5.2 Federal Fair Housing Law and Protected Classes

Federal fair housing law begins with the Fair Housing Act of 1968, enacted as Title VIII of the Civil Rights Act of 1968 and amended in 1974 and 1988. It prohibits discrimination in the sale, rental, financing, and advertising of housing. The Act is enforced by the Department of Housing and Urban Development (HUD).

A separate, older statute, the Civil Rights Act of 1866, prohibits all racial discrimination in property transactions with no exemptions. Because of Jones v. Mayer (1968), race-based discrimination can never be excused by any Fair Housing Act exemption. Treat any answer that excuses racial discrimination as wrong.

The Seven Federal Protected Classes

Memorize all seven. They were added across the 1968, 1974, and 1988 versions of the Act:

A crucial distractor set: age, marital status, occupation, and source of income are NOT federal protected classes. They appear constantly as wrong answers. Some states do add them, but on the national portion stick to the seven. A mnemonic many students use is "Renting Cheap Really Sucks, No Fun Day" for Race, Color, Religion, Sex, National origin, Familial status, Disability.

Prohibited Practices

The Act bans specific conduct. Know each term and its trigger word-for-word:

• Steering — directing buyers toward or away from neighborhoods based on protected-class status
• Blockbusting (panic selling) — inducing owners to sell by claiming a protected group is moving in
• Redlining — a lender refusing or worsening loan terms in certain areas based on protected characteristics
• Discriminatory advertising — stating any preference or limitation (e.g., "perfect for a Christian family")
• Refusing reasonable accommodations or modifications for persons with disabilities

Disability: Accommodation vs. Modification

A reasonable accommodation is a change in rules or policies — for example, waiving a no-pets rule for a service or assistance animal. The landlord generally bears the cost. A reasonable modification is a physical structural change, such as a wheelchair ramp or grab bars. The tenant usually pays for a modification and may have to restore the unit at move-out. Knowing which party pays is a frequent test point.

Limited Exemptions (and Why They Rarely Apply)

The Fair Housing Act has narrow exemptions, but they never apply to race and never apply when a real estate licensee is involved or discriminatory advertising is used:

• Single-family home sold or rented by an owner who owns three or fewer homes, with no broker
• Owner-occupied dwelling of four or fewer units — the true Mrs. Murphy exemption
• Religious organizations and private clubs limiting their own noncommercial housing to members

Housing for Older Persons (HOPA)

The familial-status protection has a carve-out for senior housing. 55+ communities (at least 80% of units with one occupant aged 55 or older, plus published policies) and 62+ communities (all occupants 62 or older) may lawfully exclude children. This is the only protected class with an age-based exemption — and it does not authorize discrimination on any other protected basis.

Enforcement and Penalties

A complaint must be filed with HUD within one year of the alleged violation, or a civil lawsuit filed in federal court within two years. HUD investigates and may refer the matter to an Administrative Law Judge or to the Department of Justice for a pattern of discrimination.

Remedies include actual damages, injunctive relief, attorney's fees, and escalating civil penalties (a first violation runs into the tens of thousands of dollars, with higher amounts for repeat offenders). Brokers must display the equal housing opportunity poster and logo; failure can be used as evidence of discriminatory intent.

The Statutes Behind the Protected Classes

Federal fair housing law is layered. The Civil Rights Act of 1866 bars all racial discrimination in property transactions with no exemptions — it is absolute. The Fair Housing Act of 1968 (Title VIII), as amended, adds race, color, religion, national origin, sex, familial status, and disability (handicap), and is the core of the seven federal protected classes. Familial status (households with children under 18, pregnant persons, those securing custody) was added in 1988, along with disability.

Note that age, marital status, sexual orientation, and source of income are not federal protected classes — though many states and localities add them, so a state-law question may list more classes than the federal seven.

Prohibited Practices Defined

The exam tests four named violations precisely. Steering is directing prospects toward or away from neighborhoods based on a protected class. Blockbusting (panic selling) is inducing owners to sell by suggesting that members of a protected class are moving in and will lower values. Redlining is a lender's refusal to make loans or insure property in certain areas based on the protected makeup of the neighborhood. Discriminatory advertising uses words or images signaling a preference.

The Civil Rights Act of 1866 and disability protections (including a duty to allow reasonable modifications and grant reasonable accommodations such as a service animal) have essentially no exemptions, so when a fact pattern involves race or disability, exemptions do not save the respondent.