Firm Articles
|
THE CENTER FOR AMERICAN & INTERNATIONAL LAW PLANNING, ZONING AND EMINENT DOMAIN RECENT USE OF FAIR HOUSING LAWS Terry D. Morgan Rene R. Pinson May 8-9, 2008 Recent Use of Fair Housing Laws to Challenge Zoning Regulations - The Second Wave §1.01. Introduction The Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601-3619, makes it unlawful to refuse to sell or rent, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status or national origin, or because of handicap. The purpose of the law is the eradication of discrimination in housing opportunities. This article explores how the FHA claims historically asserted against municipalities are now giving way to a new set of FHA claims led by developers and builders seeking to strike down zoning regulations that allegedly exclude protected classes by raising housing costs beyond affordability standards. §1.02. Discrimination Prohibited by the FHA Under the FHA, discrimination may occur either by disparate treatment or discriminatory effect. [1] Disparate Treatment The Fair Housing Act prohibits intentional discrimination or disparate treatment in the provision of housing through the exercise of municipal planning and zoning powers. A disparate treatment claim requires proof of differential treatment of similarly situated persons or groups.1 In addition, discrimination must be intentional.2 Evidence of the defendant’s discriminatory motive can be either direct or circumstantial.3 Direct evidence is typically in the form of discriminatory statements made by a municipal official. Without direct evidence of discrimination, a plaintiff must establish through circumstantial evidence that the defendant’s housing decision was based in a significant part on race.4 Factors that may be probative of racially discriminatory intent are (1) the racial impact of the official action, (2) the historical background of the housing decision, (3) the specific sequence of events leading up to the challenged housing decision, (4) departures from normal procedural sequences, (5) departures from normal substantive criteria, and (6) the legislative or administrative history of the decision.5 [2] Discriminatory Effect Governmental actions having a significant discriminatory effect, even if there is no discriminatory intent, are prohibited by the Fair Housing Act. Discriminatory effect can occur in two contexts: (1) adverse impacts on a particular minority group; and (2) harm to the community generally by the perpetuation of segregation.6 [a] Disparate Impact A disparate impact claim challenges a facially neutral policy or practice, such as a zoning regulation, that actually or predictably results in discrimination; in other words, it has a discriminatory effect.7 The fact that a land use regulation impacts a particular group does not alone establish a discriminatory effect. “To establish a prima facie case of disparate impact discrimination, plaintiffs must show that a specific policy caused a significant disparate effect on a protected group.”8 Further, the plaintiff need not show that the policy was formulated with discriminatory intent.9 In Arlington Heights II, the first court of appeals case concerning disparate impact under the FHA, the Seventh Circuit Court of Appeals set forth a four-factor test to determine whether an action producing a disparate effect violates the FHA. Its factors include: (1) how strong is the plaintiff’s showing of discriminatory effect; (2) is there some evidence of discriminatory intent, though not enough to satisfy the constitutional standard of Washington v. Davis [426 U.S. 229 (1976)]; (3) what is the defendant’s interest in taking the action complained of; and (4) does the plaintiff seek to compel the defendant to affirmatively provide housing for members of minority groups or merely to restrain the defendant from interfering with individual property owners who wish to provide such housing.10 Some courts, including the Tenth Circuit, have declined to adopt the discriminatory intent factor of the Arlington Heights II tests, recognizing instead that: Discriminatory intent is the basis of a disparate treatment claim. However, disparate impact claims are premised on policies or practices which are adopted without a discriminatory motive but which are functionally equivalent to intentional discrimination.11 [ii] Burden Shifting In response to confusion about the stage of the litigation at which the Arlington Heights II should be analyzed, the Second Circuit found that courts should consider the factors as part of a “final determination on the merits rather than as a requirement for a prima facie case.”12 The Second Circuit further established a burden-shifting framework that would require a plaintiff to first establish a prima facie case “by showing that the challenged practice of the defendant ‘actually or predictably results in racial discrimination.’” Once a plaintiff has presented a prima facie case, a defendant “must prove that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest and that no alternative would serve that interest with less discriminatory effect.”13 The First, Third, and Eight Circuits have not followed Huntington Branch’s framework for incorporating the Arlington II factors in an evaluation of the merits of the government defendant’s justification for the challenged action.14 The burden shifting standards used by these circuits are similar, with the only significant difference being that