Proposed Rule Bans Discrimination Based on Sexual Orientation or Gender Identity in HUD Assisted Projects

On January 24, 2011, HUD issued a proposed rule making it illegal for owners and managers of HUD-assisted housing or FHA-insured housing to discriminate on the basis of sexual orientation and gender identity. HUD has found significant evidence of discrimination against lesbian, gay, bisexual, and transgendered (LGBT) individuals and families. A number of states, including the District of Columbia, and more than 200 localities already ban discrimination against LGBT applicants and residents for housing.

This proposed rule does not make LGBT a protected class under federal fair housing law, since only Congress can make changes to that law; it applies only to HUD assisted programs – both multifamily and single family. Owners of non-HUD-assisted housing should keep in mind however that discrimination due to LGBT characteristics could result in a fair housing action under one of the seven protected classes, such as sex or disability. The best protections against such legal actions are occupancy policies that are fully non-discriminatory, except for legitimate reasons such as credit, criminal records, etc.

Comments on the proposed rule are due by March 25, 2011.