrimination - Regulations, Intent, and Discriminatory Effect Bill is sponsored by Delegates Deni Taveras (D-47B), Mary A. Lehman (D-21), Joe Vogel (D-17), Nick Allen (D-8), Julian Ivey (D-47A), Joseline A. Peña-Melnyk (D-21), and Jamila J. Woods (D-26). Go to https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB1239?ys=2025RS to read the Official Document.

The bill was originally assigned to the House Environment and Transportation Committee. Its effective date would be October 1, 2025. It currently is in the House of Delegates, and a House Environment and Transportation Committee hearing about the bill is scheduled for February 28th at 1:00 p.m.

HB1239 authorizes the Maryland Department of Housing and Community Development to adopt certain regulations related to affirmatively furthering fair housing; providing that certain discriminatory housing practices may be committed without intent; prohibiting a person from acting in a certain manner that has a discriminatory effect against a person related to the sale or rental of a dwelling; and providing that certain conduct does not constitute a certain violation.

This bill enhances fair housing protections in the state of Maryland by expanding the Department of Housing and Community Development's responsibilities and clarifying housing discrimination regulations. The bill requires the Department to administer housing programs in a way that "affirmatively furthers fair housing" and to collaborate with nonprofit and governmental entities committed to fair housing goals. Most importantly, the legislation introduces a new legal standard that allows claims of housing discrimination to be proven even without demonstrating intentional discrimination, meaning that practices with a discriminatory effect can be challenged regardless of the actor's intent. This statement refers to the legal concept of "disparate impact" in housing discrimination.

Disparate impact theory is a key legal principle in fair housing enforcement, ensuring  that policies or practices that disproportionately harm protected groups - regardless of intent - can be challenged under the law. Unlike cases of overt discrimination, disparate impact cases address systemic inequities that come from seemingly neutral policies. This doctrine is crucial for addressing racial disparities in housing, zoning laws that disproportionately exclude certain populations, and lending practices that result in unequal mortgage approvals. The U.S. Supreme Court upheld the use of disparate impact claims in Texas Department of Housing and Community Affairs v. Inclusive Communities Project (2015), affirming that policies with discriminatory effects can violate the Fair Housing Act, even in the absence of intentional discrimination. California, New York, and Illinois have state-level disparate impact protections similar to what this bill proposes.

The bill specifically prohibits various discriminatory practices in housing, such as refusing to rent or sell, making discriminatory statements, or providing unequal services based on characteristics like race, color, religion, sex, disability, marital status, sexual orientation, gender identity, national origin, source of income, or military status. 

The bill also provides a defense for actions that meet three conditions: the action was without discriminatory intent, was justified by legitimate business necessity, and could not have been accomplished through less discriminatory means. 

The legislation empowers aggrieved persons to file civil actions and allows for remedies including damages and injunctive relief, with the Attorney General granted broad investigative and prosecutorial powers to address civil rights violations in housing.

Read the BillTrack50 summary.

Read the proposed bill.

New Jersey proposes new disparate impact discrimination rule

 

New Jersey Attorney General Matthew J. Platkin and the New Jersey Division on Civil Rights have announced a proposed rule describing and clarifying the prohibitions against disparate impact discrimination under the New Jersey Law Against Discrimination (LAD). The proposed rule clarifies the legal standard for disparate impact discrimination and the burdens of proof in claims in the housing, financial lending, employment, places of public accommodation, and contracting. The proposed rule largely codifies existing state and federal case law and provides examples of policies and practices that may result in a disparate impact on members of a protected class under the LAD.

New Jersey’s proposed LAD prohibits conduct that expressly treats people differently based on their membership in a protected class and policies or practices that have a negative impact on members of a protected class. Under the LAD, even policies or practices that are neutral on their face and that do not single out a protected class for different treatment may violate the LAD if they have a disparate impact on protected class members.

Proposed rule

The proposed rule is intended to clarify that the LAD prohibits practices or policies that result in a disproportionately negative effect on members of a protected class, even if such practices or policies are not intended to discriminate, unless it is shown that such are necessary to achieve a substantial, legitimate, nondiscriminatory interest and there is no less discriminatory, equally effective alternative that would achieve the same interest. The proposed new rule provides the standard for determining whether a practice or policy is unlawfully discriminatory, and the burden-shifting framework applied to the standard for disparate impact claims arising in specific contexts. The proposed rule covers how liability for disparate impact may apply to many examples of policies and practices.

Subchapter 4 regards housing and housing financial assistance. A proposed burden-shifting framework putting the burden of showing that there is not a less discriminatory, equally effective alternative means of achieving the housing provider’s or lender’s substantial, legitimate, nondiscriminatory interest on the respondent at the final stage of the burden-shifting test. If the complainant can show the practice or policy results in a disparate impact on members of a protected class, the respondent must show that the challenged practice or policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest and that there is not a less discriminatory, equally effective alternative means of achieving that.The respondent may, but is not required to, identify what policy or practice options it considered and how and why it decided to select the policy or practice.

 Here are some examples of policies and practices that may have an unlawful disparate impact: 

• Minimum income requirements.
• Financial standards, or income standards that have a disparate impact on people seeking to pay rent with forms of government low-income rental assistance; Excluding applicants based on criminal or credit history.
• Automatically refusing all rental housing applicants who have no credit score or a score below a minimum threshold.
• Requiring a renter or buyer to violate or forgo a sincerely held religious practice or observance.
  

This framework aligns with how New Jersey courts and the New Jersey Division of Civil Rights have applied disparate impact liability. Placing the burden on the respondent to prove no less discriminatory alternatives exist is appropriate “in light of the particularly stark information asymmetry between housing providers and victims of housing discrimination, as housing providers are far more likely to have access to information about the challenged practice or policy, their interests, what potential alternative practices or policies are available, and whether an alternative could serve their interests while having less discriminatory effects.” Increased use of tenant screening reports and online platforms in housing sale and rental markets have made it especially difficult for complainants to access information about specific housing providers’ policies and practices, and that there is a significant imbalance in access to legal representation in housing cases, as landlords have legal representation in 90% of housing cases involving eviction, while less than 10% of renters have legal representation in such cases.

The proposed rule also would apply to the practices and policies of real estate brokers, agents, salespersons, property management, and lending institutions. For lending institutions, this includes making available or unavailable the provision of housing financial assistance, establishing financial assistance terms or conditions, and the creation and application of criteria requirements, procedures, or standards for the review and approval of real estate transactions, with the exception of evaluations of an applicant’s consumer credit history where required for a federal loan product or formula or practices or policies that enforce federal guidelines.

Read the June 4, 2024 VitalLaw article. 

Read the June 14, 2024 Fox Rothschild LLP article.