the Eighth Circuit requires plaintiffs to prove the existence of a less discriminatory alternative,15 while the Third Circuit requires defendants to prove the absence of such an alternative,16 and the First Circuit not yet determined the allocation of this burden.17 While the Fifth Circuit has not had the opportunity in which to fully develop the framework for assessing FHA disparate impact claims against governmental entities, at least one district court within the Fifth Circuit has followed the Huntington Branch analysis.18 [b] Perpetuation of Segregation Under the theory of perpetuation of segregation, a defendant’s housing policy can produce a discriminatory effect “on the community involved; if it perpetuates segregation and thereby prevents interracial association,” independent of any disparate impact of a protected class.19 However, a municipality has no affirmative obligation to desegregate racially concentrated areas under the FHA by building affordable housing for minority residents in white areas.20 Therefore, in order to prevail under the theory that a municipality has perpetuated segregation by its actions, plaintiffs must show that the municipality has erected a barrier to acquisition of such housing through its regulatory programs. The distinction between disparate impact and perpetuation of segregation claims can be seen in the context of the Eight Circuit’s decision in United States v. Black Jack, Missouri, 508 F.2d 1179 (8th Cir. 1974). In 1970, the City of Black Jack enacted an ordinance prohibiting the construction of any new multiple-family housing and made present ones nonconforming uses. The United States brought suit alleging that the ordinance violated the FHA and, in particular, that it precluded the construction of a low to moderate income integrated townhouse development known as Park View Heights. The district court concluded that the ordinance had no discriminatory effect, “because Park View Heights was designed to meet the needs of families earning between $5,000 and $10,000 per year- a class including 32 percent of the black population in the metropolitan area and 29 percent of the white population.”21 In other words, there was no showing of disparate impact. However, the Eighth Circuit Court of Appeals found that the district court had failed to take into account either the “ultimate effect” or the “historical context” of the City’s actions.22 “The ultimate effect of the ordinance was to foreclose 85 percent of the blacks living in the metropolitan area from obtaining housing in Black Jack, and to foreclose them at a time when 40 percent of them were living in substandard or overcrowded units.”23 The Court held that there was ample proof that many blacks would live in the development, and that the exclusion of the townhouses would contribute to the perpetuation of segregation in a community which was 99 percent white.24 §1.03. FHA Attacks on Land Use Regulations There are two distinct types of claims involving land use regulations and practices that have been brought under the FHA. The first category of cases, into which virtually all FHA claims have traditionally fallen, involve subsidized housing projects. The second category of FHA cases are part of a new wave of challenges aimed at traditional zoning techniques that allegedly exclude protected classes by raising housing costs beyond affordability standards. These cases typically involve a developer or builder seeking to strike down regulations that prevent it from constructing market-level housing. [1] Traditional FHA Claims The traditional FHA claims involve subsidized housing projects.25 Often these cases are brought by individual minority plaintiffs, non-profit organizations, and/or developers challenging a local government’s refusal to rezone a particular site for the plaintiff’s proposed subsidized multifamily housing project.26 In these cases, there is a direct relationship between the government’s actions and the alleged harm to minorities in need of housing: the project that is denied or excluded would be occupied by a significant number of minority households with incomes at levels where minorities are disproportionately represented (i.e., low and moderate income). Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2nd Cir. 1998) is the leading case for traditional FHA claim. This case was brought by non-profit organizations and individual minority plaintiffs against the Town of Huntington following its refusal to amend an ordinance which restricted private multifamily housing projects to a narrow urban renewal area to allow construction of subsidized housing in a virtually all-white neighborhood. The Second Circuit found that the town’s refusal to rezone plaintiff’s proposed project site resulted in a disproportionate harm to minorities. In reaching its decision, the Second Circuit Court rejected the district court’s reliance on absolute numbers, which showed that 22,160 whites and 3,671 minorities in Huntington had incomes below 200% of the poverty line. Instead, the Court found that the proper focus should be on the statistics showing that 7% of all Huntington families needed subsidized housing, while 24% of the minority families needed such housing. In addition, the Court recognized that minorities constituted a far greater percentage of those currently occupying subsidized rental projects compared to their percentage in the Town’s population. In addition to its finding of