In 2008, a nonprofit organization in Dallas uncovered a disturbing pattern: Tax credits for affordable housing units were being approved only in black and Latino neighborhoods. Applications in white neighborhoods were routinely denied.
The nonprofit organization, called the Inclusive Communities Project, sued on the grounds that blacks and Latinos were being segregated in the worst parts of the city.
But the Texas Department of Housing & Community Affairs argued that it merely put up low-income housing in places where neighbors wouldn’t complain. It fought the case all the way up to the Supreme Court. Of the cases due for a decision this month, it’s one of the most consequential.
The fact that the Supreme Court took up the case at all is a worrisome sign that conservative justices are eager to strike down a long-held interpretation of the Fair Housing Act of 1968, which has served as a powerful tool to fight housing discrimination.
At issue is the notion that the act doesn’t just forbid intentional discrimination but also seemingly race-neutral zoning and loan policies that produce the same effect.
For four decades, this interpretation of the law — known in legal circles as “disparate impact” — has been used to punish banks for steering toxic loans to blacks and Latinos, and mortgage companies for charging higher fees. In 2011, the Justice Department relied on it to negotiate a $335 million settlement with Countywide Financial for charging higher rates to black and Latino borrowers who had the same credit risk as whites.
This interpretation means that victims of discrimination don’t have to prove the mindset of city officials and loan officers. They just have to show the data that a protected class is being unfairly affected. This idea has been upheld by repeatedly in federal court, and enforced by both by Democrats and Republicans alike. Even Congress acknowledged “disparate impact” as the standard when it amended the Fair Housing Act in 1988.
“It’s been around for 40 years,” said John Paul Schnapper-Casteras, special counsel at the NAACP legal defense fund, who filed an amicus brief in support of the Inclusive Communities Project. By taking this case, conservative justices appear to be channeling the mood of those Americans who want to see an end to laws that pay special attention to race, on the theory that America has moved past the need for them.
Unfortunately, racial discrimination in housing — both overt and subtle — is alive and well. If Supreme Court justices doubt that, they should take a look at the recent altercation at a pool party in McKinney, a Dallas suburb. When black teenagers held a party at a shared pool, white neighbors insulted them and called the police, who handcuffed kids and even drew a gun.
It’s noteworthy that McKinney was the other city that the Inclusive Communities Project sued in 2008, after officials there refused to allow the construction of low-income housing units in the west side of town, which is 86 percent white. All of the city’s low-income units were clustered on the east side of town, where most black and Latino residents live. In 2010, the city settled the lawsuit and agreed to build an affordable housing complex in west McKinney. Hundreds of white residents spoke out against it at community meetings.
Fast forward to the recent pool party, which was held on the west side of town. The altercation reportedly began when a white resident told a black teen to go back to her “Section 8 housing.” If the Supreme Court rules against the Inclusive Communities Project, that kind of overt racism will easily morph into zoning laws quietly aimed at keeping unwanted races out.