Texas Asks Supreme Court for Decision in Housing Bias Dispute

The Texas Department of Housing and Community Affairs (DHCA) is asking the Supreme Court to rule that disparate impact claims are not a part of the Fair Housing Act. If the Court grants the writ of certiorari the Texas agency wants, it would be the third Fair Housing Act disparate impact case before the Court since 2012.

The case, Inclusive Communities Project, Inc. v. Texas Department of Housing and Community Affairs, raises the question of whether simple disparate outcomes that aren’t the result of intentional discrimination should be treated as such. The Texas agency argues that the statutory language of the Fair Housing Act does not expressly provide for disparate impact, as do Title VII and the ADEA.

Inclusive Communities Project Inc., the plaintiff that promotes low-income families eligible for Section 8 vouchers, argued at the trial court that the Texas DHCA disproportionately approved tax credits for non-elderly affordable housing developments in predominantly minority neighborhoods. It disproportionately denied tax credits for the similar affordable housing developments in predominantly white neighborhoods, the plaintiff argued.

On March 24, 2014, the Fifth Circuit issued an opinion in the suit applying HUD’s discriminatory effects rule and burden-shifting analysis to a Fair Housing Act claim. This is the first circuit court to apply the rule since it took effect on March 18, 2013. The Fifth Circuit adopted the burden-shifting approach found in HUD’s newly adopted disparate impact rule.

The district court determined that a disparate impact on minorities had in fact existed based on the plaintiff's statistics. The court also concluded that the Texas DHCA had a legitimate interest in its review process but failed to produce any evidence that there were no less-discriminatory alternatives.