In defense of disparate impact: urban redevelopment and the Supreme Court's recent interest in the Fair Housing Act.

• Author: Schneider, Valerie

ABSTRACT

Twice in the past three years, the Supreme Court has granted certiorari in Fair Housing cases, and, each time, under pressure from civil rights leaders who feared that the Supreme Court might narrow current Fair Housing Act jurisprudence, the cases settled just weeks before oral argument. Settlements after the Supreme Court grants certiorari are extremely rare, and, in these cases, the settlements reflect a substantial fear among civil rights advocates that the Supreme Court's recent decisions in cases such as Shelby County v. Holder and Fisher v. University of Texas are working to dismantle many of the protections of the Civil Rights legislation of the 1960s. The sole issue in both of the recently settled Fair Housing Act cases was whether disparate impact analysis--a type of analysis that some on the Supreme Court may view as requiring racial preferences--is valid under the Fair Housing Act.

This Article argues that in order to have a chance at achieving the goal of its sponsors--"to replace the ghettos [with] truly integrated and balanced living patterns,"--the Fair Housing Act cannot just take aim at the aberrant individual who intentionally denies a person housing because of his or her race. Instead, the Fair Housing Act must recognize claims based on disparate impact analysis alone. This Article posits that disparate impact analysis is particularly critical in the context of urban redevelopment decisions because such decisions are often made through a multi-party protracted process, in which a discriminatory intent may be impossible to discern or entirely absent. It is the outcome of large-scale urban redevelopment projects, not individual decisions to rent or sell, that will truly shape racial housing patterns in the twenty-first century.

Table of Contents Introduction I. The Story Behind the Story A. Mount Holly, New Jersey B. History of Residential Segregation 1. Enactment of the Fair Housing Act 2. Housing Segregation Now C. The Development of Fair Housing Act Jurisprudence II. Disparate Impact--Starting with the Text of the Fair Housing Act III. Disparate Impact Theory Is Not Only Another Way to Show Intent; It Is a Separate Cognizable Theory A. Disparate Impact Evidence Used to Prove Intentional Discrimination B. Disparate Impact as a Stand-Alone Claim--The Key to Disparate Impact Analysis IV. Disparate Impact Analysis Is Needed to Ensure That Urban Redevelopment Decisions Do Not Undermine the Goals of the Fair Housing Act A. Intent Is Not Relevant (and Can Be Impossible to Discern) When Decisions Are Made via a Diffuse Process B. Social Science Tells Us That Intent Is Not a Critical Element of Discrimination C. The Success of the Fair Housing Act Depends on the Survival of Disparate Impact Jurisprudence V. Responding to Common Concerns A. The Fair Housing Act Allows, and in Some Cases Even Requires, Some Amount of Race-Consciousness B. Disparate Impact Analysis Is Not Limitless C. An Additional Limit Proposed Conclusion Introduction

"[T]he arbitrary quality of thoughtlessness can be as disastrous and unfair to private rights and the public interest as the perversity of a willful scheme." (1)

In the past few Supreme Court terms, the Supreme Court has seemed inclined to tighten its grip on anything it deems a "racial preference." (2) In the 2012-2013 term alone, the Supreme Court stripped the Voting Rights Act of its main enforcement mechanism and narrowed its acceptance of affirmative action programs. (3) It appears that the Supreme Court is now hoping to limit the existing interpretation of another pillar of the Civil Rights era--the Fair Housing Act.

Twice in the past three years, the Supreme Court has granted certiorari in Fair Housing cases, and, each time, under pressure from civil rights leaders who feared that the Supreme Court might narrow current Fair Housing Act jurisprudence, the cases settled weeks before oral argument. (4) The sole issue in both of these cases was whether disparate impact analysis--a type of analysis that some on the Court may view as requiring racial preferences--is valid under the Fair Housing Act. (5)

This Article argues that preserving disparate impact analysis is critical to ensuring that the Fair Housing Act has a chance to fulfill its missions of decreasing housing segregation, increasing housing opportunities for minorities, and combatting housing discrimination. Furthermore, this Article argues that the facts of many modern housing discrimination cases, particularly in the urban redevelopment context, are particularly appropriate for disparate impact analysis. In urban redevelopment cases, racially disparate and segregation-increasing impacts often flow not from a single decision-maker motivated by racial bias (such cases could be addressed by disparate treatment analysis). Instead, redevelopment decisions, such as where to build affordable housing and how neighborhoods might be redeveloped, involve a long term, multilayered and diffuse process in which intent is often not relevant to an inquiry into whether the principles of the Fair Housing Act have been upheld.

