1. AVOIDING DISPARATE IMPACT CLAIMS UNDER THE FAIR HOUSING ACT

2. The Fair Housing Act  It is unlawful to make a dwelling unavailable to any person because of race, color, religion, sex, familial status, national origin, or handicap. 42 USC § 3604(a)-(f)  It is unlawful to discriminate against any person in a real estate related transaction (terms or conditions) because they are a member of a protected class. 42 USC § 3605(a)

3. What is a Disparate Impact Claim?  A policy or practice that has or will have a discriminatory effect [disproportionally adverse to a protected class].  Often neutral on its face.  No requirement of discriminatory intent or motive.  Liability based upon consequence of actions.

4. Texas Department of Housing and Community Affairs et al. v. Inclusive Communities Project, Inc. et al. U.S. Supreme Court decided June 25, 2015  Does the Fair Housing Act allow ICP to bring a disparate impact claim alleging the Department caused continued segregation housing patterns by allocating too many tax credits to housing in predominately black inner-city areas and too few to predominately white suburban neighborhoods?

5. Yes, but…  Scope of disparate income claims narrowed.  USSC decision did not decide merits of claim

6. USSC Decision Focuses on Limiting Disparate Impact Claims to Avoid Abuse.  Burden shifting  Plaintiff’s showing of statistical disparity alone is insufficient to make a prima facie disparate impact case  Must also show how a neutral law, rule, or policy causes that disparity  Disparate impact applies to general laws, rules, policies, or programs, not in the context of one-time decisions or actions  Regulations necessary to achieve valid, non- discriminatory governmental interests can overcome demonstrations of disparate impact by plaintiffs

7. Burden Shifting  Initial burden on Plaintiff to prove a challenged practice caused or will cause a discriminatory effect.  If factors other than challenged practice, no causation, nor liability.  Burden shifts to Defendant to prove that the challenged practice is necessary to achieve substantial legitimate nondiscriminatory interests.

8. Burden Shifting cont’d.  Burden shifts back to Plaintiff to prove that the Defendant’s nondiscriminatory interests could be served by another practice that has a less discriminatory effect.  Plaintiff must show that there is an available alternative practice that has less disparate impact and will still serve the entities legitimate needs.  Disparate impact liability mandates the removal of artificial, arbitrary and unnecessary barriers, not the displacement of valid governmental policies.

9. The Remedy in Disparate Impact Cases  The remedy for disparate impact cases should concentrate on the elimination of the offending practice.  Government and private priorities must be achieved without arbitrarily creating discriminatory effects or perpetuating segregation.

10. Disparate Impact Case Examples  Tax Credit allocation  Zoning law preventing construction of multifamily dwellings  Ordinance restricting rental of housing to relatives

11. Practical Implications  Review ALL “general laws, policies, rules or programs” for unintentional income segregation  Which is likely correlated with racial/ethnic segregation

12. Practical Implications  Before adopting any policy or practice, ask:  likelihood to negatively impact a protected class compared to the general population?  necessity to achieve substantial legitimate, non- discriminatory interest?  option of a less discriminatory alternative?

13. Data Supported Decision Making  Demographics & mapping:  Community  Neighborhoods  Tenants/Owners  Strategic Planning  Subsidized/Assisted Housing Usage & location  Proximity to services/transit/jobs  Geographic barriers  Neighborhood Affinity vs. Gentrification

14. Zoning barriers can include:  Restrictions on use  Higher quality standards for some types of facilities  Additional procedural steps for some types of facilities (allowed by-right vs. CUP)  Minimum lot sizes  Higher Density Residential  Be aware of exclusions/limits on attached or multifamily housing and group homes

15. Other barriers can include:  Allocation of housing funds  Housing provider tenant  Housing provider application  Lender loan issuance  Homeowner insurance rating

16. Disability Accommodations  Always provide an avenue for “reasonable accommodations”  Accommodating a project can avoid a facial challenge

17. Resources  HUD Disparate Impact Final rule issued February 2013 - HUD 24 CFR 100.500  http://www.huduser.gov/portal/affht_pt.html#dat aTool-tab http://www.huduser.gov/portal/affht_pt.html#dat aTool-tab  In proposed guidance on the obligation to Affirmatively Further Fair Housing released in July 2013, HUD announced the creation of a uniform data set to assist program participants in identifying housing needs and conducting disparate impact analyses