In this case, an appeal was filed before the Supreme Court of the United States to decide the issue of whether or not disparate impact claims are cognizable (capable of being judicially heard and determined) under the Fair Housing Act in relation to federally subsidized affordable housing. This case deals with the issue of access to housing for minorities in opportunity-rich neighborhoods where residence offers better health, education and economic outcomes.
This case was initiated in 2008 when the Inclusive Communities Project (ICP), a non-profit group, sued the Texas Department of Housing and Community Affairs (TDHCA) in relation to a federal tax credit program used by states and local governments to build affordable housing. ICP claimed that the TDHCA perpetuated segregation in violation of the Fair Housing Act (FHA) by granting too many tax credits to new housing developments in predominantly black inner city areas and too few in primarily white suburban neighborhoods. It was alleged that this constituted discrimination on the basis of disparate impact. Disparate impact cases are brought when a policy or practice has a disproportionate effect upon a person or persons of a protected class which under the FHA includes race. Following lower court proceedings, TDHCA appealed to the Supreme Court to decide whether the District Court and Fifth Circuit Court of Appeals should have permitted the disparate impact claim under the FHA.
In a majority decision, and based on a wide range of factors, the Supreme Court ruled that the FHA prevents not only intentional discrimination in the housing market, but can also prohibit ostensibly race-neutral policies that have the effect of disproportionately harming minorities and other protected groups, even in the absence of explicit evidence of bias. The Court found that disparate impact liability can serve to “counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.” In the judgment, Justice Kennedy, writing for the majority, traces the problem of segregated housing patterns back to the mid-20th century, when various forms of racial discrimination in housing, precluded minority families from gaining access to resources, and walled-off black families in urban inner cities, all of which led to considerable social unrest in the 1960s. Ultimately the FHA was enacted to address the denial of housing opportunities to minorities. The decision acknowledges the FHA’s “continuing role in moving the Nation toward a more integrated society.” However, the judgment cautions that disparate impact claims cannot be asserted any time there are statistical disparities in the housing market. It is necessary in such a context to establish that housing policies caused that disparity, and that the policies do not advance another valid goal.
The Supreme Court has remanded the case for further proceedings. An important outcome of this case is that the Supreme Court ruled that disparate impact claims may be brought under the FHA and this interpretation is currently binding on all lower courts in the United States.
Since its passage, every court of appeals had interpreted the FHA to prohibit policies that have a discriminatory impact, regardless of intent. The Supreme Court, however, had never ruled on this issue. This case is significant because the Supreme Court preserved this long-standing legal precedent, and reaffirmed the ‘disparate impact principle,’ a critical legal tool in the struggle for inclusive communities, and in fighting racial discrimination and segregation in housing that has persisted in the United States for decades. Studies reveal the adverse impact of residing in racially segregated neighborhoods, including poorer health, education and economic outcomes. Housing market practices that are ostensibly ‘color-blind’ limit access for minorities to homes in neighborhoods that offer high-performing public schools, safe and healthy environments, and wealth-creation through home price appreciation. This contextualizes the importance of the Supreme Court’s historic ruling. The judgment will impact communities across the country. One commentator notes that “The things that are happening in Texas are happening in every city in the United States. They’re all evading civil rights law by concentrating affordable housing in segregated neighborhoods, thus perpetuating segregation — which Justice Kennedy said they cannot do today.”
While an important mechanism for housing rights has been upheld in this case, it should be recognized that disparate impact liability is an onerous and expensive strategy for human rights litigants. But, nevertheless it remains a strategy. One cause for concern is that the judgment suggests a potential narrowing of the scope of the disparate impact principle. The effect of this will only be seen over time.
