The Department of Housing and Urban Development (HUD) has proposed new rules for fair housing “disparate impact” claims. Disparate impact looks at broader systems to see if discrimination is endemic rather than any specific transaction.

HUD’s proposed rule would allow defendants accused of disparate impact discrimination claims to only demonstrate that their algorithms don’t use coding substitutes or close proxies for protected classes. It would also allow housing providers to avoid liability for algorithmic discrimination if they use algorithmic tools overseen by a third party.

In response to the proposal, Sen. Cory Booker (D-NJ), sent a letter of protest to HUD Secretary Ben Carson.

In 1969, Booker’s parents, who are African-American, were involved in a “real estate steering” case and “steered” away from certain neighborhoods. With the help of the local Fair Housing Council and a sting operation, the Bookers won their case, but the senator says he’s been involved in fair housing issues since then.

In the letter sent to HUD, Booker said that algorithmic bias rarely stems from a single protected characteristic, but instead arises from incomplete data sets and historic human biases. He cited HUD’s decision to sue Facebook as an example.

He also criticized the shifting of blame to third-party vendors that provide the algorithm decision-making tool, saying it “outsources the liability for housing discrimination.”

“Should the administration enact the proposed rule, millions of Americans could be subject to housing discrimination without recourse,” Booker said in the letter. “Allowing lenders, landlords, and Realtors to outsource the liability for housing discrimination ensures they will ignore discriminatory outcomes and actually incentivizes them to avoid asking their vendors questions.”

© 2019 Florida Realtors®