NAHB Supports Challenge to HUD’s Rule-Making Authority

Legal
Published
Contact: Thomas Ward
[email protected]
VP, Legal Advocacy
(202) 266-8230

NAHB recently filed an amicus brief in National Association of Mutual Insurance Companies v. Department of Housing and Urban Development at the U.S. Court of Appeals for the District of Columbia. The case involves a challenge by the insurance industry to HUD’s Disparate Impact Rule. The rule has a long history dating back to the Obama administration.

In 2013, HUD published a rule formalizing a “burden-shifting” test for determining whether a housing practice being challenged in court has an unjustified discriminatory effect.

Under the test, the plaintiff must first prove a challenged practice caused or predictably will cause a discriminatory effect. If the plaintiff meets its burden of proof, then the defendant must prove the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests. If the defendant meets this burden, then the plaintiff may still prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.

The current version of the rule, promulgated early in the Biden administration, basically recodifies the 2013 rule.

On May 8, NAHB filed an amicus brief in the case challenging HUD’s authority to issue the rule. NAHB explained that the rule establishes judicial procedures and evidentiary standards that are usually created by courts.

Furthermore, NAHB argued that HUD exceeded its authority because Congress did not provide it with a clear statement allowing it to develop rules for the judiciary. Because the Constitution allows the executive branch to choose judges, if it can also set the rules for how those judges must try cases, too much power is concentrated in one branch of government.

Finally, one of the reasons HUD provided for developing the rule was that the federal Courts of Appeals were not in agreement on procedures/standards to be used when trying disparate impact cases. NAHB pointed out that when Courts of Appeals disagree, it is the Supreme Court that resolves the split, not federal agencies.

Briefing in this case should be complete by the end of July, and oral argument is expected before the end of the year.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economic Indicators

Aug 12, 2025

Core Inflation Accelerates Amid Tariff Pressure

Core inflation picked up to its largest monthly increase since January and fastest annual pace since February. Meanwhile, housing inflation continued to show signs of cooling.

IBS

Aug 12, 2025

2026 Show Home Takes Shape in Orlando

Construction is moving full-speed ahead on The New American Home 2026. Located in Winter Park, Fla., this ambitious project is implementing cutting-edge design while sticking to an aggressive timeline — and the build team has no intention of slowing down.

View all

Latest Economic News

Economics

Aug 11, 2025

Market Share for Modular and Other Non-Site Built Housing in 2024

The total market share of non-site built single-family homes (modular and panelized) was just 3% of single-family homes in 2024, according to completion data from the Census Bureau Survey of Construction data and NAHB analysis.

Economics

Aug 08, 2025

Foundation Types in 2024: Slabs Continue to Rise, Crawl Spaces Decline

In 2024, 73% of new single-family homes started were built on slab foundations, according to NAHB analysis of the U.S. Census Bureau’s Survey of Construction (SOC).

Economics

Aug 08, 2025

Weaker Demand for Residential Mortgages in Second Quarter

In the second quarter of 2025, overall demand for residential mortgages was weaker, while lending standards for most types of residential mortgages were essentially unchanged, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS).