Civil rights fight is first test before the Supreme Court to pit Paxton vs Obama

Other states, and many cities, fear the high court will strike down anti-discrimination tool

By Kimberly Reeves

Credited to:  HARVEY KRONBERG’S QUORUM REPORT   January 21, 2015

Newly-minted Texas Solicitor General Scott Keller faces his first test before the Supreme Court today as the state pushes back against charges that civil rights claims should apply to the Fair Housing Act.

It is another case pitting a Texas agency against the Obama administration. Obama’s Department of Housing and Urban Development issued rules in 2013 that makes it clear that disparate-impact claims do apply to the Fair Housing Act. Disparate-impact claims are ones that consider a pattern of decisions that use federal dollars and have a discriminatory impact on people, whether that impact is intended or not.

The plaintiff in this case, Inclusive Communities Project, alleges the Texas Department of Housing and Community Development bypassed viable proposals for tax-credit projects in middle-income neighborhoods around Dallas in favor of project proposals that clustered projects in racially segregated neighborhoods. Intentional or not, the outcome was limited economic and educational opportunities for residents, according to Inclusive Community Project’s claims.

Inclusive Communities was created as part of a 1990 HUD consent decree order that acknowledged the Dallas Housing Authoritypractices had racially segregated the city. This case claims THCDA’s Dallas-area awards have perpetuated earlier patterns of racial segregation, focusing tax credit projects on a small number of census tracts.

Inclusive Communities’ brief, filed by the group’s long-time attorney Michael Daniel, traces the history of segregation in Dallas, including the creation of a Negro District in 1947. When suburbs refused to accept public housing in 1978, the problem was exacerbated, pushing minority communities into smaller and smaller areas. Local government perpetuated the idea of acceptable segregation, Daniel wrote. The Dallas City Charter, for instance, incorporated the idea of “separate but equal” neighborhoods, a practice the 1990 HUD consent decree acknowledged.

“TDHCA’sselection and allocation of (Low Income Housing Tax Credit) units in the City of Dallas was the functional equivalent of intentional racial segregation,” wrote Daniel.

“Whether there was deliberate racial bias or not, TDHCA achieved the same segregated result as if there had been an explicit decision to engage in racial segregation. TDHCA has not just perpetuated but exacerbated the exact discriminatory effects of racial segregation that Congress passed the FHA to remedy.”

Civil rights groups, a handful of states and even former HUD Secretary Henry Cisneros filed amici briefs in favor of the respondents. Cisneros, joined by a bipartisan list of federal housing officials from past administrations, argued the Fair Housing Act vested federal officials to weigh in on discrimination claims to protect the act’s original intention, which was “expanding housing opportunities for all.”

The housing industry, on the other hand, considers the nature of such civil rights claims to be capricious, especially if the claim is based on years of unrelated past decisions. Housing authorities and apartment associations were joined by the insurance and finance industry in their amici briefs to support the Texas objections.

“Disparate impact liability is based upon a judge-made rule that is not supported by the text of theFHAct,” according to the brief filed by the National Leased Housing Association and its allies. “As applied, disparate impact liability has created a series of intractable problems in practice that underscore how inappropriate it is in the context of combatting housing discrimination.”

The brief argues the text of the Fair Housing Act applies only to intentional acts of discrimination, such as turning away potential tenants based on race. The HUD rules passed in 2013 created liability not intended by Congress, according to the brief.

This is the third time the U.S. Supreme Court has tried to parse this civil rights issue, and it’s not apparent the high court will favor the Obama administration’s view. From the perspective of housing industry, and those who finance or insure it, a decision favoring liability for discrimination, unintentional or not, could have a significant chilling effect for the lower-income housing market.

Monday October 6, 2014

Supreme Court Agrees to Hear Texas Disparate Impact Fair Housing Case
Posted: 10/3/2014
On October 2, the Supreme Court announced its decision to take up the Texas Department of Housing and Community Affairs (TDHCA) v. Inclusive Communities Project case, which focuses on whether TDHCA violated the Fair Housing Act by disproportionately awarding Housing Credits to developers building properties in areas with high minority concentrations.  TDHCA is appealing the ruling of the Fifth Circuit Court of Appeals ordering the agency to change the way it distributes housing resources so that they are spread more uniformly across neighborhoods of various racial makeup.  Disparate impact, which originated in reference to employment policies and practice, is the legal theory that prohibits practices that have an adverse impact on members of a protected class, even if there is no intentional discrimination.  This is the third time that the Court has taken up the issue of disparate impact under the Fair Housing Act; however, the two previous cases were settled prior to oral arguments.

The National Council of State Housing Agencies, known as NCSHA, is a national nonprofit, nonpartisan association that advocates on behalf of HFAs before Congress and the Administration for affordable housing resources. It represents the HFAs of the 50 states, New 


TDHCA Collection of Documents from ICP v. TDHCA

March 26, 2014

Inclusive Communities Project

Inclusive Communities Project

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