Genevieve Pagan and Isabela Lyrio
July 15, 2015
Supreme Court upholds key tool for fighting housing bias by ruling on Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, challenging race-neutral policies that have negative effects on minorities
History and Context
The Fair Housing Act, part of the Civil Rights Act of 1968, prohibits discrimination based on race, color, national origin, religion, sex, familial status and disability in the sale, rental and financing of housing-related transactions. Intentional discrimination resulting in disparate treatment is forbidden.
Despite this legislation, there is historical evidence to show that in major urban centers across the country, minorities still face more challenges in the housing sector compared to the majority-white population. Progress since the Act was passed has been limited by discriminatory segregating housing practices that have been enabled by governmental decisions and private actions.
Racial segregation is a persistent and deeply rooted problem in the United States that has been reinforced by federal housing policy. Developers of subsidized housing, along with local governments, have located subsidized housing in impoverished, often minority dominated, neighborhoods, and not in socio-economically integrated areas that would offer minority citizens accessibility to jobs and schools that they need.
The U.S. Department of Housing and Urban Development released a report in June 2013 of over 8,000 tests conducted across 28 metropolitan areas identifying the extent of racial inequality in the housing sector. Subjects whose ethnicity may be mistaken for white experience considerably less discrimination than those who are more evidently minorities. The report found that discrimination exists in all the major metropolitan areas of the U.S. included in the study, taking different forms depending on the demographic composition of the city. In each of the cities, the white majority received better treatment by housing providers and was presented with more housing options. Overall, the research finds minority renters are told about 10–12 percent fewer units than whites and are shown 4–7 percent fewer places by agents. Among potential homeowners, Blacks are most discriminated against, learning about 17 percent fewer available homes and being shown 18 percent fewer than whites. Asians are told about 15 percent fewer homes and view 19 percent fewer, while the discrimination against Hispanic homebuyers was not statistically significant. Additionally, some local governments have used zoning power to indirectly control who may live within their boundaries. According to The Leadership Conference on Civil and Human Rights, exclusionary zoning and land use decisions have been barriers to building affordable housing in predominantly White neighborhoods in local jurisdictions with an inevitable segregative and discriminatory impact on minorities.
For example, the Minneapolis-St. Paul region has become more segregated than demographically comparable metropolitan regions as a result of policies that place affordable housing in impoverished areas where there is a lack of economic infrastructure to support community development.
In an attempt to combat such local practice, earlier this year the Connecticut legislature took up a bill that would have required housing units supported by tax credits to be built in “high opportunity areas, where poverty is low and schools thrive,” but it failed to pass. Current state data in Connecticut shows that nearly three-quarters of tax credit housing has been placed in high poverty, minority areas.
Texas Department of Housing and Community Affairs v. The Inclusive Communities Project
On June 25th, the Supreme Court ruled that housing discrimination does not have to be intentional in order to be illegal. The decision upholds a key tool for civil rights advocates and lawyers to fight against housing discrimination for racial minorities. The Supreme Court reaffirmed a federal law passed in 1968 to combat housing discrimination.
The case, Texas Department of Housing and Community Affairs (TDHCA) v. The Inclusive Communities Project (ICP) began in 2008, when the ICP, a non-profit organization that seeks to promote racial integration in Dallas, sued a state agency charged with the allocation of tax credits to developers who build low-income housing projects. The ICP accused the Texas agency of disproportionately allocating the tax credits to properties in minority populated areas.
Housing authorities administer the distribution of Low Income Housing Tax Credits, which are federal tax credits distributed to low-income housing developers through an application process. The TDHCA, which administers the Low Income Housing Tax Credits within Texas, was sued by the ICP, being accused of disproportionately granting tax credits to developments within minority neighborhoods and denied the credits to developments within Caucasian neighborhoods. ICP claimed that this practice led to a concentration of low-income housing in minority neighborhoods leading to segregation in violation of the Fair Housing Act. At trial, the ICP attempted to show discrimination by disparate impact, and the District Court found that the allocation of tax credits constituted sufficient evidence for disparate impact.
In opposition to the ruling, Supreme Court Justice Clarence Thomas argued the court was in danger of constructing “a scheme that parcels out legal privileges to individuals on the basis of skin color.” Other skeptics, like Michael W. Sjojec, a lawyer who filed a brief on behalf of the Houston Housing Authority, claimed that this ruling is detrimental to the development of affordable housing because developers are now vulnerable to claims of disparate impact which will hamper their cooperation with housing authorities. “What we are trying to do is get people not to consider race, or think of people in racial terms,” he said. “The disparate impact concept encourages and requires people to think about race in every decision.”
The Supreme Court ruled 5-4, stating that people objecting to lending, zoning, sales and rental practices can base their legal claim on the disparate impact those practices have on blacks or other minorities. This means that federal housing law allows people to challenge lending rules, zoning laws and other housing practices that have a harmful impact on minority groups, even if there is no proof that companies or government agencies intended to discriminate.
The Obama administration weighed in against the TDHCA, noting that interpretation by the Department of Housing and Urban Development, the agency charged with administering the Fair Housing Act, allows disparate impact claims.
This ruling is of monumental importance for efforts to end housing discrimination and segregation in the United States. According to Sherrilyn Ifill, the NAACP Legal Defense Fund president and director-counsel, “Housing also represents opportunity and mobility and the Court’s ruling keeps the original spirit of fair housing guarantees intact. Today’s ruling signals a continuing commitment to equality will benefit future generations to come.” Justice Kennedy’s conclusion considers the future of low-income housing projects and housing integration: “[M]ere awareness of race in attempting to solve the problems facing inner cities does not doom that endeavor at the outset.”
Department of Housing and Urban Development Final Rule
On July 8, 2015, two weeks after the Supreme Court ruling, the Department of Housing and Urban Development released a final rule to assist HUD funded communities to meet their fair housing obligations. Until this point, the goals of promoting fair housing and equal opportunity as outlined by the Fair Housing Act of 1968 have been inconsistently interpreted and applied due to the complex nature of the application guidelines. The new rule establishes clear and simple procedures for HUD grantees to ensure that the goals are more definitively met.
The newly released rule clarifies the existing fair housing obligations to increase transparency and standardize the funding process, providing open data and mapping tools to the public, enabling community members to work on local initiatives, and expanding accessibility to reach equally to all Americans. This rule will come into effect 30 days after publication, and will be gradually phased into implementation.
HUD Secretary Julian Castro says that no child should have their future determined by their ZIP code, emphasizing that “strong communities are vital to the well-being and prosperity of families.”  The final Fair Housing rule will make it easier for local leaders to implement changes to their communities for the better, promoting access to education, employment, and transportation.
 Open Communities Alliance