Why The Disparate Impact Ruling Was Important
Pop quiz hot shot. The owner of an apartment building decides that she doesn’t want to rent to people who have been convicted of drug charges. She applies that policy to everyone regardless of race or ethnicity. Is she liable for racial discrimination under the Fair Housing Act if it turns out that the policy disproportionately effects a certain racial or ethnic group in her neighborhood?
A disparate impact claim does not require a discriminatory motive to be alleged, proved, or present. If the results of a policy or procedure has a disproportionate impact on the basis race, color, or national origin religion, sex, or familial status, then that’s enough, even if the policy is nondiscriminatory by its terms, intent, or application. The defendant can only prevail by showing some degree of necessity for the policy.
Texas Department of Housing v. The Inclusive Communities Project (ICP)
The anti-segregation group sued the Texas housing authority claiming that federal tax credits to developers who build low-income housing projects were disproportionately allocating too many of the tax credits to properties in minority areas and too few in suburban areas. The housing authority responded that the purpose of federal tax credits is to help underprivileged residents of rundown areas in an effort to improve their blighted status. Such credits have a far less positive effect in more well-off neighborhoods.
In an opinion authored by Justice Anthony Kennedy, the Court ruled against Texas on a 5 to 4 vote. It invoked a previous 1971 Supreme Court case (Griggs v. Duke Power Co.), which had ruled that disparate impact claims were valid when they referred to “the consequences of actions and not just the mindset of actors.”
But the disparate impact decision is much more important than both Obamacare and same sex marriage for it will impact every housing decision for decades. Healthcare and marriage don’t mean as much if you have them with no place to live.
Had the Court come out the other way on Burwell, Congress would have legislatively responded as no one of either party would want to deprive anyone of their health insurance subsidies and acquainted them with the true cost of Obamacare with an election coming up. Obergefell was never really in doubt as this was a classic case of politics being downstream of culture. It took many of us years to recognize both the legitimacy and reality of same sex couples. Once that was recognized in our collective reality and culture, the legal question of whether the state can ban issuing marriage licenses to these couples seems absurd.
With ICP, requirements for down payments, employment, credit history, references, criminal records, etc. having a “disparate impact” on minorities now must be considered in all housing decisions across the land. Any requirement, even where it is completely neutral and applied without discriminatory intent, excluding people from housing that is higher than their representation in the area, will be litigated endlessly from this point which can only result in more fair and equitable housing for all people.
Statutory Interpretation v. Constitutional Decision
Obergefell was a constitutional decision holding that the recognition and provision of same-sex marriage is a fundamental right guaranteed by the Fourteenth Amendment to the United States Constitution. ICP and Burwell were statutory decisions, meaning that Congress can “fix” it by clarifying the law. In this case, the fix would look something like, “disparate impact suits are not cognizable under the statute.”