By Garret DeReus
On April 23, 2025, President Donald Trump signed an Executive Order titled “Restoring Equality of Opportunity and Meritocracy” that has received nominal attention for its potential impact on the Fair Housing Act. This article examines the specific implications of this Executive Order for the Fair Housing Act’s disparate impact standard—a critical tool in fighting systemic housing discrimination. While an Executive Order cannot directly override existing regulations, the actions proposed by the Executive Order threaten to substantially weaken fair housing enforcement across the United States.
Understanding the Executive Order
The Executive Order explicitly states its purpose is “to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” This sweeping language targets disparate impact theory in its entirety, describing it as “wholly inconsistent with the Constitution” and claiming it “threatens the commitment to merit and equality of opportunity that forms the foundation of the American Dream.”
While the Fair Housing Act is mentioned only once by name in Section 6(b), the Order’s broad language encompasses all disparate impact enforcement mechanisms. The Order directs the Secretary of Housing and Urban Development to “evaluate all pending proceedings that rely on theories of disparate-impact liability and take appropriate action with respect to such matters consistent with the policy of this order” within 45 days.
Section 5 requires the Attorney General, in coordination with all agency heads, to report within 30 days: “all existing regulations, guidance, rules, or orders that impose disparate-impact liability or similar requirements, and detail agency steps for their amendment or repeal.” This would necessarily include HUD’s disparate impact regulation at 24 CFR § 100.500.
Additionally, Section 6(c) mandates that “all agencies shall evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability” within 90 days and “take appropriate action” in line with the Order’s policy of elimination.
The Critical Role of Disparate Impact in Fair Housing Enforcement
The Fair Housing Act’s disparate impact standard, codified in HUD’s regulation at 24 CFR § 100.500, serves as a vital enforcement mechanism for addressing systemic housing discrimination that might otherwise go unchallenged. This standard allows for addressing facially neutral policies that disproportionately harm protected groups, even when discriminatory intent cannot be proven.
The Supreme Court confirmed the validity of disparate impact claims under the Fair Housing Act in its landmark 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project. Justice Kennedy, writing for the majority, recognized that disparate impact claims are “consistent with the FHA’s central purpose” of eradicating discriminatory practices in housing.
Importantly, the disparate impact theory of the Fair Housing Act also provides crucial protections for individuals with disabilities. If a housing provider implements methods of administration that disproportionately screen out persons with disabilities—but not non-disabled persons—disparate impact theory provides a tool to investigate and potentially bring a claim for relief. Without this approach, housing policies that appear neutral on their face but have discriminatory effects on people with disabilities could remain unchallenged.
Not Easy Cases
Contrary to the notion suggested in the Executive Order that disparate impact claims are easy to prove, they are actually incredibly difficult to establish on the front end prior to filing suit. These cases rely not on individual narratives, but on statistical models and data analysis. Getting the data for these models can be extremely labor intensive, often requiring extensive records requests, compilation of complex datasets, and sophisticated analysis. This work typically needs to be vetted by experts in statistics or economics, and there is no guarantee before the data collection and analysis occurs that this substantial investment will yield actionable results.
Therefore, disparate impact claims are more likely to be thoroughly vetted before they are ever filed, given the significant time and monetary investment required. While successful disparate impact cases might create the impression that these claims are frequently successful, it should be considered that very few disparate impact claims are filed each year. When they are filed, they are more likely to succeed precisely because of the extensive work and vetting that occurs on the front end. Attorneys like those at Fair Housing centers, who specialize in these complex cases, understand the substantial resources required and thus pursue only the most meritorious claims.
A case out of the Eastern District of Louisiana provides an illustration of the evidentiary standard plaintiffs face in proving disparate impact claims. In Treece v. Perrier Condominium Owners Association (2021), the plaintiffs challenged condominium occupancy limits (requiring 250 or 400 square feet per occupant) as discriminating against families with children. Despite successfully demonstrating statistical disparities between the effect on families with children versus households without children, the plaintiffs ultimately failed because they could not establish “robust causation” – a key requirement established by the Supreme Court in Inclusive Communities. The court ruled that the plaintiffs needed to prove the occupancy limits themselves caused families with children to be the dominant group affected, rather than this being a pre-existing demographic pattern. This case illustrates that disparate impact claims do not create “near insurmountable presumption of unlawful discrimination” as claimed in the Executive Order. Instead, in a disparate impact case, as in virtually all cases, a plaintiff must come forward with sufficient evidence to prove their claim.
Potential Consequences of the Executive Order for Fair Housing
The Executive Order is likely to have major impacts on the Fair Housing Act, including governmental litigation efforts, the regulatory framework, and private enforcement efforts.
First, it is reasonable to presume that the Department of Justice will withdraw from, or dismiss, pending disparate impact cases, and it will decline to initiate new cases based on this theory. Section 4 explicitly directs all agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability.” More concerning is the possibility that the DOJ might begin intervening on behalf of defendants in private disparate impact suits, effectively switching sides in ongoing litigation.