disproportionate harm, the Court also found that the refusal to rezone the proposed site had a segregative impact on the entire community. The Court analyzed statistics showing that the zoning ordinance restricted private construction of multi-family housing to an “urban renewal” area that was already 52% minority, as compared to the area in which the plaintiffs sought to construct the proposed project, which was 98% white. Importantly, the Court found that a “significant percentage of the tenants” at the proposed site would belong to minority groups. Therefore, the Court held that Huntington’s refusal to amend the restrictive zoning ordinance to permit privately-built multi-family housing outside the urban renewal area significantly perpetuated segregation in Huntington. [2] New Wave Claims The second category of FHA cases are part of a new wave of challenges aimed at traditional zoning techniques that allegedly exclude protected classes by raising housing costs beyond affordability standards. These cases typically involve a developer or builder seeking to strike down regulations that prevent it from constructing market-level housing.27 None of these claims involving market-level housing were successful. The fundamental flaw in such claims lies in the hypothetical nature of the methodology used to identify disparate impacts, which undermines the causal connection between the construction of the developer’s specific project and the provision of affordable housing opportunities to minority households. [a] Case Profiles [i] City of Midwest City, Oklahoma In 2003, the largest homebuilder in Oklahoma, Ideal Homes, purchased property and developed plans for the construction of new homes in the City of Midwest City, Oklahoma, (“Midwest City”), a suburb located outside of Oklahoma City, Oklahoma. At the time of Ideal Homes’ purchase of the property, Midwest City had in effect a citywide ordinance requiring new residential home construction to meet certain minimum square footage and masonry requirements. In 2004, Ideal Homes requested a variance from these requirements. Following Midwest City’s denial of its request, Ideal Homes brought suit against Midwest City in the District Court of the Western District of Oklahoma, alleging that the ordinance amending the building code was a violation of state law, the Fair Housing Act, the Constitution, and 42 U.S.C. §§ 1981, 1982 and 1983.28 Ideal Homes claims rested primarily on its assertion that the Midwest City ordinances setting forth certain minimum square footage and masonry requirements had a disparate impact on minority households’ ability to purchase a new home. Ideal Homes’ argument was based on general statistics showing that a higher percentage of minority households fell within the low to moderate income range than non-minority households.29 Thus, Ideal Homes reasoned that any increase in the cost of constructing a new home would be more likely to adversely impact a minority household’s ability to purchase a new home. This case was a particularly unusual FHA case in that, unlike the Town of Sunnyvale, Texas, Midwest City has a large minority population and an abundance of affordable housing. In fact, Midwest City has the highest percentage minority population of any municipality in Metropolitan Oklahoma City. During the decade 1990-2000, nearly every census tract in Midwest City experienced significant growth in minority households, with 14 of 25 being above the regional average. In addition, according to the 2000 Census, the median value of owner-occupied housing units in Midwest City ($61,600), is the lowest in the Oklahoma City Metropolitan Statistical Area, as compared to similar sized suburbs of Oklahoma City, including Edmond ($118,000), Norman ($93,700) and Moore ($69,500). Ideal Homes asserted that these statistics were insignificant and that it was not enough for Midwest City to show that there was ample affordable housing available to low and moderate income households. Instead, Ideal Homes argued that Midwest City was required to provide new homes that were affordable to low and moderate income households. During the pendency of the parties’ motions for summary judgment and prior to the Court’s rendering of its ruling on these motions, the parties entered a settlement agreement; thereby, disposing of this case. [ii] City of Kyle, Texas In November 2005, the National Association for the Advancement of Colored People, the Home Builders Association of Greater Austin, and the National Association of Home Builders brought suit against the City of Kyle, Texas (“Kyle”), challenging amendments to Kyle’s zoning and subdivision ordinances which generally increased minimum lot sizes and minimum living area square footage, and included new masonry and garage requirements. The plaintiffs assert that the amendments increase the cost of new homes and thereby foreclose any new construction of “starter homes”. Plaintiffs argue that the revised ordinances have the effect of reducing the affordable housing opportunities for all lower-income citizens who would otherwise relocate to Kyle. As was the case in Midwest City, the plaintiffs’ argument relies on general statistics showing that the median annual income of non-minority households is higher than that of minority households.30 In the months leading up to trial, Kyle filed a motion for summary judgment and a motion for directed verdict on plaintiffs’ FHA claims, both of which were