The California Department of Fair Employment and Housing has agreed to stop investigating citizens on the theory that their political speech in and of itself constitutes a potential violation of housing discrimination laws. I’ve got more on the case at Cato at Liberty. Related earlier here and here.
Posts Tagged ‘housing discrimination’
Another Craigslist housing-ad crackdown
Massachusetts Attorney General Martha Coakley nails twenty property owners and real estate agents over “no kids”, “no Section 8” language in Craigslist ads [Legal NewsLine]
“Landlord on hook for up to $44K even though bias case was dropped”
Dan Bader came to be “embroiled in a messy dispute with the state Department of Fair Employment and Housing and the Fair Housing Council of Orange County” when he used Craigslist to advertise a rental unit in his Newport Beach home as “Well suited for professional adults” and “Perfect for 1 or 2 professionals.” As the Orange County Register relates, it never resulted in an actual courtroom loss; the process was the punishment. Bader has a website on the experience: StateGoneCrazy.com (more on Craigslist and the wording of housing ads here, here, etc.).
Fat is the New Black
Progressive members of the City Council of Binghamton New York have expanded the boundaries of civil rights in their fair city to include protection for citizens on the basis of sexual orientation, nothing shocking in a university town. What is surprising is that the law also protects Binghamton citizens from discrimination in employment, housing, education, and public accommodation on the basis of height and weight. Presumably in the future, Binghamton bean poles will have to yield to their shorter peers for slots on basketball teams, and the horizontally expansive will be able to demand wider doors and sturdier seats in restaurants and shops.
According to the law’s chief proponent, Binghamton Council member Sean Massey, it is a “sad fact” that a law protecting the undertall or the overweight is necessary, and even if it isn’t, “It’s simply the right thing to do. … It is the human thing to do.”
While it’s not at all clear to me, from a simple google search, that Binghamton was experiencing a tide of discrimination against the short, the tall, the fat, or the cadaverous before the passage of this law, it’s also unclear how this law will in fact promote its author’s vision of Harrison Bergeronlike equality of outcome for people of nonstandard body configuration. Will morbidly obese firemen be able to sue the city for discrimination if they are not provided assistance in climbing ladders and carrying victims? Will students whose body mass makes them unappealing by conventional standards of good looks now demand appointment as homecoming kings and queens on the ground that they are denied a fair shot in student elections? And how, exactly, will the city determine that someone was denied housing on the basis of height or weight? While one assumes that signs reading “Fat people need not apply” are being removed from apartments all over Binghamton, apart from that what does this accomplish, other than making the Binghamton City Council feel good? Gannett: “Council Passes Rights Law”, Weekly Standard: “The Politics of Fat”, thanks to dispatches from TJICistan for the pointer.
Craigslist housing ads
Did redlining accusations lead to the subprime mortgage mess?
Stan Liebowitz writes in the New York Post:
Perhaps the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards – done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults. …
In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide’s chief executive bragged that, to approve minority applications that would otherwise be rejected “lenders have had to stretch the rules a bit.” He’s not bragging now.
I’m not sure I entirely agree, but it’s an element we should be considering as we look at the new complaints of “racial discrimination” through excessive sub-prime loans.
Racially “targeting” predatory subprime loans? The NAACP and Baltimore suits
Cross-posted from Point of Law.
Says the NAACP complaint: “In 2004, African-American homeowners who received subprime mortgage loans from Defendants were over 30% more likely to be issued a higher-rate loan than Caucasian borrowers with the same qualifications.” (¶ 1.) Thus, it concludes, the disparity “result[s] from a systematic and predatory targeting of African-Americans.” (¶ 6.)
Similarly, Baltimore’s suit argues that Wells Fargo is more likely to foreclose in African-American neighborhoods—and that suit does not even attempt to adjust for similar qualifications or finances, just alleging racial disparity.
Of course, there is a difference between being targeted for a subprime mortgage loan and accepting a subprime mortgage loan. And I don’t believe that African-American homeowners were targeted for subprime mortgage loans because they were African-American. They were targeted because they were homeowners.
Between 2001 and 2005, I was a law-firm associate, high-income, making multiples of what I make today at a thinktank. And, like I am today, I was also white. And the minute my adjustable-rate mortgage was registered in the title books in 2001, I got several solicitations a week in the mail from fly-by-night mortgage brokers offering to refinance my mortgage with ludicrous financial products. (And when I made the mistake of investigating on-line options for switching to a fixed-rate mortgage in 2004, I also got several e-mails a day and phone-calls a month on the same basis to the point that I switched e-mail providers.)
Somehow, I resisted refinancing with a mortgage that was not favorable to me in the long run—I took a 5.25% fixed-rate instead. But I sure was targeted with subprime opportunities, especially as the real-estate prices in my neighborhood skyrocketed about 10% a year. And if, with my skin-color, income, education-level, and impeccable credit-score, I was targeted, so was every homeowner and their grandmother.
To the extent a statistical study says minorities were, ceteris paribus, more likely to receive unfavorable mortgages than whites, the study reflects a specification error, perhaps in failing to account for different levels of consumer education. Another possibility: there is a lot of state-by-state regulation of the mortgage industry. Are subprime mortgages more likely in states with high minority populations, for example? Are subprime mortgage brokers more likely to be aggressive in urban areas in states on the coasts where real estate prices were increasing faster than average, and those states correspond to states with high minority populations?
