In 1968, de facto and de jure housing practices crowded poor African-Americans into tenancies in overpriced, underserved neighborhoods. From the Black Crescent in Richmond, California to the Black Bottom in Detroit, these areas were packed with the pressures of segregation—the pressures to get by, get along, get out. Housing projects like West Dallas, 3,500 units located across from a lead smelter after affordable housing was rejected by a white community as a “Negro Project,” were boiling over with poverty and crime.
After several summers ignited by violent protests over killings by police, the Fair Housing Act was passed in order to, as it was said then, tear down the ghetto walls. For the sake of black homeseekers—whether Jackie Robinson or a former Arkansas sharecropper living in Chicago—the Act sought to liberate the housing market from race, letting people rent and buy homes in the neighborhoods and school districts of their choice.
As discrimination changed, softening in some ways, but tenaciously persisting in others, so too did the Fair Housing Act. By the 2000s, FHA cases had evolved to grieve more complex housing patterns like reverse redlining: the concentration of subprime loans in African-American communities to a degree unexplainable by poverty or credit scores alone.
Three times over the last few terms, despite a circuit and agency consensus, the Supreme Court took cert to assess whether the Act could reach scenarios like reverse redlining without evidence of discriminatory intent. Did the FHA really reach disparate impact liability? Twice the plaintiffs settled their claims to snatch the issue back from the Court, fearful of a motivated retrenchment. This last time, a small non-profit in Texas boldly, foolishly refused to back down. Yesterday, somehow, despite odds and trends, they won.
The factual heart of the case before the Court was really not that different from the circumstances in 1968. The case was still about taking down the ghetto walls trapping West Dallas, still about trying to build affordable housing somewhere other than in the city’s high-poverty, high-crime areas. But this time, without evidence of public officials speaking against “Negro Projects,” the case was brought based on facts and statistics like this one: as found by the district court, 92% of the low-income housing tax credit units issued in Dallas were located in census tracts with less than 50% white residents. Testimony in the case revealed, in heart wrenching terms, public housing tenants’ desperation to shelter their children from poverty and violence—to get their families out of the ghetto.
Justice Kennedy’s decision for a 5-member majority means that disparate impact liability survives as a tool of accountability and reform for our era of poverty rooted in a troubled—and very modern—history of racial discrimination in land and housing. The opinion and its significance can be summarized by two words: Outcomes Matter. When housing is made unavailable in ways that dramatically, provably impact minorities to an extent disproportionate to their numbers or their economic status alone, public agencies and landowners may have to do better. The decision amounts to no more than that—disparate impact liability remains a burdensome, costly, and low-odds strategy for civil rights plaintiffs. But it remains a strategy nonetheless.
The finer print of the Court’s reasoning centers around the rule, drawn from employment and age discrimination cases, that “antidiscrimination laws must be construed to encompass disparate-impact claims when their text refers to the consequences of actions and not just to the mindset of actors, and where that interpretation is consistent with statutory purpose.” (Slip Op, Kennedy, J., at 10.) Like these other statutes, the Court held, the FHA’s language refers to results rather than intent by covering actions that “otherwise make unavailable” a dwelling. (Slip Op, Kennedy, J., at 11, 13.) That such covered actions must be “because of race” or other protected characteristic, the Court reasoned, does not mean that race must be proven as the driver for the decision. (Slip Op, Kennedy, J., at 13.) For the Court’s majority, this interpretation of the FHA was ratified by amendments to the statute in 1988, after a circuit consensus had emerged on disparate impact liability under the FHA.
Dissents by Justices Thomas and Alito (joined by Thomas, Roberts, and Scalia) strenuously disagreed with this interpretation of the FHA, arguing in particular that “because of race” was a limiting term confining the FHA to cases that could prove intentional discrimination. But even beyond their disagreement on these doctrinal holdings, the majority and dissents clashed on three interesting, important issues for the future of race and housing.
(1) Can the FHA legitimately address the wealth gap?
Civil rights advocates hold tight to disparate impact liability for one main reason: it seems to be the only legal tool to address the poverty that race made. Racial discrimination, in other words, segregated us in housing, employment, and education in ways that built a dramatic, stubborn wealth gap between racial groups. To dislodge the distribution of resources under segregation requires social mobility—individuals who do better than their parents. Here, the FHA is particularly important, because land and housing are so critical to social mobility, opportunity, and wealth accumulation. They determine which schools our kids will attend, how much our property will passively appreciate, whether our children will witness or fall victim to a violent crime, and more. As much as ever before, our residential zip code says a great deal about our economic destiny in life.
