Supreme Court Upholds Disparate Impact Claims in Fair Housing Law

A divided U.S. Supreme Court (5 to 4) found that the Fair Housing Act (42 U.S.C. § 3601 et seq.) prohibits what might otherwise be viewed as a neutral practice but which has a disparate impact on minorities even though there might be no intentional discrimination. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371. Using a long-standing legal argument, but one which had never been addressed directly by the Supreme Court, Inclusive Communities Project, Inc., claimed that, notwithstanding that there was no direct intent to discriminate against minorities, the Texas Department of Housing and Community Affairs allocation of tax credits to developers had a disparate impact on minorities and was thus prohibited under the FHA.

In this case the plaintiffs were allowed to use statistics to show that the Department's policy had a negative impact on black residents. Justice Kennedy's majority opinion found that congress had affirmed prior judicial interpretation that the FHA's language included claims of disparate impact and that disparate impact claims are central to the FHA's purpose of banning discrimination because of race.  Such claims "counteract unconscious prejudices and disguised animus that escape easy classification as disparate impact." 

Yet the Court states there are limitations to disparate impact claims.  Plaintiffs must "point to a defendant's policy or policies causing that disparity", and defendants in disparate impact cases must be given "leeway to state and explain the valid interest served by their policies."  The opinion ends by acknowledging "the Fair Housing Act's continuing role in moving the Nation toward a more integrated society."