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Disparate Impact Can Show Housing Discrimination, Court Rules

By Casey C. Sullivan, Esq. | Last updated on

With all the attention given to the Supreme Court's recent rulings on Obamacare, same-sex marriage, and the death penalty, it was easy to overlook several other important decisions. For example, last Thursday, the Supreme Court recognized that housing policies which have a disproportionate impact of certain groups can violate the Fair Housing Act.

The ruling is the first time the Supreme Court has approved disparate impact claims, though they have been used widely for decades. The decision allows advocates to maintain a major tool in fighting housing discrimination, where intentional discrimination can often be hard to establish.

Disparate Impact Versus Intentional Discrimination

The Fair Housing Act was passed following the assassination of Martin Luther King when the government released released research showing that housing discrimination was increasingly dividing America. There was a clear divide between black inner city residents and white suburbs. To rectify this, the FHA prohibited housing discrimination on the basis of race, color, religion, or national origin.

The FHA explicitly bans intentional discrimination. The Act has also been read by every circuit court to prohibit policies that disparately impact groups on the basis of race, religion, etc. In disparate impact cases brought under the FHA, a plaintiff may show a violation of the fair housing law without proving intentional discrimination by showing that a business practice has a disproportionately burdens certain groups and cannot be justified by sound business concerns.

Texas's Housing Policy

Here, the Inclusive Communities Project, an affordable housing nonprofit in Dallas, Texas, sued the state's Department of Housing under a disparate impact claim. The state was placing too many subsidized housing projects in minority neighborhoods, the ICP claimed, essentially segregating low income and minority housing from wealthier, whiter neighborhoods. Over 92 percent of those projects were in neighborhoods with a majority non-white population. The intent may not have been discriminatory, but the result was.

The Supreme Court's decision, written by Justice Kennedy and joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, found that such a disparate impact claim was permissible under the FHA. The goal of the act is, after all, to prevent just such housing discrimination and segregation. The Act includes several "results oriented" terms that show that intentional discrimination is not the only discrimination it prohibits. Further, the Act has been amended to create exemptions for liability after disparate impact causes of action were well established, yet Congress did not remove that type of liability from the Act.

Setting Limits on Disparate Impact Claims

While allowing advocates for fair housing and diversity to continue relying on disparate impact claims, the Court also set limits to those claims. Racial imbalance alone, Kennedy wrote, cannot be enough. There must be a "robust causality requirement" between the practice challenged and the disparate impact in order to avoid a reversion to simple racial quotas.

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