Second, HUD may initiate the process to repeal 24 CFR § 100.500 through notice and comment procedures. While this process takes time and could face legal challenges, the uncertainty created during this period will disrupt ongoing enforcement efforts. Attorneys at Fair Housing centers, who are often on the front lines of litigating cases alleging disparate impact, will face significant obstacles in pursuing new claims.
Third, even without immediate regulatory changes, the Executive Order creates a chilling effect on private enforcement. Many potential plaintiffs and their attorneys may be dissuaded from pursuing disparate impact claims due to uncertainty about how courts will interpret the theory moving forward and unwillingness to commit resources to prolonged litigation with an unclear outcome.
Flawed Premise and Legal Risk
The Executive Order’s justification for targeting disparate impact rests on a fundamentally flawed characterization. It claims that “disparate-impact liability, which holds that a near insurmountable presumption of unlawful discrimination exists where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.”
This description bears little resemblance to how disparate impact actually functions under the Fair Housing Act. The regulation at 24 CFR § 100.500 specifically provides for a “legally sufficient justification” defense. Under this framework, defendants can defeat disparate impact claims by showing their practice:
- “Is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent,” and
- “Those interests could not be served by another practice that has a less discriminatory effect.”
Far from imposing “automatic liability,” the regulation creates a burden-shifting approach that allows defendants to justify practices with legitimate business needs, so long as those needs cannot be met through less discriminatory alternatives. The regulation provides balanced approach towards assessing conduct and safeguards against unwarranted liability.
The theory of disparate impact was explicitly evaluated by the Supreme Court in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, and the Court permitted the theory under the Fair Housing Act. The Executive Order broadly declares that disparate impact is “wholly inconsistent with the Constitution,” but fails to specify which constitutional amendment is supposedly violated by disparate impact, or in what way it is violated. This vague assertion, lacking in legal specificity, undermines the Order’s credibility as a constitutional analysis and suggests its assertion is political rather than legal.
While the decision in Inclusive Communities did not suggest there was anything constitutionally infirm about disparate impact, there is significant risk that Supreme Court would rule that the Fair Housing Act does not proscribe harm caused by disparate impact. In Inclusive Communities, the Court ruled on June 25, 2015, by a narrow 5-4 margin that disparate impact claims are cognizable under the Fair Housing Act. The dissenting opinion, authored by Justice Samuel Alito and joined by Chief Justice Roberts, Justice Scalia, and Justice Thomas, argued that “the Fair Housing Act never authorized such disparate impact claims in 1968, when the law was enacted, ‘and nothing has happened since then to change the law’s meaning.’” Since 2015, the Court’s composition has shifted significantly more conservative with the appointments of Justices Gorsuch and Barrett replacing Justices Scalia and Ginsburg respectively, while Justice Kennedy (who wrote the majority opinion) has been replaced by Justice Kavanaugh. Given this rightward shift in the Court’s makeup, if a case challenging disparate impact were to reach the Supreme Court today, there is substantial risk that the Court could reverse its 2015 decision in Inclusive Communities and restrict the Fair Housing Act to cover only intentional discrimination.
Potential Impact on Nursing Homes and Healthcare Housing
The Executive Order’s targeting of disparate impact liability could have significant implications for nursing homes and long-term care facilities, which can fall under the gambit of the Fair Housing Act. Nursing homes represent an intersection of healthcare and housing rights, particularly for elderly individuals and those with disabilities who rely on these facilities as their primary residence.
In theory, nursing homes can be subject to disparate impact claims when their policies—while facially neutral—disproportionately affect protected groups. For example, policies regarding admission criteria or transfer procedures might appear neutral but could have discriminatory effects on certain populations.
The elimination of disparate impact liability could weaken protections for individuals in nursing home settings. For patient rights advocates, the Executive Order creates immediate uncertainty about how to proceed with pending cases and whether to invest resources in investigating potential new claims. This ambiguity may result in fewer challenges to discriminatory practices at a time when our aging population makes access to fair and equitable long-term care housing increasingly crucial.
Given that this legal theory may be curtailed, patients and advocates should be vigilant about documenting potential discrimination. As the legal landscape evolves, it is important to have all information documented so that attorneys can evaluate said information and navigate a path through these uncertain legal seas.
Conclusion
President Trump’s Executive Order on disparate impact represents a significant threat to fair housing enforcement, but its implementation faces several obstacles. Courts have consistently recognized disparate impact as a valid method of proving discrimination under the Fair Housing Act, culminating in the Supreme Court’s Inclusive Communities decision. However, as is set forth above, the Supreme Court’s holding in Inclusive Communities could be reversed if a challenge were to reach the Court.
While the Executive Order threatens fair housing enforcement, the final outcome will depend on administrative actions and court decisions. Ultimately, the fate of the disparate impact theory under the Fair Housing Act will ultimately be decided by the Supreme Court.