How is disparate impact proven in housing valuation or practices?

• A. Demonstrate a neutral policy causes a disproportionate adverse effect on a protected class, with evidence and justification.
• B. Demonstrate intentional discrimination beyond reasonable doubt.
• C. Disparate impact is not applicable to valuations.
• D. Use a policy that benefits a protected class.

Answer: (A)

Disparate impact is shown when a policy or practice that is neutral on its face leads to a disproportionate adverse effect on members of a protected class in housing valuation or related practices. In practice, you’d look at outcomes generated by the policy—such as appraisal values, loan decisions, or underwriting criteria—and compare them across groups to see if a protected class is disproportionately harmed. If the data reveal a meaningful disparity, you then consider whether the policy serves a legitimate business objective and whether that objective can be achieved without the discriminatory impact, or with adjustments that reduce the impact. This demonstrates that the policy, though neutral, has a harmful effect on protected classes and that there is a justifiable reason for it or viable alternatives.

This isn’t about proving intentional discrimination. It’s about showing that neutral rules can produce discriminatory results, and it requires evidence of the impact and a justification for the policy’s necessity (and sometimes consideration of alternatives).