denied. The bench trial in this matter concluded on April 17, 2008 and to date the Court had not rendered its decision. [b] Principal Elements The new wave of FHA claims share many of the same key elements. First, the target is traditional zoning techniques, which are often triggered by stricter standards such as increased minimum house size, lot size, masonry content and landscaping. Second, the allegations focus primarily on the discriminatory impact of a policy or regulation as the primary basis for the claim. Disparate impact in these cases is premised on a disproportionate representation of minorities or families with children within the lower income brackets in the latest federal census. According to plaintiffs’ reasoning, if land use regulations increase the cost of housing significantly, then those in the lower income brackets will be impacted to a greater degree than those in the higher income brackets. Because the lower income brackets contain a higher percentage of minorities or families with children than non-minority households or families without children, plaintiffs argue that a protected class has been excluded by a particular zoning technique or combination of techniques. This evidence typically includes a discussion of the “price points” at which builders producing lower-cost housing can deliver their products with and without the regulations in effect. Using the HUD affordability standard, which provides that no more than 30% percent of a household’s income should go to housing costs, the parties can determine what annual income would be required to afford a home built under the old zoning requirements in comparison with the income required to afford a home built under the new zoning requirements. Under this approach, disparate impact can be quantified as the number of minority households “excluded” by the new regulations, i.e., the number of households who cannot afford a new dwelling unit subject to the new regulations. [i] Hallmark Hallmark provides some indication of how the courts will evaluate the new wave of challenges aimed at traditional zoning techniques. This case involved a market-level housing developer’s challenge to the county’s denial of its request to rezone a development site from “agricultural” to “mixed-use” in order to permit construction of apartments, town homes, single-family residences, and retail/office space.31 Upholding the district court’s finding that the developer failed to demonstrate that the re-zoning decision had a significant disparate impact on minorities, the Eleventh Circuit Court of Appeals recognized the problems inherent in an FHA challenge involving market-level housing.32 First, the group affected by the governmental entity’s denial of plaintiff’s request, is inherently speculative.33 “Whether a person who currently owns a home or rents an apartment within the price ranges proposed by Hallmark for its development would purchase or rent one of Hallmark’s homes is speculative.”34 Further, the developer of market-level housing must demonstrate that “the houses built would actually sell and the apartment and townhomes would actually rent for the prices projected.”35 Plaintiff must also show that there is a lack of other housing within the price ranges plaintiff will actually build.36 “If there is a glut in the market of homes in Hallmark’s projected price range, the lack of the Hallmark’s particular development is not likely to have an impact on anyone, let alone adversely affect one group disproportionately.”37 [ii] Reinhart Reinhart involved a suit by developers against various governmental entities and officials challenging the adoption of a new comprehensive land-use plan and amended land-use regulations.38 The plaintiffs asserted that the combination of costly required development improvements, such as enhanced septic systems and paved roads, and a zoning scheme that limited the locations of higher-density housing, had a disparate impact on members of protected classes, including racial minorities and female-headed, single-parent households. The Tenth Circuit Court of Appeals rejected plaintiffs’ arguments and, citing to the court’s reasoning in Hallmark, held that the developers failed to establish a prima facie case of disparate impact. In particular, the Court noted that the developers’ failed to establish: 1) the amount by which dwelling prices would exceed prices under the old regulations; 2) that the old prices would have qualified as “affordable”39 under the FHA; 3) that regulations reduced the size of the purchaser market for dwellings; and 4) that the reduction of the size of the purchaser market was disproportionately high for a protected group.40 The Court noted that “[i]t is not enough for the [plaintiffs] to show that (1) a regulation would increase housing costs and (2) members of a protected group tend to be less wealthy than others. It is essential to be able to compare who could afford the housing before the new regulations with who could afford it afterward.”41 §1.04. Defending Against New Wave Claims The FHA affords a private cause of action to any “aggrieved person,” which includes any person who “(1) claims to have been injured by a discriminatory housing practice; or (2) believes that such person will be injured by a discriminatory housing practice that is about to occur.”42 The Supreme Court has held that the sole requirement for standing under the FHA is the Article III minima of injury in fact.43 To have standing under Article III of the Constitution, a plaintiff must prove injury-in-fact, causation, and redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). In Lujan, the Supreme Court wrote: Over the years, our cases have established that the irreducible constitutional minimum of standing contains three elements. First, the plaintiff must have suffered an “injury in fact” – an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical,’…. Second, there must be a causal connection between the injury and the conduct complained of – the injury has to be “fairly…trace[able] to the challenged action if the defendant, and not…th[e] result [of] the independent action of some third party not before the court.”