Split court determines disparate impact cases are legal in fair housing

In a 5-4 decision, the United States Supreme Court upheld the concept of using disparate impact to prove housing discrimination.  Low-income housing advocates “The Inclusive Communities Project, Inc.” alleged fair housing violations based upon disparate impact against the Texas Department of Housing and Community Affairs for distributing low-income housing tax credits in a way that perpetuated racial segregation.

For many years, disparate impact claims have been brought in the Federal appellate courts with success despite the fact that the Fair Housing Act does not specifically authorize such actions.

The case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., examines the applicability of disparate impact, that is, the results of a policy, versus disparate treatment, that is, a policy that is discriminatory on its fact, in fair housing disputes.  The Inclusive Communities Project, Inc. argued that it should be allowed to prove with statistics that the policies of the Texas Department of Housing and Community Affairs resulted in a negative impact based upon racial protected classes.  The Texas Department of Housing argued that its policies did not discriminate on their face and argued that disparate impact claims are not authorized by the Fair Housing Act.

The court indicated in its syllabus that “Recognition of disparate-impact claims is also consistent with the central purpose of the FHA, which,like Title VII and the ADEA, was enacted to eradicate discriminatory practices within a sector of the Nation’s economy.”  The court indicated that the Fair Housing Act makes reference to

The opinion states that “the Fair Housing Act provides that it is unlawful to “refuse to sell or rent… or otherwise make unavailable or deny, a dwelling to a person because of race” or other protected characteristic, §804(a), or “to discriminate against any person in” making certain real-estate transactions “because of race” or other protected characteristic, §805(a).”  Justice Kennedy goes on to write that “The results-oriented phrase ‘otherwise make unavailable’ refers to the consequences of an action rather than the actor’s intent.”  As a result, a court can look to the consequences of an action rather than making a determination as to the actor’s intent.

Landlords governed by the Fair Housing Act should be concerned on a “local-level” that they do not develop policies that do not discriminate against protected classes based upon disparate impact.