Apartment Trends Magazine September 2015 | Page 40
APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
Supreme Court Upholds Disparate Impact
Liability, With Note of Caution
T
he U.S. Supreme Court decided to uphold
disparate impact liability under the Fair
Housing Act, a legal theory that prohibits
neutrally-applied practices with a disproportionate impact on minority groups protected
by the law, even without proving an intent to discriminate. The 5-4 decision in Texas Department
of Housing and Community Affairs v. The Inclusive Communities Project, Inc. also emphasized
limitations on the policy, stating that neutrallyapplied practices should not fail on disparate impact
grounds unless they are “artificial, arbitrary and
unnecessary.”
NAA/NMHC are conducting a detailed analysis of the Supreme Court’s decision and will continue to seek further clarification on disparate
impact liability.
NAA/NMHC and six other real estate trade
associations weighed-in on the issue by jointly
submitting an amicus brief to the Supreme Court
in November. We argued that disparate impact
38 | TRENDS • SEPTEMBER 2015
liability could trigger discrimination claims for
conducting resident criminal history and credit
screenings, among other business practices, despite
no intention of singling out a particular group
protected by the Fair Housing Act.
The multifamily industry supports the Fair
Housing Act and is committed to providing quality rental housing without regard to race, religion,
color, sex, handicap, familial status or national
origin. In addition, we support enforcement against
bad actors who intentionally discriminate and
damage the industry’s reputation.
Importantly, the majority opinion highlighted
limitations on disparate impact liability to allow
“practical business choices and profit-related decisions that sustain the free-enterprise system.” Leeway must be given to housing providers to explain
the validity of their policies. Further, a disparate
impact claim is not demonstrated by statistical
disparity alone. A claim must show that a challenged practice actually caused a disparate impact
on a protected group, and the availability of an
“alternative practice that has less disparate impact”
to serve legitimate business needs.
The case originated when the Inclusive Communities Project, a Dallas-based group that advocates for integrated housing, sued the Texas Department of Housing. The suit alleged that Texas
disproportionately approved tax credits in minority neighborhoods, therefore reinforcing housing
segregation and violating the Fair Housing Act.
CONGRESS DRIVES SHORT-TERM
HIGHWAY BILL, PUMPS BREAKS ON
TAX EXTENDERS
Lawmakers have cleared a three-month extension, through