….Third, it must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.” Lujan, 504 U.S. at 560-61 (internal citations omitted). Similarly, the Sixth Circuit has held that a plaintiff lacked standing under the FHA when plaintiff failed to identify a particular project that would provide the desired relief.47 In particular, the plaintiff alleged that once the allegedly discriminatory policy of the Farmer’s Home Administration (“FmHA”) was removed, private developers would construct affordable housing necessary to house plaintiff’s family.48 The Court rejected this argument, noting that “plaintiff did not even point to a particular project which the FmHA denied for funding, let alone a project where she would have lived.”49 As has been shown above, new wave plaintiffs have not fared well on the merits in demonstrating a concrete causal relationship between “exclusionary” regulations and the alleged deprivation of fair housing opportunities to classes protected under the FHA. Further, even if a causal chain between the enactment of cost-additive regulations and disproportionate impacts on minority households can be shown in the abstract, a plaintiff must demonstrate additionally under the third element of Article III standing that the remedy of invalidating or prohibiting certain zoning techniques would actually produce market-level units that were affordable to disadvantaged households.50 [2] Statistical Defenses [a] significance level of disparities Typically, statistics are used to demonstrate whether the level of the disparate impact is significant.51 Some courts have required a disparate impact ratio of 1.2 before disparities in racial representation are considered significant (the so-called 80% rule).52 While no single test controls in the measurement of disparate impact, certain guidelines have emerged. For example, it may be inappropriate to rely on “absolute numbers rather than on proportional statistics.”53 In addition, “statistics based on the general population [should] bear a proven relationship to the actual applicant flow.”54 Lastly, “the appropriate inquiry is into the impact on the total group to which a policy or decision applies.”55 In addition, there generally must be expert testimony to explain the meaning or statistical significance of raw data.56 In Anderson v. Douglas & Lomason Co., Inc., the Court rejected plaintiffs’ attempts to establish discriminatory impact based on raw statistical data comparing the percentage of blacks to whites in various job assignments.57 The Court held that such raw statistics did not establish a prima facie case of discrimination and noted that the plaintiffs failed to introduce “any expert testimony explaining the meaning or statistical significance of this evidence.”58 Similarly, in Eubanks v. Pickens-Bond Constr. Co., the plaintiff attempted to demonstrate discrimination based upon statistical evidence setting forth both the percentages of blacks and whites working as cement finishers and the percentages of blacks and whites promoted to foreman.59 The Eubanks court held that “[t]o infer a prima facie case of discrimination from the numbers and percentages, the court needed to go beyond the presentation of the raw data to application of an appropriate and recognized test for determining the statistical significance of any observed disparity.” The court further held that “the record is devoid of any expert analysis on behalf of plaintiff to indicate that discrimination may be inferred from the statistics cited by the district court in its findings.”60 Accordingly, raw percentages and data must be accompanied by expert testimony describing the statistical significance of such evidence. [b] No “Right” to a New Affordable Home New wave claims typically seek to measure discriminatory impact based solely on the effect of a municipality’s actions on new market-level housing. According to these plaintiffs, the FHA protects market-level builders from zoning and development regulations that have the effect of increasing the price of a new, single-family house or apartment unit. Implicit in this theory is that the FHA protects a “right” to have a new home. The plaintiffs asserting this “right” disregard the affordable housing that may already exist in the area. There is no apparent basis for such a market segmentation theory either in the statute itself, or in the case law interpreting it.61 As discussed in Hallmark,62 in the FHA cases in which Plaintiffs have been successful, the focus of judicial inquiry is on the question of whether local land use decisions leave minority households with any affordable housing opportunities. Effects on home ownership, and in particular ownership of newly constructed homes or apartment