#69 – Fair Housing: Limitations of Supreme Court decision and AFFHR

#69 – Fair Housing: Limitations of Supreme Court decision and AFFHR

[The 5 blogs in this set take up the Supreme Court’s decision in Texas vs. Inclusive Communities and HUD’s Affirmatively Furthering Fair Housing Regulation (AFFHR), and some general principles dealing with the meaning of social change and the efforts to accomplish it.

Blog #68 took up how the large argument is organized in this set of 5 Blogs, the reception the decision and the AFFH Rule has received, the attribution of causes to the legacy of slavery and to present actors, and the problems that the analysis of causes has created.}

THIS BLOG #69 – Fair Housing: Limitations of Supreme Court decision and AFFHR, takes up the limited scope of the AFFHR, the weaknesses in the Court’s decision and the problems of implementation for both. This was: Blog #67-2a – Fair Housing Act and Disparate Impact Claims]

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#69 – Fair Housing: Limitations of Supreme Court decision and AFFHR

The AFFHR[1] and the recent Supreme Court win in a Texas Fair Housing case^[2] is a significant win for measures aimed at contesting racial discrimination in housing, especially given the composition of the Supreme Court today. However:

The AFFT Rule is, in its practical impact, far less important that the Court’s decision. The purpose of the AFFT Rule is very limited. As its summary in the Federal Register states:

Through the availability of such data and available local data and knowledge, the approach provided by this rule is intended to make program participants better able to evaluate their present environment to assess fair housing issues.[3]

The AFFHR is an aid to others to comply to the pre-existing mandates of the Fair housing Act, and will specifically help those bring claims under the Act to show statistically disparate impacts of challenged actions. It provides no new penalty for violations, gives no new enforcement powers, sets no new higher standards for behavior. It does commendably provide a boost for efforts at planning, but does not mandate any standards that would make planning more effective than what local authorities. Its greatest effect will probably be to simplify the application of the disparate impact standard that the new Supreme Court decision has legitimated by helping to assemble the data that would show such an impact. So the focus of examination should be on that decision of the Court.

There are also reasons not to get complacent about the meaning of that decision, in some of the language of the Court’s opinion.

Overt racial discrimination in public actions has long been condemned in the United States, and recent events in a staunchly southern state such as South Carolina in the aftermath of the recent murder of nine African-Americans during church services by a white racist suggest that at least the overt display of racially offensive beliefs and conduct meets widespread, if not unanimous, popular condemnation. But there is also substantial evidence of continuing discrimination based on race and ethnicity is many aspect of U.S. life, and very visible in patterns of inequality and racial segregation in housing and urban planning practices. The result is a pattern in which racist conduct is denied as being racist, is explained by many other considerations but not by prejudice, in which practices having a demonstrable discriminatory effect are justified by all manner of claims as to innocent intentions and legitimate non-racist goals. Housing discrimination in many communities are clear examples.

The Supreme Court’s decision recognizes this history, and that apparently innocent non-discriminatory purposes for actions may have in fact a prohibited discriminatory impact. It may open the door to extensive controversy and perhaps litigation around what legitimate public concerns may justify actions that do have a discriminatory impact. But in such litigation the decision also creates problems.

In the employment discrimination case cited by the Court, for instance, a “legitimate business purpose” may validate an action having a disparate impact, depending on the circumstances.

To be specific:

The Court’s Syllabus states:

“Re­medial orders in disparate-impact cases should concentrate on the elimination of the offending practice, and courts should strive to de­sign race-neutral remedies. Remedial orders that impose racial tar­gets or quotas might raise difficult constitutional questions. “

In Kennedy’s opinion, citing the employment discrimination cases:

“…not all employment practices causing a disparate impact impose liability under §703(a)(2). In this respect, the Court held that “business necessity” constitutes a defense to disparate-impact claims.”

