BILL NUMBER: S4067

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the executive law, in relation to codifying the dispa-
rate impact standard in the human rights law

 
PURPOSE:

This bill would codify the "disparate impact" standard for housing
discrimination cases under the New York State Human Rights Law, ensuring
the continued protection of New Yorkers even as the Department of Hous-
ing and Urban Development ("HUD") rule and federal case law establishing
disparate impact comes under attack, through the administrative process
and litigation.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill amends section 296 of the Executive Law, the
unlawful discriminatory practices section under the New York State Human
Rights Law, by adding a new subdivision 5-a to specify that practices
              

leading to discriminatory effect, even if such practices were not moti-
vated by discriminatory intent, would be considered unlawful discrimi-
nation.

Paragraph b of the new subdivision 5-a provides that this unlawful
discrimination would apply to the protected classes for the sale, rent,
or lease of a housing accommodation under the state's Human Rights Law
provisions in Section 296, subdivision 5 of the Executive Law.

Paragraph c of the new subdivision 5-a provides for what constitutes a
legally sufficient justification.

Paragraph d of the new subdivision 5-a specifies that the complainant
shall have the burden of proof that a practice being challenged would
have a discriminatory effect.

Paragraph e of the new subdivision 5-a specifies that a demonstration of
disparate impact may not be used as a defense against a claim of inten-
tional discrimination.

Section 2 of the bill sets forth the effective date.

 
JUSTIFICATION:

The federal Fair Housing Act (Title VIII of the Civil Rights Act of
1968) protects people from discrimination when they are renting or
buying a home, getting a mortgage, seeking housing assistance, or engag-
ing in other housing-related activities. At the state level, it is
enforced by the New York State Attorney General and the Division of
Human Rights ("DHR"). The Attorney General and DHR also can take action
against housing discrimination under the New York State Human Rights
Law.

The "disparate impact" (or "discriminatory effects") standard is essen-
tial to the enforcement of the Fair Housing Act, given that discrimi-
nation often hides behind facially neutral policies and practices.
Disparate impact is longstanding doctrine, supported by case law, that
provides for enforcement based on outcome-based evidence of housing
discrimination against protected classes, rather than requiring proof of
intent to discriminate.

The disparate impact standard was codified as a Federal agency rule by
HUD during the Obama Administration. The first Trump Administration
approved a new rule to effectively repeal disparate impact and make it
far more difficult, if not impossible, to prove housing discrimination.
In late 2020, however, the U.S. District Court in Massachusetts enjoined
implementation of the Trump rule. President Biden then restored the
Obama-era rule.

While the U.S. Supreme Court upheld disparate impact in its 2015 deci-
sion in Texas v. Inclusive Communities, its 5-4 majority included
Justices Kennedy and Ginsburg, both of whom have been replaced on the
Court by more conservative justices. More broadly, in its 2024 decision
in Loper Bright Enterprises v. Raimondo, the Supreme Court overruled 40
years of precedent (established in the 1984 Chevron decision) under
which federal courts had extended deference to federal agencies' reason-
able interpretations of statutes they enforced.

In the years ahead, disparate impact is almost certain to come under
attack, either from the second Trump Administration, or through liti-
gation, or both - and, as a result, fair housing enforcement nationwide
may be jeopardized.

This bill aims to protect New Yorkers from this outcome. Despite the
role that disparate impact has historically played in housing discrimi-
nation cases brought in New York, the standard itself is not currently
codified in the Human Rights Law. By doing so, we can ensure that robust
enforcement action against housing discrimination in New York can
continue under State law, come what may in Washington and in the courts.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all cases
alleging unlawful discriminatory practices constituting housing discrim-
ination occurring on and after such effective date. Effective immediate-
ly, the addition, amendment and/or repeal of any rule or regulation
necessary for the implementation of this act on its effective date are
authorized to be made on or before such effective date.