The Fair Housing Act (FHA) prohibits lenders, brokers, landlords or any other person from discriminating against a person seeking to rent, purchase or secure financing on a home. The FHA specifically prohibits discrimination on the basis of race, color, national origin, religion, sex, familial status and disability.1 Recently, the Supreme Court decided whether the FHA imposes liability for disparate impact against people in protected classes.
Disparate treatment of a protected class is clearly prohibited under the FHA. Disparate treatment is when a person is treated differently than another who is similarly situated based on a protected characteristic. Disparate-impact liability, on the other hand, "punishes practices that are not intended to discriminate but in fact have a disproportionately adverse effect on [a protected class]."2
On June 25, 2015, the Supreme Court issued its 5-4 opinion in Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 192 L.Ed.2d 514 (U.S. 2015), written by Justice Kennedy and joined by Justices Ginsburg, Breyer, Sotomayor and Kagan. Under federal law, the government provides low-income tax credits to developers of affordable housing and sets forth various criteria such developers must meet.3 In Texas, the Texas Department of Housing and Community Affairs (Department) distributes these tax credits. The Inclusive Communities Project (ICP) is a non-profit organization that helps low-income families obtain affordable housing. The ICP brought this case against the Department, claiming that the Department’s distribution of the tax credits was disproportionately allocated by granting too many credits in predominately black inner-city neighborhoods and significantly less in predominately white suburban communities. The issue before the Supreme Court was whether the Department could be held liable for this disparate impact, absent the Department’s intention to discriminate against any protected class.
To determine Congress’s intent regarding disparate-impact liability under the FHA, the Supreme Court compared the FHA to other antidiscrimination statutes, specifically Title VII of the Civil Rights Act (Title VII) and the Age Discrimination in Employment Act of 1967 (ADEA). Well-established case law shows that disparate-impact liability is cognizable under both Title VII and the ADEA. The Court compared the language of those two statutes to that of the FHA and found similar provisions regarding...
