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ment and disparate impact discrimination. Disparate treatment discrimination is defined as negative treatment of minority candidates due solely to the candidates' race. Disparate impact discrimination occurs when a system is put in place that is not discriminatory in intent, but negatively impacts a particular group of individuals. When housing providers deny or make housing unavailable to persons on the basis of characteristics not protected by the Fair Housing Act and when these characteristics are correlated with race, the result is disparate impact discrimination, not disparate treatment discrimination.

Disparate impact would occur, for example, if a lending institution did not finance older homes. In this case, the basis for denial would not be one of the classes protected by fair housing laws, and the policy would be universally applied. If racial minorities are much more likely to live in older homes than whites, however, the policy would exclude a higher proportion of racial minorities. Although whites and minorities would be treated similarly, the policy would adversely impact the protected group and thus constitute a form of discrimination. The housing provider would have to demonstrate that there was a business necessity for the policy and establish that there was no less discriminatory alternative that could serve the same business objective. Audit methodology is designed to measure only disparate treatment discrimination.

During his presentation, Gregory Squires, Department of Sociology, The George Washington University, suggested that, contrary to what some believe, paired testing can potentially uncover the existence of disparate impact discrimination in a given housing market. He asserted that, based on information provided to the minority and white auditors during the test, analysts can observe instances of disparate impact not recorded as disparate treatment. For example, the housing provider might share with the auditor information about the agency's policies and practices that may differ for minority and white home seekers. This information would not necessarily appear on the auditor's forms, but would be part of the narrative the auditor provided to the researchers. Though the policies highlighted would be applied to both minority and white auditors, they could differentially impact minority home seekers.

A related discussion addressed the ability to measure discrimination statistically given the legal definition. Some individual and household characteristics that are associated with disparate effects have a disparate impact because their distributions vary with race. As noted earlier, for enforcement audits, testing coordinators control for other factors to isolate the