Further, “These cases also teach that disparate-impact liability must be limited so employers and other regulated entities are able to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system…. And before rejecting a business justification—or, in the case of a governmental entity, an analogous public interest—a court must deter­mine that a plaintiff has shown that there is “an available alternative . . . practice that has less disparate impact and serves the [entity’s] legitimate needs.”

And later:

“disparate-impact liability has always been properly limited in key respects that avoid the serious constitutional questions that might arise under the FHA, for instance, if such liability were imposed based solely on a showing of a statistical disparity. Disparate-impact liability man­dates the “removal of artificial, arbitrary, and unnecessary barriers,” not the displacement of valid governmental policies. Griggs, supra, at 431. The FHA is not an in­strument to force housing authorities to reorder their priorities. Rather, the FHA aims to ensure that those priorities can be achieved without arbitrarily creating discriminatory effects or perpetuating segregation.”

“It would be paradoxical to construe the FHA to impose onerous costs on actors who encourage revitalizing dilapi­dated housing in our Nation’s cities merely because some other priority might seem preferable. Entrepreneurs must be given latitude to consider market factors. 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. The FHA does not decree a particular vision of urban development; and it does not put housing authorities and private developers in a double bind of liability, subject to suit whether they choose to rejuvenate a city core or to promote new low-income housing in sub­urban communities. As HUD itself acknowledged in its re­cent rulemaking, disparate-impact liability “does not mandate that affordable housing be located in neighbor­hoods with any particular characteristic.” 78 Fed. Reg. 11476. “

Terms such as “race –neutral remedies,” or “a mix of factors contribut[ing] to a community’s quality of life,” or “legitimate needs” that may outweigh disparate impacts, or prohibiting taking a community’s “particular characteristics” into account in locating housing, may well lead to delegitimize such frequent progressive goals of public planning and zoning actions as achieving diversity, promoting equality, distributing based on need, all of which to be meaningful must clearly take racial and ethnic characteristics into account in formulating policies. “Race neutrality” may be an ultimate objective, but on the way there it can prevent many needed responses to discrimination.

This is all language that, depending on how it is interpreted in the future, may turn disparate impact cases into long-drawn-out technical planning debates about what “a community’s quality of life” is, or whether economic development is an appropriate public purpose and how it might be achieved, etc. Indeed, it is a disservice to logical thinking that the Court’s opinion frequently uses the term “minority” but nowhere defines it, uses the term “racial or ethnic minority” once but seems to equate “minority” with “racial minority” in its discussion of race in dealing with remedies. It would be ironic if the law were to be interpreted to hold that racial discrimination in housing is bad unless it “serves a legitimate business purpose,” as the bald language often cited in employment discrimination cases reads. And it would be upsetting indeed if the cautious language of the decision limiting disparate impact claims to those challenging practices that have a “dispropor­tionately adverse effect on minorities” were broadly interpreted to strike down the disparate positive impact on minorities that plaintiffs often in fact seek in remedies, a disparate impact that favors minorities but adversely affects other minorities, e.g. small property owners, or, for that matter, the wealthy.

The affirmative actions required of governments to implement the Fair Housing Act within their jurisdictions is not touched on in the Court’s decision. The explicit holding that race may not be part of any remedial order, after a finding of adverse impact in violation of the Act, is a potential crippling threat to efforts at affirmative action to overcome findings of racial disparities. If statistical measures can be used as evidence of a disparate impact on race of a governmental action. And be a valid reason to invoke the Fair Housing Act, why is it not appropriate to ask for a remedy likewise taking statistical and other measures of impact on race into account, even having a “racial quota” as a measure of success – as part of the remedy?

It’s time to recognize calls for “color -blindness,” in Scalia’s opinion, or “race-neutral measures,” in Kennedy’s, for the logical inconsistencies and red herrings that they are?

The Court holds that “the FHA does not decree a particular vision of urban development.” But many of its proponents certainly thought it did: a vision of an urban development that is socially, economically, and physically just, in which minorities will be full and equal citizens entitled to share in all the benefits of urban life, without discrimination. Such a vision implies affirmative action, as well as the absence of negative, by government. It would be a shame if this decision buried that vision.

