Fair housing and disparate impact – Supremes hear arguments


April is designated as Fair Housing Month. The timing for the commemoration is not arbitrary, but is the memorialization of the passing of the Fair Housing Act, which was enacted April 1968. According to HUD (hud.gov), “HUD hosted a gala event in the Grand Ballroom of New York’s Plaza Hotel” to celebrate the first year. Fair Housing Month celebrations held during April have become a “tradition” as events to remember the achievement became more prevalent. Fair Housing Month has become more than just recognition of the realization of passing a law; it has also become a celebration of diversity.

It’s January, and there’s an early buzz about Fair Housing; not because of any celebration or proclamation, but because of a case being considered by the Supreme Court of the United States. Oral arguments were heard last week by the Court in the matter of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. Although still obscure, the case may be one of the most important and controversial cases the Court will hear this year.

Amy Howe, in her January 6th article for SCOTUSblog (Will the third time be the charm for the Fair Housing Act and disparate-impact claims? In Plain English; scotusblog.com), succinctly described the case that emanates from Texas: “In 2008, the Project filed this lawsuit against the state agency.  It argued that the agency had allocated the tax credits in a racially segregated manner:  it disproportionately granted the housing credits in minority areas of the Dallas region, while at the same time disproportionately denying them in white areas of Dallas.  A federal district court agreed with the Project, finding that the agency’s allocation of tax credits violated the FHA because it had a disparate impact on minorities. Under the ruling, it did not matter whether the agency intended to discriminate against minorities; the effect was enough to violate the law.  The U.S. Court of Appeals for the Fifth Circuit agreed that a disparate-impact claim could be brought under the statute. The state then asked the Supreme Court to weigh in, which it agreed to do in October of last year.

Howe stated, that “The Fair Housing Act makes it illegal to ‘refuse to sell or rent . . . or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race…’” This is the third case “…in less than four years, the Supreme Court granted review to consider whether this language allows lawsuits based on disparate impact. A disparate-impact claim is an allegation that a law or practice has a discriminatory effect, even if it wasn’t based on a discriminatory purpose.” The first two cases were settled before oral arguments.

According to the National Fair Housing Alliance (nationalfairhousing.org), disparate impact “…is a legal doctrine under the Fair Housing Act which means that a policy or practice may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability…” and “…safeguards the right to a fair shot for everyone.”

The outcome could affect more just the policies of a Texas housing agency. Although the Court’s opinion may not be given until later this year; the outcome will surely be felt beyond the housing and lending industries.

By Dan Krell
© 2015

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