Note that the CRL study that has been driving the debate and highlighted in the NAACP suit finds that for many types of loans, whites were “disadvantaged” relative to Hispanics, which would seem to count against a racial explanation (unless one believes that bankers hold a racial animus against whites and towards Hispanics) and more towards a geographic explanation.
Note also the irony that these same defendants were accused of failing to offer loans to African-Americans just a few years ago. (See also Apr. 1.)
Finally, note that the NAACP complaint is legally frivolous in at least one respect because of the lack of standing in a federal court. Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (2006) (no § 1981 standing for third parties). (Baltimore brings no § 1981 claim.) Fair Housing Act standing is questionable, too, given the lack of allegation of injury to NAACP in particular, though that could be fairly easily rectified by an amended complaint, especially in the Ninth Circuit. Cf. Spann v. Colonial Vill., Inc., 899 F.2d 24 (D.C. Cir. 1990) (“[a]n organization cannot, of course, manufacture the injury necessary to maintain a suit from its expenditure of resources on that very suit”) (R. Bader Ginsburg, J.); Fair Housing of Marin v. Combs, 285 F.3d 899, 902 (9th Cir. 2002). N.B. that there is an amended version of the NAACP complaint that may already fix these issues. NAACP v. Ameriquest Mortgage Co., No. 8:07-cv-00794-AG-AN (C.D. Cal.). For some reason, this is not available on PACER, so I haven’t seen it.
Related: Jan. 8 (Krauss on Baltimore suit); Apr. 25 (me on third-party liability for subprime lending).
(Disclosure: I own less than $15,000 in stock in Citigroup, one of the defendants in the case.)
Protest a group home, get investigated for housing bias
They’re doing it again in California: “State and federal authorities have opened an investigation into a Norco housewife, alleging that her vitriolic protests against a high-risk group home in her neighborhood may constitute housing discrimination.” Federal officials asked state fair housing regulators to investigate Julie Waltz, 61, who had protested plans to open a group house next to her home for developmentally disabled residents; among those eligible to reside there under state law would be persons deemed not competent to stand trial on sex crime charges. In 2000, the Ninth Circuit ruled that three Berkeley, Calif. neighbors’ rights had been violated by an “extraordinarily intrusive and chilling” investigation of whether their protests had been contrary to housing discrimination law. In that episode, as in the latest one, housing advocates had set the investigation in motion by filing complaints against the neighbors.
A spokesman for the federal Department of Housing and Urban Development acknowledged that in order to recommend the inquiry, it had to push aside internal guidelines that prohibit such an investigation because it infringes on the 1st Amendment.
The rules require that complaints of housing discrimination be investigated only in cases in which the alleged victim’s safety has been threatened.
No such allegation has been made against Waltz, but HUD opened an investigation into her and state investigators ordered her to respond to the complaint in detail because a preliminary review showed that someone else in the neighborhood may have made a violent threat, said HUD spokesman Larry Bush.
(Garrett Therolf, “Protester of group home is targeted”, Los Angeles Times, Mar. 20).
Craigslist classifieds suit
Google, Amazon, AOL and Yahoo are all defending Craigslist in the suit demanding that it censor its housing ads so as to prevent users from requesting “gay Latino sought for roomshare” and the like (Lynne Marek, “Online Peers Stand Up for Craigslist in Lawsuit”, National Law Journal, Jun. 28). Earlier coverage: Aug. 10, 2005; Feb. 9, Feb. 20, Mar. 6, 2006. Craigslist’s defense, by CEO Jim Buckmaster, is here.
Suing Craigslist — with your money
The federal taxpayer, by way of the Department of Housing and Urban Development, funnels substantial sums to private “fair housing” advocacy groups for purposes of suing landlords, newspapers, and other likely suspects over alleged housing discrimination; raising consciousness among potential claimants and others; and generally promoting expansive readings of housing-bias law. For example, in this listing of $20 million worth of fiscal 2002 grants, HUD boasts of bestowing $242,339 on the Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. for something called its Private Enforcement Initiative (PEI), described as follows:
While addressing the needs of minorities in the metropolitan Chicago area, the Chicago Lawyers’ Committee for Civil Rights will increase awareness of fair housing rights; empower victims to report incidents of discrimination; develop credible, legitimate evidence to support discrimination complaints; increase the number of complaints referred to HUD for enforcement; and provide relief to discrimination victims. Utilizing access to pro bono attorneys from Chicago’s most prominent law firms, as well as their resources, the Chicago Lawyers’ Committee will receive, document, and investigate individual complaints of discrimination.
If the Chicago Lawyers’ Committee sounds vaguely familiar, it’s probably because it’s the group that last month filed a widely criticized lawsuit against Craigslist (Feb. 9, Feb. 20) seeking to force the online service to pre-censor users’ postings of roommate and other housing classifieds (rather than just pull them off after complaints, as now).
Even if the Chicago Lawyers’ Committee suit fails in court — as is widely expected — the controversy is likely to continue. In yesterday’s New York Times, Adam Liptak says the activists are likely to push for federal legislation stripping website operators of their current protection against being held liable for users’ postings. (“The Ads Discriminate, but Does the Web?”, Mar. 5). Don’t assume that “fair housing” advocates are powerless on Capitol Hill these days, either: at one set of hearings last week, all the witnesses called (including this one (PDF), quoted in the Times piece) were there to speak up for expansive enforcement of the law, with nary a dissenting word about any possible competing values at stake. More: Maggie’s Farm.