This Supreme Court Decision Could Encourage One of the Worst Forms of Racism

Nick Wing, Huffington Post, February 17, 2015

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The country has progressed since the late ’60s, and blatant prejudice is now much less common. Yet housing discrimination persists, often due to bias built into the system. So over the years, the federal courts have expanded the Fair Housing Act to cover practices with a discriminatory outcome. Under this theory, known as “disparate impact,” a policy or practice can be illegal if it disproportionately affects minorities, regardless if that was its purpose. Disparate impact claims are crucial to fighting racial inequality today.

But this key weapon could soon be taken away. The Supreme Court will likely rule this summer in a case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, that may forbid disparate impact claims under the Fair Housing Act. Such a decision would effectively defang the law. It would also shed a disturbing light on how this court believes the law should react to entrenched discrimination.

The underlying reality of the Texas case is that certain housing policies disadvantage minorities more than whites, whether by hidden design, careless disregard or unfortunate coincidence. It’s this type of discrimination–in housing, but also employment, voting and education–that today produces some of the biggest barriers to bridging the racial divide. If the Supreme Court acknowledges this truth and believes justice is best served by fostering equality “in fact, and not simply in form” —to borrow a phrase from Justice Ruth Bader Ginsburg–its decision should be easy. That it probably won’t be helps explain why racial inequality remains such an unrelenting problem for the nation.

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Passed just a week after Martin Luther King Jr.’s assassination, the law made it illegal to discriminate in the sale, rental or financing of housing based on race, religion and national origin. It prohibited the sort of straight-up racist language and policies long used to maintain housing segregation. The more blatant forms of redlining, for example, were banned. (Gender, familial status and disability were later added to the list of protected classes.)

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Over the past 40 years, judges have repeatedly read the statute to forbid many policies and practices with a disparate impact on minorities, even where no racist intent can be shown.

In a rule issued in February 2013, the Department of Housing and Urban Development clarified the formula for deciding disparate-impact housing cases: If the plaintiff can demonstrate that a practice has a discriminatory effect, the burden shifts to the defendant to show that the practice serves a substantial, nondiscriminatory interest that can’t be served by a less discriminatory means. If the defendant meets that burden, the plaintiff can still win by showing that, in fact, there is a less discriminatory means that would serve the defendant’s needs.

Note this means that a policy with a disparate impact that also has a valid justification and no less-discriminatory alternative is legal. For that reason, there are plenty of legitimate housing restrictions and requirements that disproportionately affect minorities today–like occupancy limits, credit score standards and income verification.

number of high-profile disparate impact cases have been settled in the past few years alone. Many focused on financial institutions and lenders that were accused of offering less favorable rates and services, on average, to minority customers than to white customers.

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The National Fair Housing Alliance reported that 27,352 housing discrimination complaints were made nationwide in 2013. The organization estimates that at least 4 million violations actually occur each year.

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On Jan. 21, the justices heard oral arguments in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. The Dallas-area nonprofit, which promotes racially and economically diverse communities, filed suit after finding that for the past few decades, the Texas housing department had allocated almost all affordable-housing tax credits to developments in minority neighborhoods, while denying credits to those in white neighborhoods. This effectively kept low-income residents from moving to white communities. The nonprofit is raising a disparate impact claim under the Fair Housing Act.

The Texas agency, unable to show there was no less-discriminatory alternative to its practice, lost the case in federal district court and in the U.S. Court of Appeals for the 5th Circuit. It petitioned the Supreme Court to rule for the first time on the overall permissibility of disparate impact claims under the Fair Housing Act. Court watchers suggest the decision may come down to Justice Antonin Scalia, who during oral arguments indicated sympathy with both sides.

Opponents argue that disparate impact claims are unfair to policymakers, financial institutions and property owners. If housing policies and practices are instituted for legitimate reasons based on race-neutral criteria, the basic argument goes, then they should be legal despite any unintended discriminatory effects–and the people who implement those policies and practices should not be blamed.

During oral arguments, Texas Solicitor General Scott Keller suggested another problem: that housing officials and developers wary of possible Fair Housing Act lawsuits might make race-conscious decisions in favor of minorities, creating “the functional equivalent of a quota system.” This would raise constitutional issues of its own.

Other critics have expressed concerns that the idea of disparate impact is too fluid–that just because a practice unevenly affects a minority group doesn’t mean that it harms the group or that it doesn’t help other minority groups.

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Fair housing advocates remain concerned–in part because this is the third time the Supreme Court has agreed to consider disparate impact claims under the Fair Housing Act in less than four years. The two earlier cases were each settled less than a month before they were heard by the justices. Civil rights groups, which pushed for those settlements, worry that the justices’ eagerness to rule on this issue could spell trouble.

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“The way to stop discrimination on the basis of race is to stop discriminating on the basis of race,” Chief Justice John Roberts wrote in a 2007 decision on school desegregation in Seattle. That sounds simple enough, but such a focus on explicit racial preferences overlooks the issues of structural discrimination–the kind found in housing and other areas today.

In 2009, the Supreme Court declared that New Haven, Connecticut, had violated the civil rights of white firefighters when it threw out a promotion exam that no black firefighter had passed. The city took the racial gap in exam results as a sign that the test itself might violate employment protections under the Civil Rights Act, but the court ruled against New Haven. In 2013, the Supreme Court gutted a key section of the Voting Rights Act that determined which states had to obtain pre-approval from the federal government before making changes to their voting systems. And last year, the justices upheld a Michigan ban on affirmative action, declaring that a state’s voters can prohibit the use of race as a factor in college admissions.

As ProPublica noted, a ruling against disparate impact claims this year would give the Roberts Court a dubious hat trick: It would have effectively undermined the three most substantial civil rights laws of the 1960s–the 1964 Civil Rights Act, the 1965 Voting Rights Act and the 1968 Fair Housing Act.

Whatever the Supreme Court decides in the current case, some of the justices are clearly unconvinced that discrimination not driven by overt bias is a problem, or at least one that the law should take a stand against.

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