Finally, The Court’s structuring of the desired approach to adjudicating disparate impact claims opens a Pandora’s Box that may become a job creation program for planers. After a prima facie case of disparate impact claim has been established, as by statistical evidence with background, the defendant is given the opportunity to legitimate that impact by some alternate overriding purpose. In turn, the plaintiffs must then show that other legitimate means were available to achieve that purpose that did not have such a disparate impact. That may mean having to develop a full-blown alternate plan, backed up by expert testimony, that the defendants could follow. That’s a pretty substantial burden to put on any plaintiff—in effect, to fulfill the government’s responsibility to plan fairly.

Six further problems with the Court’s decision can be identified:

The Supreme Court has limited, as least in dicta, the potentially far-reaching possibility of voiding measures based on a showing of adverse impact. While those praising the holding argue that it looks at consequences of actions, not motives or intentions, the Court specifically holds that a “simple” showing of statistical disparity is not enough. Further information is needed, for which the proponent had the burden of proof, was that it had a “legitimate purpose.” Once that was shown, the burden of proof shifted to the challenger to show that that the claimed other “legitimate purpose ” could be as well served by other measures not having such a disparate impact. The contested action might survive if the claimed legitimate purpose could not be served in any other reasonable manner. This is the ”burden-shifting ” provision. It leaves open the question whether every alternate legitimate purpose will have priority over a purpose further fair housing, whatever the magnitude of each, or how such magnitude should be measured, if relevant.

Let us take a typical case. A zoning change for a parcel of land hitherto zoned as open space is zoned by a zoning board in a disproportionately white town (by county or state standards. None mentions race in the process of adopting the zone change; no direct evidence of intent is available. There is statistical evidence that the zone change would make occupancy by minority group members more unlikely than by whites , so a disparate impact, but a precise measure of what constitutes “disparate” is unclear in the Act) for housing, at a density of 4 units an acre. A fair housing group proposes a density of 12 units an acre to make it more affordable for low-income and minority groups. It challenges the more restrictive zoning under the Fair Housing Act’s provisions. It must hire a planner or statistician to show that there is a shortage of housing for minority group members, and that this would be an opportunity its members. The Town says that will increase traffic and lead to pollution. The fair housing group needs to show its alternate would not. Perhaps it puts forward a plan for investment in public transportation to reduce car traffic. It needs environmental science testimony to the resultant reduction in pollution. It needs to show what the user demand would be, what the costs, what the consequences elsewhere along the route. Suppose net costs to service 12 units are very high; case closed? Then those benefiting from the discriminatory zoning will have simply bought its legitimacy

At least six problems with that:

First the burden of proof is heavy and expensive. Challenger must develop a stasticial analysis, then an alternative plan, presumably show its feasibility with actual studies.

Second, no standard is given for what constitutes a “legitimate purpose” of such a nature as to over-ride the discriminatory effect. Would preserving “community character” be legitimate? It is a common and widely desired goal for good planning, and likely democratically established. As most would define it, changing it racial balance or class balance would interfere with that goal, by definition.

Third, whose “purpose” is involved here? The zoning boards? The town council’s? The majority of voters? Are the interest of those who would like to move into the town to be considered? The developers who would like to build the four units? And how is anyone’s purpose determined, simply by what they say it is? No one will ever say publicly their purpose is to limit black occupancy, exclude Hispanics, etc.? What purpose, and who’s, is considered legitimate: making a profit? Reducing taxes? Beautifying the area? Winning voters for the next election?

Fourth, are we back at a variation of the “intended” definition discrimination: did the proponents of the zone change “intend” it to be discriminatory? They may be big contributors to the NAACP, and some of their best friends may be black. Is that relevant? There is little difference discussed between “motive” and “intent.” “Motive” is actual state of mind, “intent”, in criminal and negligence law, is often held to be acting in knowledge of the likely result of an action, acting based on the knowledge a reasonable person would have of the expected consequence of the action, and therefore intending that result.

