Not Obamacare or gay marriage; The race and discrimination case. (TX Housing v. ICP)

While you were celebrating your free healthcare at gay wedding receptions, you likely missed a decision in a critical case about discrimination, housing, and a legal matter called disparate impact. The decision in this case (Texas Department of Housing and Community Affairs v. Inclusive Communities Project) came down Thursday and was off the radar because the Obamacare decision came down the same day. Roberts delivered the Obamacare decision, which upheld the national insurance program and was joined by five other justices. Yes, this much-hyped case – the biggest of the term, in the eyes of some – did not turn out to be a 5-4 decision. The Texas case, however, was the 5-4 case of the day in which Kennedy cast a decisive vote and authored the opinion for the four other liberal justices.

I wrote about this case shortly after the oral arguments were given back in January. It explores The Fair Housing Act, passed in April of 1968, which was signed into law immediately after Dr. Martin Luther King, Jr. was assassinated. The intent of the law was to eradicate discriminatory housing practices that resulted in segregated neighborhoods. Such obstacles to had long kept minorities from opportunities because of their “race, color, religion, or national origin.”

A group called the Inclusive Communities Project (ICP) challenged Texas’ Department of Housing for giving too many tax credits to housing in predominantly black neighborhoods. While awarding tax credits seems inherently good and in the spirit of the Act, if they’re repeatedly awarded to housing developers in predominantly black, low-income neighborhoods then they keep black neighborhoods black and white neighborhoods white. In short, when the money (tax credits) stays in the same place, it does nothing to integrate neighborhoods, especially those segregated over decades. None of the tax credits were being sent to housing developers in white neighborhoods. In fact, “92% of low income housing tax credit projects were put into communities of color.” Consider the long-term effects a lack of housing mobility has on a family. It doesn’t simply limit the number of choices of neighborhoods they have to pick from; it also impacts what schools their children attend, the quality of their education, health (more food “deserts” and less quality grocery options), access to transportation, job opportunities, safety, and life expectancy.

The housing credits are provided by the federal government, which is how they got involved in this case, but the states hold the power to distribute the credits to the developers. The state of Texas argued they distributed the tax credits in the way they saw necessary, one that was race-neutral and lacked any intent to discriminate.

The ICP argued that, although the intent wasn’t to discriminate, the end results perpetuated segregated neighborhoods. This is what is referred to in the case as “disparate impact,” which is when a policy is written in a neutral way but has an effect that discriminates against a class of people. In an interview, Lisa Rice, Vice President of the National Fair Housing Alliance, likened it to insurance companies who refuse to insure a home valued below $65,000. On its face, that’s not an obviously discriminatory rule, but the effect excludes more Latino and Black families, who are more likely to own a home of that value, than whites. The ICP had data that made a compelling argument about the effects tax credits had on housing options for people of color and filed a disparate impact claim against Texas. This data was key for, as Rice said, courts don’t like to be called out as being “racist,” so you better be able to prove discrimination was the end result.

The question the Supreme Court had to answer was whether or not a group like the ICP can make such a claim when the purpose of the Fair Housing Act was always to prevent discrimination in housing. The ICP argued the spirit of the FHA does, but today’s second-generation discrimination isn’t obvious like it was in 1968 and 1988. The more common forms of discrimination are cancelled appointments, no-shows to apartment showings, convoluted application forms, or requirements of very high credit scores. These are common race-neutral practices in which the intentions are not overtly discriminatory but the outcomes consistently result in white tenants.

In order to prove such practices, groups like the ICP need to be able to file disparate impact claims in courts. Texas argued that if Congress intended to allow disparate impact cases they would’ve articulated exactly those words in the 1988 reauthorization of the FHA. To allow such cases would open the floodgates to anyone who wanted to challenge any seemingly insidious discriminatory business practices of landlords and homeowners in courts.

Justice Kennedy agreed with the ICP. In his opinion, “Recognition of disparate-impact claims is consistent with the FHA’s central purpose…These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability.”

In his dissent, Justice Alito said this decision will burden the states by allowing a deluge of disparate impact claims to flood the courts. “At last I come to the ‘purpose’ driving the Court’s analysis: The desire to eliminate the ‘vestiges’ of ‘residential segregation by race.’ We agree that all Americans should be able ‘to buy decent houses without discrimination . . . because of the color of their skin.’ But this Court has no license to expand the scope of the FHA to beyond what Congress enacted.”

The majority’s decision sets a precedent that allows groups to challenge what lies at the heart of insidious racism and discrimination today – the ability to legally challenge policies and actors in the “Oops! I swear, I didn’t intend to be racist!” camp. Although inundated with horrifying stories and images on television from Ferguson, New York, Baltimore, Charleston, and Cleveland (to name but a few), overt racism is far less common than subtle, passive-aggressive forms made by well-intended policy-makers and state agents. Casual acceptance of seemingly neutral laws written with the intent to help the very people the laws are disadvantaging is the modus operandi of the minority in this decision. It’s also the default setting among those who look at the stories that come out of those cities and reconcile such tragedies as the consequences of “choosing” to live in violent neighborhoods. No one chooses to live in places where violence is pervasive. If you think that’s why violence in low-income and minority neighborhoods is so common, ask yourself why it is those families haven’t left by now and then read the data and stories represented by groups like the Inclusive Communities Project.

“Most of the evil in this world is done by people with good intentions.” – T.S. Eliot

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