units, simply is not at issue, because the Act does not guarantee any particular tenure of housing, nor does the Act remedy discrimination on the basis of income levels.63 Accordingly, where the developer in Hallmark failed to analyze the existing opportunities available to low-and-moderate income minority households from the County’s existing housing stock, the Court rejected its theory that disparate impacts could be demonstrated by evaluating solely the effects of denying its own project.64 [3] Causation Analysis: Does Invalidation of the Zoning Technique Result in Housing That Serves Disadvantaged Classes In Reinhart, the Tenth Circuit Court of Appeals held that it was not enough for the plaintiff to show that (1) a regulation would increase housing costs and (2) members of a protected group tend to be less wealthy than others.65 Rather, the Court held, “it is essential to be able to compare who could afford the housing before the new regulations with who could afford it afterwards.”66 The Court noted that it may be that no members of protected groups could afford homes in the proposed development even if the former development regulations stayed in place or that it may be that anyone who could afford a home build under the former regulations could still afford a home built under the new ones.67 “In either of these situations there is no disparate impact on a protected group.”68 [4] Regional Fair Share A potential defense for municipalities to an FHA claim is to show that the municipality is meeting its fair share of regional lower income housing needs. Under a fair share analysis, that obligation should be related to the regional “fair share” of lower income housing opportunities fairly attributable to the municipality based on current population growth and employment trends. An important principle found in most fair share cases is that local governments are not required to zone more land than that needed to accommodate their fair share of anticipated indigenous and regional population and employment growth. To date, however, there have been few cases that have discussed the effect of a fair share program on obligations under the FHA. Some state courts have anchored the doctrine of regional fair share in the constitution of the state. The New Jersey Supreme Court pioneered this approach in dealing with “exclusionary zoning cases. In 1975, the New Jersey Supreme Court in Southern Burlington NAACP v. Township of Mt. Laurel,69 held that exclusionary zoning violates substantive due process guarantees of the state Constitution, stating: It is fundamental and not to be forgotten that the zoning power is a police power of the state and the local authority is acting only as a delegate of that power and is restricted in the same manner as is the state. So, when regulation does have a substantial external impact, the welfare of the state’s citizens beyond the borders of the particular municipality cannot be disregarded and must be recognized and served.70 The regional general welfare doctrine as applied to low and moderate income housing has since been codified by the New Jersey and California legislatures. Other states with comprehensive planning legislation require local governments to take affordable housing into consideration as part of the comprehensive planning process. In some states, municipalities must incorporate a housing element as a mandatory component of their comprehensive plans.71 The degree to which such principles can be employed in the absence of legislation in defense of a FHA claim remains to be seen. Ironically, the cities that have been under attack in the new wave of FHA claims have been those that provide a relative abundance of affordable housing. These cities also happen to be cities in which minorities make up a larger percentage of the population than in surrounding communities. Whatever the reasons for this circumstance, expert testimony may be used to develop measures of relative “access” to affordable housing within a region for classes protected under the FHA. In the Midwest City case, for example, the City was able to demonstrate that it has a considerably higher “access ratio” – the access of minority households to housing relative to white households - than other comparable communities in Oklahoma. [5] Burden Shifting If a plaintiff is able to show a significant disparate impact, the burden then shifts and the municipality may present a defense by showing a non-pretextual governmental reason for its action.72 With respect to the next step in the inquiry, the various circuit courts are split. Some courts, including the Eighth Circuit, have held that the burden then shifts back to plaintiffs to show that a viable alternative means is available to achieve those legitimate policy objectives without discriminatory effects.73 The Second Circuit, on the other hand, has found that it is the defendant’s burden to show that no alternative would serve the governmental interest with less discriminatory effect.74 §1.05. Epilogue: The Hybrid FHA Claim The principal weakness of a new wave FHA claim is the inability of the plaintiff to demonstrate that prohibition of cost-additive zoning techniques will result in affordable new housing for a disadvantaged class member. This contrasts sharply with a traditional FHA claim, in which it is alleged that the exclusion of subsidized housing directly deprives some protected class members of affordable housing. The case