Fifth, neither the problem nor the remedy can be logically considered piece-meal, in isolation. The new regulation recognizes that; a remedy, the provision of integrated (non-disparate?) housing must take into account transportation, infrastructure, libraries, schools, needed by that housing’s residents. But no town wants to just make decisions based on FH criteria for these 12 units there needs to be, a town-wide comprehensive plan that deals with the whole range of urban problems. Not only does this particular decision demand that, but absent it there may well new disparate impacts imposed on other parts of the two. Zoning, in many states, needs to be in accordance with a comprehensive plan; doing it piece-meal is on its face unfair. Minorities will generally haves less control over their own residential areas than whites; on its face that is disparate, discriminatory.

Sixth, gentrification is a process ignored in the Regulation, yet is it is a major example of the need for a comprehensive approach allowing the application of fair housing principles. Yet it is an important consideration in many urban areas today. In a previously segregated area located near earlier employment in the “inner ring” around a central city area, as the economy develop and manufacturng gives place to services the area may become very attractive to white, who move in, at one point displacing blacks. At that point, technically, the area becomes less segregated. Yet minority group members are adversely and disparately affected. Where in a white area a neighborhood preference in new housing adversely affects minorities, in a black gentrifying area is favors them. One-rule-fits-all approaches will not do; individual communities must be comprehensively reviewed in deciding what rules to apply. Just like with piece-meal zoning, the answer is comprehensive planning, not provided for in the AFFH regulation.^[4]

Underlying all this is the failure to recognize the real causes of the problems the Act is intended to deal with. The biggest problem creating unfair housing is the inequality of wealth and income, and power; combine that inequality with a market-based distribution of housing, and inadequate housing for those at the bottom will result. Combine that with continuing if declining racism[5] and its after-effects, and with the resulting systemically lower wealth and income of minorities, and you have the direct cause for the conditions the Fair Housing Act is designed to remedy. And the causes operate at the national, if not the global, level, as must the remedies as well.

Lawyers, planners, and advocates for diversity and racial justice should remain wary of unconditional approval of the decision or praise of the AFFHR.

More positively, perhaps this otherwise welcome decision can be seen as a step forward in crafting stronger positive role for the federal government in the area of housing and urban development. The logic of the decision, although limited by foreboding language by this Court, suggest there is much that could be done at the federal level to in fact develop a broad vision of a desirable urban policy in the cities of the nation. It would be a vision hardly to be expected of this Court or of this Congress, but perhaps could be thought through for what a progressive urban platform for 2016 might be and the longer-range future.

Continuing the discussion will be:

Blog #70 – The Causes of Discrimination, opens an analysis of the current causes of discrimination, and the attribution of causes to both the legacy of slavery and to the present actors behind discrimination, and then the structural context in which they operate.

Blog #71 – Fair Housing – Remedies and Solutions, then proposes some immediate remedies, and then some principles for real solutions.

Blog #72 – Social Change: Some Elusive Principles for Societal Change, goes beyond Fair Housing to raise some questions about elusive general principles for societal change.]

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[1] Federal Register /Vol. 80, No. 136 /Thursday, July 16, 2015 /Rules and Regulations, p. 42283. Available through http://www.huduser.org/portal/affht_pt.html#final-rule.

[2] Texas Department of Housing and Community Affairs et al. vs. Inclusive Communities Project, Inc., et al

Texas Dep’t of Housing & Communit. Affairs v. Inclusive Communities Project, No. 13–1371, 2015 U.S.

LEXIS 4249 (June 25, 2015). Available at: http://www.supremecourt.gov/opinions/14pdf/13-1371_m64o.pdf

[3] Federal Register / Vol. 80, No. 136 / Thursday, July 16, 2015 / Rules and Regulations, p. 42272

[4] The provision for data gathering, analysis, and sharing by the Federal with local governments can indeed be helpful in local comprehensive planning efforts, but is not the same as directly fostering such efforts.

[5] See the discussion at Blog #68 warning of minimizing the extent of discrimination today.