APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
Disparate Impact on Course to Supreme Court Again
F
or the third time since 2012, the U.S. Supreme Court has been petitioned to hear
a case that may decide the fate of disparate
impact liability under the Fair Housing
Act (FHA). The issue has created much uncertainty in the apartment and real estate industry
since HUD released its final disparate impact rule
in March 2013. Two previous cases were accepted
by the Court but the parties settled prior to review,
leaving the issue unresolved.
In the latest case, Inclusive Communities Project v. Texas Department of Housing, the allocation
of tax credits is being challenged as an allegedly
discriminatory practice under the FHA based on
its disparate impact on minority residents. Specifically, the Inclusive Communities Project (ICP)
argued that the Texas Department of Housing and
Community Affairs (Texas) disproportionately
approved tax credits in minority neighborhoods
while disproportionately rejecting them in majority white neighborhoods, thus violating the FHA
and reinforcing patterns of segregation.
In March, the Fifth Circuit Court of Appeals
determined HUD’s rule was the correct legal stan-
38 | TRENDS • AUGUST 2014
dard for considering whether the Texas tax credit
allocations disparately impacted minorities, and
directed the lower court to reconsider the merits
of the case applying HUD’s analytical standard.
The lower court’s review is on hold, however, following a June 23 order by the appeals court to await
the Supreme Court’s decision on the Texas petition
for cert.
Uncertainty over apartment business practices
such as criminal background screening, and Section
8 voucher program participation and policies, are
potential areas of liability under the HUD disparate
impact analysis. Although disparate impact claims
are available under other anti-discrimination statutes, Congress did not provide for such claims in
the FHA.
Both the Texas Apartment Association and the
National Multifamily Housing Council have filed
amicus (“friend-of-the-court”) briefs asking the
Court to grant the petition for certiorari to address
the issue. Should the Court grant certiorari, the
National Apartment Association and other industry organizations will file a joint amicus brief on
the merits of the case.
SOURCE OF INCOME BILL
DEFEATED IN INDIANAPOLIS
On July 8, the Indianapolis City-County Council considered a proposal that would have given
“source of income” protected class status under the
city’s fair housing law. The Indiana Apartment
Association opposed the bill and was successful in
defeating it in committee.
www.aamdhq.org