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Supreme Court Issues Ruling on Disparate Impact as it Relates to the Fair Housing Act

30 June 2015
 June 30, 2015
Category Latest

The U.S. Supreme Court issued a decision in the case Inclusive Community Properties Inc. vs. Texas Department of Community Affairs.  The 5-4 decision allows complaints to be brought under the Fair Housing Act based on “disparate impact,” when a policy that appears to be neutral, or no intent to discriminate, has an adverse effect or impact on a protected class. Justice Anthony Kennedy wrote the opinion, and was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan.

An important note is that while today’s opinion firmly upholds the concept of “disparate impact,” it seems to place new limits on how claims can be brought. The opinion is clear that disparate impact claims cannot be based solely on statistical disparities. A plaintiff will have to demonstrate that a defendant’s policy or practice actually caused a disparity. Under this reasoning, housing authorities and developers would not be held liable under a disparate impact challenge if they could show that a policy or practice was necessary to achieve a valid goal.

HUD Secretary Julián Castro issued the following statement in response to the Court’s ruling: “Today is another important step in the long march toward fulfilling one of our nation’s founding ideals: equal opportunity for all Americans. The Supreme Court has made it clear that HUD can continue to use this critical tool to eliminate the unfair barriers that have deferred and derailed too many dreams. Working with our partners on the ground, we will continue to do all we can to build a housing market that treats all Americans with basic dignity and respect.”

NAHMA will continue to analyze the impact of the Supreme Court’s opinion on affordable housing programs.

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