The U.S. Supreme Court ruled to keep a key piece of a landmark civil rights law intact this week in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. In its 5-4 decision, the Court upheld the disparate impact theory under the Fair Housing Act (FHA)—an important law passed in 1968 to increase fair housing opportunities for minority populations, decrease segregation, and eliminate discrimination in housing.
Sadly, 40 years after Congress enacted the FHA, segregation and unequal access to housing for minorities remain the norm. Decades of discriminatory policies and practices like exclusionary zoning, urban renewal, and redlining have perpetuated segregation and led to devastating effects on low-income and minority communities. These effects were magnified by the foreclosure crisis, which flowed in large part from the discriminatory practices of subprime lenders in minority neighborhoods.
The disparate impact theory of proving discrimination is critical to combatting these effects, because there is often insufficient evidence to meet the higher burden of proving intentional discrimination—also known as disparate treatment. As Justice Kennedy clarified in Thursday’s decision, the disparate impact theory “permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.” The Obama Administration has relied on the disparate impact theory to force important settlements with lending institutions accused of discriminatory practices, and to challenge local government policies that limit the housing opportunities available to racial minorities.
The disparate impact theory is also a critical tool for responding to the spread of overly broad criminal background screening policies applied to housing applicants, and the increasing number of local governments passing crime-free and nuisance property ordinances under the guise of combatting crime. Although seemingly neutral, these ordinances have serious, harmful, and discriminatory consequences. By subjecting entire households to eviction when the police are called repeatedly to particular rental properties, these ordinances frequently punish domestic violence survivors for the acts of their abusers. They also reduce the supply of affordable rental housing in communities and target renters, who are disproportionately racial minorities, on the basis of minor offenses.
These are just some examples that demonstrate why disparate impact theory is a critical tool to advance fair housing throughout the country. Armed with today’s decision, advocates can continue to develop this tool to combat the ongoing harmful effects of segregation and discrimination. Beyond upholding claims based on disparate impact theory under the FHA, the Court confirms that this theory provides advocates with the ability to stop local governments from enforcing “arbitrary and, in practice, discriminatory ordinances.”
Although today’s decision represents a great victory for housing advocates, it does include some warnings for those charged with implementing the FHA. It clarifies, for example, that courts will be prevented from using racial targets or quotas to remedy discrimination. There also remains the risk that the FHA will face new legislative challenges. As the Shriver Center’s Poverty Scorecard highlighted, proposals to undermine the disparate impact theory were brought forward in Congress this session, including HB 265, which would have prevented the Department of Justice from using disparate impact theory in enforcing the FHA.
This case highlights the critical role of the FHA in the broader landscape of civil rights protections, and advocates can continue to develop its use in remedying the injustice of ongoing residential segregation and discrimination in our communities. As Justice Kennedy stated, “The FHA must play an important part in avoiding the . . . grim prophecy that ‘[o]ur Nation is moving toward two societies, one black, one white—separate and unequal.”