The Supreme Court's apparent interest in limiting the use of disparate impact analysis in Fair Housing cases is a recent phenomenon. (6) Since the enactment of the Fair Housing Act forty-five years ago, Fair Housing jurisprudence, which is modeled in large part on employment discrimination jurisprudence, has treated disparate impact analysis as a given--the eleven circuits that have confronted the issue have all assumed or decided that suits based on harms that have a disparate impact on members of a protected class are cognizable under the Fair Housing Act, regardless of whether those perpetrating the harms had a discriminatory intent. (7)

This Article seeks to understand the Supreme Court's apparent interest in limiting the use of disparate impact analysis in Fair Housing cases, (8) and it argues that, without disparate impact analysis, there is little hope that the Fair Housing Act will be able to nudge our society in the direction of less segregated living patterns and more housing opportunities for minorities.

Part I of this Article describes the story behind the most recent disparate impact case that made its way to the Supreme Court and was settled just weeks before argument: Township of Mount Holly v. Mt. Holly Gardens Citizens In Action, Inc. Additionally, Part I provides historical context regarding passage of the Fair Housing Act and the progression of Fair Housing jurisprudence.

In Part II, this Article confronts textualists who insist that, because the Fair Housing Act does not contain the magic word "affect," it is unconcerned with acts that disproportionately burden members of protected classes. (9) In this part, I dissect the text of the Fair Housing Act to demonstrate that its language supports disparate impact analysis like its cousins, Title VII of the Civil Rights Act of 1964 ("Title VII") and the Age Discrimination in Employment Act ("ADEA") (both of which have been held to support disparate impact claims by the Supreme Court and the first of which was amended to explicitly include such claims).

Part III of this Article turns to scholarship that suggests that the disparate impact theory is simply a way to show intentional discrimination through circumstantial or indirect evidence (10)--e.g. if you cannot prove discriminatory intent by showing that a housing provider made racist comments, maybe discriminatory intent can be inferred by looking at evidence that a policy has a disproportionate impact on minorities. (11) Here I argue that, while evidence of disparate impact can certainly strengthen an intentional discrimination claim, a claim based on unintentional discrimination also can stand on its own under the Fair Housing Act.

Part IV contains the meat of this Article. It examines the manner in which municipalities actually make housing-related redevelopment decisions. I posit that, because of the diffuse and non-linear manner in which housing-related decisions are made, particularly in the context of so-called "urban redevelopment" projects, intent to discriminate may never be found (and, indeed, may not exist), even where there is a clear discriminatory impact that undermines the purpose of the Fair Housing Act. For the Fair Housing Act to have a legitimate role in nudging our society closer to equality in housing opportunities across racial lines, redevelopment decisions must be subject to disparate impact analysis.

In the final part of this Article, I examine common concerns about disparate impact jurisprudence and propose some methods for addressing such concerns.

1. The Story Behind the Story

   1. Mount Holly, New Jersey

      The human story behind the most recent disparate impact case that settled shortly before the Supreme Court was to hear oral arguments (12) Township of Mount Holly v. Mt. Holly Gardens Citizens In Action, Inc. (13)--highlights the ways in which, in the urban redevelopment context, intent to discriminate may be irrelevant to an inquiry into whether the principles of the Fair Housing Act have been upheld.

      The plaintiffs in Mt. Holly were former and current residents of Mount Holly Gardens (the "Gardens"), a subdivision in Mount Holly Township, New Jersey (the "Township"), who sued the Township in an effort to block redevelopment plans. (14) Those redevelopment plans called for the complete demolition of all existing homes in the Gardens community in order to make way for a new residential development, the prices of which would be out of reach for almost all of the Gardens current and former residents--essentially, the planned development would have wiped the one predominantly minority community in the Township off the map, scattering its minority residents to even more segregated communities. (15)

      The Gardens was originally constructed in the 1950s to house military families, and it consisted of approximately 325 two-story brick row...