Search Results for ‘housing disparate impact’

Housing disparate impact returns to the Supreme Court

Daniel Fisher recounts oral argument in the case of Texas Dept. of Housing vs. The Inclusive Communities Project. Roger Clegg (more) and Terry Eastland comment on a “to exclude one is implicitly to include all others” argument made by some on the liberal side.

Interviewed at HousingWire, Mike Skojec of Ballard Spahr predicts major consequences from the case (including, paradoxically or otherwise, higher costs for the building of “affordable” housing should the liberal side win) and has this to say about how disparate-impact advocates have overplayed their hand:

In some disparate impact cases, the theory has worked effectively to lessen racial discrimination and the perpetuation of illegal segregation. However, the substantial increase in the use of the theory by advocacy groups and HUD for many kinds of claims for which it should not be used, such as how risk is evaluated in selling property insurance or how management companies screen the risk of criminal conduct and other bad acts by possible tenants, has caused the theory to be attacked and probably struck down.

Why “probably” struck down? Well, there are many signals of the Court’s intention:

The Court has wanted to examine this issue, as evidenced by accepting cert three times. It has repeatedly said that it only wanted to look at whether disparate impact applies under the Fair Housing Act and not what standard would apply if it does exist, even though there are many circuit court decisions using disparate impact, and they have used conflicting standards. Typically, the Court would want to decide an issue that is in conflict between the circuits, especially here, where HUD has already tried to resolve the conflicts with a rule. The Court’s refusal to consider a standard suggests that the majority of the justices already know disparate impact will no longer apply under the Fair Housing Act.

Judge rules against housing disparate impact theory

The Obama Administration has repeatedly dodged cases in fear of judicial review of its controversial application of the disparate impact theory to mortgage lending and other aspects of the housing market, but its position has now met with a stiff rebuke from district court judge Richard Leon [Insurance Journal]:

“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Leon wrote.

He called the rule “nothing less than an artful misinterpretation of Congress’s intent that is, frankly, too clever by half.”

Will SCOTUS finally rule on “disparate-impact” housing theory?

Under the “disparate impact” theory of housing discrimination, private business decisions or local government policies not motivated by race are deemed unlawful anyway because they have a differential statistical impact on housing transactions by members of a given racial group. A mortgage lender’s policy of lending only to borrowers with high down payments or sterling credit ratings, for example, might be subject to attack on the grounds that it tended to screen out minority borrowers, even if such was not its intention, and was not justified by business necessity. The U.S. Supreme Court has never ruled on this theory; two years ago, in a case called Magner v. Gallagher, it was widely speculated that the Court would disapprove disparate-impact claims, a prospect the Obama administration (which is deeply invested in the theory) managed to dodge only by arranging to moot the case through settlement.

In the new Supreme Court case of Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., plaintiffs claim that it is illegal for a New Jersey township to slate a tract of development land for detached single-family housing because poorer persons are less likely to be able to afford such housing and minority persons are more likely to be poorer. The Obama administration is backing the claim. [earlier] The Cato Institute, along with the Pacific Legal Foundation and several other groups, has filed an amicus brief defending the township. Writes Ilya Shapiro at Cato at Liberty:

The Gardens’ residents can’t afford the new housing not because of their race but because of their poverty. While it’s a harsh truth that a disproportionate number of minorities live in poverty, claiming that making expensive products is racist and that these “racists” have an obligation to compensate the victims of poverty is absurd. The FHA was intended, in the words of Senator Walter Mondale, “to permit people who have the ability to do so to buy any house offered to the public if they can afford to buy it. It would not overcome the economic problem of those who could not afford to purchase the house of their choice.”

For following the law as it was written and attempting to improve a blighted neighborhood without resorting to eminent domain abuse, Mount Holly was rewarded with a decade’s worth of vexatious litigation — which the Supreme Court should now end once and for all.

More: Hans Bader, Examiner.

Feds’ dodgy tactics in housing-disparate-impact case

If you’ll drop Magner v. Gallagher, your case against us before the Supreme Court, we’ll drop this other big case we’ve filed against you, the Department of Justice told the city of St. Paul, Minnesota. And thus the government averted an embarrassing high court opinion reining in some of its most avant-garde lending-discrimination theories [American Banker, Kevin Funnell/Bank Lawyer’s Blog, WSJ, Hans Bader, Ted Frank]

“Denying Housing Over Criminal Record May Be Discrimination, Feds Say”

HUD to private landlords: from now on, prepare to defend a discrimination suit if you decline to rent to felons. After all, any such rule might have disparate impact on members of protected groups. [NPR] Julia Vitullo-Martin writes: “Amazing, given that government — in the form of public housing — has refused to rent to felons since Clinton administration reforms.”

“Stop calling it fair housing…”

…There’s nothing fair about it. I’ve got a post at Cato about yesterday’s important Supreme Court victory for the Left in which Justice Anthony Kennedy joined the four liberals to hold that current federal law allows housing suits based on “disparate impact” theories. I explain why pundits are being silly when they claim that the Court “saved” the Fair Housing Act or that a contrary ruling would have “gutted” it, and why Samuel Alito and Clarence Thomas were right in their dissents to spotlight the shaky basis of the theory in the statutory text, going back to the original disparate-impact case, Griggs v. Duke Power.

