The Roberts Report: Supreme Court Affirms “Disparate Impact”

By Westfair Online

BY ALEXANDER ROBERTS

It was almost lost among the twin blockbuster decisions on gay marriage and the Affordable Care Act. But the U.S. Supreme Court’s third major decision recently found that policies that have a “disproportionately adverse effect on minorities,” even if unintentional, may constitute discrimination under the Fair Housing Act.

The court ruled that if the consequences of government regulation have a so-called “disparate impact” on protected classes — defined by race, color, religion, sex, handicap, familial status or national origin — they may violate the FHA.

The opinion, written by Justice Anthony Kennedy in a 5-4 decision along familiar lines, reinforces the legal vulnerability of towns and villages in Westchester County that have strictly limited multifamily housing and have otherwise made the construction of affordable housing impractical.

The Texas case involved the allocation of low-income housing tax credits, which are administered by the states to developers of affordable housing. For decades, states like Texas and New York have allocated the credits overwhelmingly to high-poverty areas, further concentrating blacks in areas of low opportunity. A 10-year study in 2013 by the Fair Housing Justice Center found that in the New York metropolitan area, 77 percent of LIHTC affordable housing units were in minority neighborhoods and 71 percent in areas of extreme poverty concentration. In suburban New York, only 31 percent of nonelderly units were in white areas. The report concluded, “By locating the vast majority of low-income family developments in poor and predominantly minority neighborhoods … the tax credit allocation agencies also failed in their duty to affirmatively further fair housing.”

Since the LIHTC is the primary driver of low-income housing in the U.S. and New York, the Supreme Court decision may result in changes in the site selection process if disparate impact is taken into account. Ironically, since the 2009 consent decree between the U.S. Department of Housing and Urban Development and Westchester County, this has already happened, since the county has needed the tax credits to subsidize many of the required 750 “fair and affordable” units in overwhelmingly white suburban communities.

Exclusionary zoning affected

While the distribution of tax credits is directly affected, the decision also affects so-called “exclusionary zoning,” in which suburban zoning restricts development of affordable housing by favoring expensive one-family houses. The Westchester HUD monitor has argued that local home rule policies may violate the Fair Housing Act when they have a disparate impact on racial minorities and the disabled. While the latest decision bolsters his argument against municipalities like Harrison, the zoning laws of which have resulted in failure to produce any affordable housing in a quarter-century, the result of the decision is a little murkier.

The court’s decision made clear that plaintiffs who are challenging decisions of public or private actors need to identify a specific practice they are challenging, link the practice to an impact and then, when a defendant has produced evidence for why its policy meets an important interest, prove there is a less-discriminatory alternative available.

Kennedy’s opinion acknowledges some of those interests: “Zoning officials, moreover, must often make decisions based on a mix of factors, both objective (such as cost and traffic patterns) and, at least to some extent, subjective (such as preserving historic architecture). These factors contribute to a community’s quality of life and are legitimate concerns for housing authorities.”

Still, in language that cheered fair housing advocates — many of whom had been bracing for a negative decision — the court highlighted the important role of private developers in vindicating the purposes of the Fair Housing Act: “The availability of disparate-impact liability,” Kennedy wrote, has allowed private developers to vindicate the FHA’s objectives and to protect their property rights by stopping municipalities from enforcing arbitrary and, in practice, discriminatory ordinances barring the construction of certain types of housing units.

And the court affirmed the integration principle that underlays the Fair Housing Act. The act, the court wrote, “must play an important part in avoiding the Kerner Commission’s grim prophecy that ‘(o)ur nation is moving toward two societies, one black, one white — separate and unequal … The Court acknowledges the Fair Housing Act’s continuing role in moving the Nation toward a more integrated society.”

Alexander Roberts is executive director of the fair housing group Community Innovations Inc., headquartered in White Plains. He examines demographics in Westchester County in a column for the Business Journal. Contact him at aroberts@communityhousing.org or 914-683-1010.

Source: Westchester Business Journal online.