If race did so much of the work of building the economic and social divisions among our zip codes, can’t we use a civil rights statute to fix it? The Court majority opinion doesn’t take up this issue, but it implicitly embraces the relevancy of a civil rights law to address the persistent—and highly racialized—concentration of poverty. For the dissents, it is anathema to use a civil rights law where the alleged harms are being perpetrated by “markets.” Land is cheaper in minority neighborhoods, this argument goes, so that’s the reason (a good reason) an agency would build more affordable housing there. It’s a classic stand-off over whether and how to use government action to change the math in land and housing markets where those markets begin at a starting point of extreme racial inequality.
(2) Is race still a problem in housing?
As in other major civil rights cases in recent years, the majority and dissent starkly diverge over the on-going salience of racial discrimination in modern society. Kennedy described how the “vestiges” of residential segregation by race “remain today, intertwined with the country’s economic and social life.” (Slip Op, Kennedy, J., at 5.) Disparate impact liability, the majority found, can serve to “counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment,” thus “prevent[ing] segregated housing patterns that might otherwise result from covert and illicit stereotyping.” (Slip Op, Kennedy, J., at 17-18.) He validated the objectives of local housing authorities that seek to “foster diversity and combat racial isolation with race-neutral tools” in “communities that suffered the harsh consequences of segregation.”
For the dissents, segregation without evidence of intent to harm minorities is not covered by the FHA’s terms, and in any event may amount to no harm at all. Both dissents relied on professional sports (the NBA and NFL, respectively) to argue that statistical differences between racial groups may not be indications of discrimination; indeed, Justice Thomas argued that ethnic separation, specialization, and “social hierarchy” are nearly universal conditions that “do not always disfavor minorities.” (Slip Op, Thomas, J., dissenting at 8-9; see also Alito, J., dissenting, at 9.) Where the majority opinion sees on-going segregation as a legacy of our particular history of racial hierarchy, the dissents frame racial sorting as a naturalized aspect of the human condition—visible in fact, even where law is and should be colorblind to those divisions.
(3) Is disparate impact liability good medicine or bad law for state and local governments?
Among the most interesting controversies in yesterday’s opinion was a majority-dissent feud about which side had the interests of state and local governments at heart. After all, public agencies are (and were in this case) the typical defendants in a disparate impact case, and many weighed in as amicus curie. The major briefs, cited by the majority, came from a coalition of twenty-two big city governments (ranging from San Francisco to Columbia, South Carolina) and a coalition of seventeen politically-diverse states (including Arizona, California, New York, North Carolina Massachusetts, Missouri, Utah, and Virginia). Their amicus briefs argued that in practice, disparate impact theories of liability are necessary, effective, and sufficiently narrow to help dismantle residential segregation without treading on their policy discretion. The city brief went even further, arguing that disparate impact cases are actually less expensive and less divisive than disparate treatment cases, because a focus on subjective intent requires extensive discovery on many individual government officials’ motives and sincerity, as well as polarizing “accusations of bigotry and litigation over motives.” (Brief for City of San Francisco et al. as Amici Curiae, at 26-29).
These briefs, however, were not the only statements of public agency interests. The Houston Housing Authority (which operates the same tax-credit system used in Dallas) weighed in on its own, arguing that, as a practical matter, it could simply not afford to develop affordable housing outside of the city’s poorest areas. “It is cost prohibitive,” the brief wrote, “and not an effective use of HHA’s limited resources to develop only in higher opportunity areas. Affordable housing would never get built.” (Brief for Houston Housing Authority as Amici Curiae, at 10). Its concerns were cited in both dissents, with Thomas arguing that “the threat of disparate-impact suits based on those concentrations has hindered HHA’s efforts to provide affordable housing.” (Slip Op, Thomas, J., dissenting at 12.)
Given Justice Kennedy and other justices’ commitments to federalism, the state and local governments’ concerns surely influenced the case opinions. The multi-state briefs prevailed, apparently reassuring that disparate impact liability is not the dragnet of civil rights litigation, but rather an operational, sufficiently narrow tool with a history of positive outcomes. But the fact that the signator cities and states are among the most racially diverse places in the country only makes these arguments a case in point for either side. Under the majority’s view, we might well view the non-signator places as unfinished business warranting discipline by disparate impact exposure. Through the eyes of the dissents, these missing cities and states will be presumed “guilty of discrimination until proved innocent” in disparate impact cases. (Slip Op, Thomas, J., dissenting at 8-9.) Alito’s argument that willing states and cities can enact their own disparate impact liability standards (a kind of opt-in system for disparate impact liability) is cold comfort if the goal is to minimize discrimination and segregation even in the places least committed to racial integration.
It is uncontroversial to say that it was a primary goal of the Fair Housing Act to dislodge discrimination from housing markets even where it was most deeply rooted. Places, that is, like Dallas—a city still struggling, nearly 50 years after the passage of the FHA—to tear down its ghetto walls. As hard as that work has been, Justice Kennedy’s majority opinion got the FHA’s role in the matter right: “The Court acknowledges the FHA’s continuing role in moving the Nation toward a more integrated society.” (Slip Op, Kennedy, J., at 24.)