of Dews v. Town of Sunnyvale75 illustrates a hybrid approach to attacking municipal land use regulations under the FHA, one that could be used to overcome the deficiencies of the new wave claim. In Sunnyvale, the plaintiffs included a non-profit organization, the Walker Project, individual members of the organization, and a minority developer who sought to rezone land in the Town for some 3000 apartment units which the developer contended would be occupied by section 8 tenants. Suit was brought to invalidate the Town’s “ban” on multi-family units and mandate construction of an apartment complex. After twelve years of litigation, the federal district court ruled that the Town’s ban on apartments placed a disproportionate burden on African-American households based on two findings. “First, apartments are disproportionately used by African-American households in Dallas County as compared to white households.”76 “Second, the ban eliminates much of the housing that can be utilized for subsidized housing programs – including public housing and Section 8 assisted housing – all of which are disproportionately occupied by African-Americans.”77 The court further held that the Town’s one-acre zoning also produced racially discriminatory effects by increasing the cost of housing in the Town. Relying on statistics showing the number and percentage of African-American households with homes valued at $150,000, the court reasoned that “[b]ecause of the higher cost of homes resulting from large lot, low density zoning, it is no surprise that a disproportionate number of African-Americans have been unable to penetrate Sunnyvale’s housing market.”78 With respect to the particular proposed project, the court held that “Sunnyvale’s effective denial of Hammer-Smith’s [developer plaintiff’s] request for rezoning had an adverse impact on African-Americans because the planned development was for section 8 housing and multi-family housing, and these types of housing are disproportionately used by African-Americans.”79 Therefore, “[j]ust as the Town’s ban on apartments and insistence on one acre zoning has an adverse impact on black households, the Town’s refusal to consider Hammer-Smith’s applications likewise had an adverse racial impact.”80 Finally, through a comparison of the Town to its more racially diverse neighboring suburbs, the court held that the Town’s ban of multifamily housing and one-acre zoning requirement perpetuated segregation.81 The judgment entered by the court later was vacated, and a settlement was reached among the parties. The district court’s opinion, however, was not withdrawn. The evidence in Sunnyvale thus included both a statistical analysis to show disproportionate impact, as well as the denial of a specific subsidized housing project which allegedly resulted in depriving disadvantaged households of real-world housing opportunities. Rather than focusing on new, market-level housing, a hybrid claim may center instead on the effects of cost-additive zoning measures, exclusion of housing types, or on the failure of a proposed development to qualify under tax-credit housing programs operated by the state. Such programs incorporate the equivalent of “price points” for rental housing, and thus enable a disappointed plaintiff to show the disproportionate effects on minority households. § 1.06 Conclusion The Fair Housing Act continues to provide a remedy for disadvantaged classes that have been deprived of housing opportunities either intentionally or by effect through implementation of municipal land use regulations. The traditional FHA claim typically sought to remove restrictive regulations affecting or mandate approval of a subsidized housing project that, if approved, was likely to provide affordable housing opportunities. New wave claims go beyond this objective by attacking standard zoning measures that potentially have the effect of raising housing costs beyond affordability for protective classes. The principal weakness underlying such claims is the speculative nature of the connection between removing the zoning measures and producing housing for the disadvantaged class protected by the FHA. This defect may be cured if the housing in question is a tax credit project. Metropolitan Hous. Dev. Corp. v. Village of Arlington Heights, 558 F.2d 1283, 1290 (7th Cir. 1977), cert. denied 434 U.S. 1025 (1978). Mountain Side Mobile Estates P’ship v. Secretary of Hous. & Urban Dev., 56 F.3d 1243, 1251 (10th Cir. 1995) (internal citations omitted) (emphasis added). Mountain Side Mobile Estates P’ship v. Secretary of Hous. & Urban Dev., 56 F.3d 1243, 1252 (10th Cir. 1995). Huntington Branch, 844 F.2d at 936 (citing Resident Advisory Bd. v. Rizzo, 564 F.2d 126, 148-49 (3rd Cir. 1977). Graoch Associates #33, L.P. v. Lousville/Jefferson County Metro Human Relations Commission, 508 F.3d 366, 384 (6th Cir. 2007). Graoch, 508 F.3d at 384 (citing Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 902-03 (8th Cir. 2005)). Graoch, 508 F.3d at 384 (citing Lapid-Laurel, LLC v. Zoning Bd. Of Adjustment, 284 F.3d 442, 467 (3rd Cir. 2002)). Graoch, 508 F.3d at 384 (citing Langlois v. Abington Hous. Auth., 207 F.3d 43, 49-51 (1st Cir. 2000)). Graoch, 508 F.3d at 383-84 (citing Dews v. Town of Sunnyvale, 109 F.Supp.2d 526, 531-32 & 565 (N.D. Tex. 2000)). See, e.g., Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252 (1976) (suit brought by nonprofit real estate developer after village officials