Supreme Court Hears Texas LIHTC Housing Discrimination Case

The U.S. Supreme Court recently heard oral arguments for a major civil rights case that could narrow the scope of discrimination claims made under the landmark Fair Housing Act (FHA). The court is considering whether the 1968 law allows racial and other bias claims based on seemingly neutral practices that may have a discriminatory effect. These are known as “disparate impact” claims. There is no dispute over the law’s prohibition on openly discriminatory acts.

The case began in 2008 when the Inclusive Communities Project, a nonprofit organization that seeks to promote racial integration in Dallas, sued a state agency charged with allocating tax credits to developers who build low-income housing projects. ICP accused the Texas agency of disproportionately allocating the tax credits to properties in minority populated areas. The courts below ruled in favor of the ICP. Now Texas is appealing the matter to the Supreme Court.

Texas officials argued that the FHA precludes claims of disparate impact. “There is no language anywhere in the Fair Housing Act’s anti-discrimination rules that refers to ‘effect’ or actions that ‘adversely affect’ others,” state lawyers wrote in court briefs. They argue that the FHA only forbids actions that “discriminate because of race,” and not actions that “discriminate because of any factor that happens to be correlated with race.”

Based on the one-hour oral argument, it’s not clear if there is a majority on the nine-justice court that will cut back on what kind of conduct can lead to housing discrimination litigation. The court’s liberal justices were outspoken in defending the existing interpretation of the law, which has been backed by lower courts but has never been endorsed by the high court.

On the conservative wing of the bench, Chief Justice John Roberts and Justice Samuel Alito both seemed inclined to narrow the scope of the law. But Justice Antonin Scalia, another conservative, made some remarks supportive of the argument made by President Barack Obama’s administration and civil rights groups in defense of the law. Scalia noted that although the 1968 law did not specifically refer to disparate impact claims, the U.S. Congress appeared to acknowledge the existence of such claims when it amended the law in 1988.

A ruling is due by the end of June.