True, Kennedy did throw a sop or two about how courts applying disparate impact need to avoid pressuring actors toward the potentially unconstitutional result of quotas. Although some consider these bits of wording significant, I suspect that will mean about as much as similar sops that the Court has thrown over the years about avoiding quotas in employment and education, i.e., not much. Others, such as Cory Andrews of WLF, point to Kennedy language suggesting (on what statutory basis is not entirely clear) that disparate impact scrutiny might be limited to “artificial, arbitrary, and unnecessary” practices, a narrowness of approach not seen in other disparate-impact contexts. How administrable such a standard might prove, or how much litigation will be needed before it is clarified, is anyone’s guess.

Some further background on Texas Department of Housing and Community Affairs v. Inclusive Communities Project: SCOTUSBlog, Cato’s brief in the case and earlier coverage by Ilya Shapiro and company here and here, and my podcast.

Housing roundup

  • Danegeld: Wells Fargo agrees to pay $42 million to settle activist groups’ exotic legal claims re: REO property; much will directly go to support the groups [BLT]
  • On horrors of San Francisco landlordship, “Pacific Heights” still all too realistic [David Boaz, Cato]
  • Problem in Thomas Perez/HUD/St. Paul affair was not that DoJ chose to settle in such a way as to minimize its losses, but that it had pursued such a weak case in the first place [Richard Painter]
  • Dean Zarras on HUD v. Westchester [Forbes; our two cents] HUD embraces disparate-impact theory [Kevin Funnell, Arnold Kling]
  • Why did the mortgage market collapse? [Foote et al via @tylercowen]
  • Shorter Ta-Nehisi Coates: flaws of rent-to-own housing in ’50s Chicago prove US economic arrangements are a plot to immiserate blacks [The Atlantic] Yet Sinclair’s The Jungle, set 40 years before, showed very similar housing scams being played on Slavic newcomers.
  • Minnesota high court dodges Fourth Amendment worries re: rental inspection program [Ilya Shapiro, Cato, link fixed now]

Supreme Court roundup

  • Perez v. Mortgage Bankers: can agency escape notice-and-comment requirements for new rulemaking by couching edict as other than a rule? [The Hill]
  • Contrary to imaginings in some quarters, anti-business side doesn’t lack for access to front-rank Supreme Court advocates [Tom Goldstein, SCOTUSBlog]
  • Speaking of which, Alison Frankel’s profile of Prof. Samuel Issacharoff’s work on behalf of class actions illuminates little-seen world of cert practice [Reuters]
  • After two near misses, it’s time for Justices to turn thumbs down on housing disparate impact theory [Ilya Shapiro and Gabriel Latner, Cato]
  • Integrity Staffing v. Busk: Court unanimously rules Fair Labor Standards Act does not require overtime pay for security screening after work [SCOTUSBlog, Michael Fox, On Labor, Daniel Fisher, Dan Schwartz]
  • “Religious Liberties for Corporations? Hobby Lobby, the Affordable Care Act, and the Constitution” [Cato panel discussion with Roger Pilon, Ilya Shapiro, Randy Barnett, David Gans]
  • Some local governments presume to license local tour guides, which amounts to requiring a license to speak [Shapiro and Latner, Cato]
  • More: 1997 flap over sculpture of Muhammad in Supreme Court building mostly subsided after Islamic scholar interpreted it as gesture of goodwill [Jacob Gershman, WSJ Law Blog]

Supreme Court roundup

  • Sorry, National Review, but the marriage rulings are really nothing at all like Dred Scott [my new piece at The Daily Beast] Or Roe v. Wade either [Dale Carpenter, Ilya Shapiro, Charles Lane]
  • Ninth Circuit won’t get the message about not expropriating raisin farmers and it’s time for the Court to remind it again [also Ilya Shapiro, earlier]
  • Private businesses, even those that are quasi-public like Amtrak, shouldn’t be delegated the right to regulate their competitors [Ilya Shapiro yet a third time]
  • “Supreme Court takes case on duration of traffic stops” [Orin Kerr, Rodriguez v. United States]
  • Housing disparate impact theory, dodged by administration last time around, returns to Court [Bloomberg, Daniel Fisher; Texas Department of Housing and Community Affairs v. The Inclusive Communities Project; earlier]
  • Noteworthy feature of just-argued wage-and-hour case is that Obama Department of Labor is taking the employer side [Denniston, SCOTUSBlog; Integrity Staffing Solutions v. Busk]
  • “Supreme Court to hear case on right of Maryland to tax out-of-state income” [Ashley Westerman, Capital News Service]
  • Mark your calendar if in D.C.: I’ll be moderating a Nov. 3 talk at Cato by Damon Root about his new book Overruled: The Long War for Control of the U.S. Supreme Court, with commentary from Roger Pilon and Jeffrey Rosen [Reason]