refused to rezone tract of land so as to permit developer to build subsidized housing project); Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2nd Cir. 1998); Arthur v. City of Toledo, 782 F.2d 565 (6th Cir. 1986) (Low and moderate-income persons on waiting list for public housing brought FHA action against the city); Smith v. Town of Clarkton, 682 F.2d 1055 (4th Cir. 1982) (Town violated FHA when it withdrew from multi-municipality low-income housing authority, thereby blocking construction of low-income housing units with federal funds); Malone v. City of Fenton, 592 F.Supp. 1135 (E.D. Mo. 1984) (developers of proposed subsidized housing project brought suit after city refused to rezone the property for multi-family housing); Atkins v. Robinson, 545 F.Supp. 852 (E.D. Virginia 1982) (Low-income residents alleged that county’s veto of proposed low-income housing development and refusal to participate in federal section 8 housing program violated FHA); U.S. v. City of Birmingham, 538 F.Supp. 819 (E.D. Michigan 1982) (Dept. of Justice brought suit alleging city prevented the development of a specific subsidized housing project); U.S. v. City of Parma, 494 F.Supp. 1049 (N.D. Ohio 1980) (City with 99.5% white population that opposed all forms of public and low-income housing, denied building permit for federally-subsidized low-income housing development, and refused to submit and adequate housing assistance plan in connection with its application for Community Development Block Grant funds). See, e.g., Huntington Branch, 844 F.2d 926 (2nd Cir. 1998); Metropolitan Hous. Dev. Corp., 429 US. 252 (1976); Malone, 592 F.Supp. 1135 (E.D. Mo. 1984). See Hallmark Developers, Inc. v. Fulton County, Georgia, 466 F.3d 1276 (11th Cir. (Ga.) 2006) (developer’s challenge to county’s denial of their request to rezone development site from “agricultural” to “mixed-use” in order to permit construction of apartments, town homes, single-family residences, and retail/office space); see also, Jim Sowell Constr. Co., Inc. v. City of Coppell, 61 F.Supp.2d 542 (N.D. Tex. 1999) (developer’s challenge to city’s zoning regulations that limited multifamily units to two stories and required 60-foot setbacks); see also, Eastampton Center, LLC v. Township of Eastampton, 155 F.Supp.2d 102 (D. N.J. 2001) (developer’s challenge to ordinances which rezoned plaintiff’s property). Ideal Homes of Norman LP, Vero Investments LLC and Terra Verde Development, LLC, Plaintiffs vs. City of Midwest City, Oklahoma, Defendant, Case No. CIV-05-01526-F, in the United States District Court for the Western District of Oklahoma. Ideal Homes applied this logic with respect to its claims related to households with children versus households without children, in that the statistics indicated that a higher percentage of families with children fell within the low and moderate income range than those without children. Interestingly, Kyle, has a Hispanic population of fifty-two percent (52%) and an African American population of over eight percent (8%), which is a greater percentage of both the Hispanic and African American population than the county and metropolitan statistical area in which it rests. Under the regulations of the United States Department of Housing and Urban Development (HUD), housing is “affordable” only if it is acquired by a family whose annual income does not exceed 80% of the median income for the area. Reinhart, 482 F.3d at 1227. See Hallmark Developers, Inc. v. Fulton County, Georgia, 466 F.3d 1276 (2006), in which the Eleventh Circuit by-passed the standing question and ruled against the plaintiff on the merits. See e.g., Smith v. Xerox Corp., 197 F.3d 2458, 365 (2d Cir. 1999), citing 29 C.F.R. sec. 1607.D (Title VII case). Anderson v. Douglas & Lomason Co., Inc., 26 F.3d 1277 (5th Cir. 1994); Eubanks v. Pickens-Bond Constr. Co., 635 F.2d 1341 (8th Cir. 1980). Eastampton Center, LLC v. Township of Eastampton, 155 F.Supp.2d 102 (D. N.J. 2001) (“As a general matter, the Fair Housing Act does not impose any affirmative duty upon a municipality to plan for, promote, or construct any type of housing.”) (citing Acevedo v. Nassau County, 500 F.2d 1078, 1082 (2nd Cir. 1974); Jaimes v. Toledo Metro. Hous. Auth., 758 F.2d 1086, 1096 (6th Cir. 1985) (quoting Lindsey v. Normet, 405 U.S. 56, 74 (1972) (“[t]here is no constitutional right of ‘access to dwellings of a particular quality,’ nor is the ‘assurance of adequate housing’ a constitutional mandate.”). See Jaimes, 758 F.2d at 1096; see also, Hallmark, 466 F.3d at 1285 (Court found that defendant’s statements demonstrated class animus, not a racial animus, and wealth is not a proxy for race). Mt. Laurel, 336 A.2d at 726. The doctrine has been adopted judicially to one degree or another in California, Pennsylvania, New York and New Hampshire. Cal. Gov’t Code §§ 65300, 65302(c), 65580-65589.8 (West 1983 & Supp. 1991); Florida Stat. § 163.3177(6)(f); Georgia Code Ann. § 50-8-7.1(b)(1). |
Print this page
Bookmark this page
Email this page
Insurance Litigation: Perhaps you were in a motor vehicle accident in which someone sustained injuries or a tenant was injured when she fell in a stairwell of your apartment building.
The New Vested Rights Laws: The Texas Municipal League recently declared itself the winner of the 2005 Legislature in its final update of the session...
Case Updates: These case updates are submitted periodically. Please select the case of interest to you.