Homelessness disproportionately affects African-Americans, Native Americans, Native Hawaiians or Other Pacific Islanders, Latinos, families with children, and persons with disabilities and homelessness also affects large numbers of females and survivors of domestic violence and persons who identify as transgender.
Of the 564,708 homeless persons who wee without shelter or stayed in an emergency shelter or transitional housing on a given night in 2015 compared to the total population in the 2015 American Community Survey, 40% of the homeless population were African-American compared to only 13% of Americans overall, 3% were American Indian or Alaska Native compared to less than 1% of Americans overall, 2% were Native Hawaiian or Other Pacific Islander compared to 0.2% of Americans overall, and 6% identified Multiple Races compared to only 3% of Americans overall and 20% were of Hispanic/Latino ethnicity compared to 18% of Americans overall. In addition, 37% of the homeless population were in families with children under 18 compared to only 31% of Americans overall and 14% were chronically homeless individuals and 17% were chronically homeless individuals or persons in families with the head of household with a disability and homeless for at least a year or at least four times in the past three years compared to only 13% of Americans overall with a disability and 15% of American adults with a disability.
Homelessness also has a large and disproportionate effect based on gender. Twelve percent of the homeless persons were domestic violence survivors based on the reporting Continuum of Cares (with likely a higher percentage if all CoCs reported survivors of domestic violence) and 0.23% identified as transgender (wither a higher percentage possible based on another survey for which the possibility of underreporting was noted).
To prevent and end homelessness for all Americans, including those who experience these disparities, not only should efforts address the lack of affordable housing, unemployment, income levels, poverty and deep poverty, access to child care and transportation, and other factors that cause or contribute to homelessness, the impact of fair housing laws and housing policies and practices that have discriminatory impacts on protected classes of people should also be addressed so that housing is available and people do not become homeless on account of these policies and practices.
The Fair Housing Act, enacted in 1968 and amended in 1988, states that it is unlawful to refuse to sell or rent or to otherwise make unavailable or deny a dwelling to any person because of race, color, religion, sex, familial status, or national origin.
The Fair Housing Act prohibits both intentional discrimination and discrimination that has a discriminatory effect/disparate impact. On February 15, 2013, the U.S. Department of Housing and Urban Development finalized a rule that prohibits such discrimination if it has a discriminatory effect and not just if there was discriminatory treatment/intentional discrimination. HUD, Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 78 Fed. Reg. 11,460 (Feb. 15, 2013). The rule establishes a burden-shifting analysis to determine whether liability may be imposed based on a discriminatory effect. First, the charging party or plaintiff has the burden to prove that a challenged policy or practice caused or predictably will cause a discriminatory effect. 24 C.F.R. § 100.500(c)(1). Then, the respondent or defendant has the burden of proving that the challenged policy or practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests. 24 C.F.R. § 100.500(c)(2). If the respondent or defendant satisfies this burden, the charging party or plaintiff may prevail by proving that the substantial, legitimate, nondiscriminatory interests could be served by another policy or practice that has a less discriminatory effect. 24 C.F.R. § 100.500(c)(3).
On June 25, 2015, the U.S. Supreme Court concluded that the Fair Housing Act, as amended, does provide both discriminatory treatment and discriminatory impact claims. Tex. Dep’t. of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 576 U.S. ___, 135 S. Ct. 2507 (2015). The Supreme Court identified that its two prior antidiscrimination cases construing Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 (ADEA) instructed that antidiscrimination laws must be construed to encompass disparate impact claims when the text refers to the consequences of actions and not just to the mindset of actors and where that interpretation is consistent with statutory purpose. Id. at 2518. In applying this test to the Fair Housing Act, the Court assessed the text of the Fair Housing Act and decided that Congress’s use of the phrase “otherwise make unavailable” refers to the consequences of an action rather htan the actor’s intent and use of the words “because of” did not foreclose disparate impact liability because both Title VII and the ADEA contain those words, Congress did not change this language when it amended the Fair Housing Act in 1988 after nine of the U.S. Courts of Appeals approved disparate impact liability, and the recognition of disparate impact claims is consistent with the Fair Housing Act’s central purpose to eliminate discriminatory practices. Id. at 2518-21, 2525.
The Supreme Court also set the burden-shifting framework as the test to prove a discriminatory impact claim. The Court discussed the three steps of the HUD Discriminatory Effects test. The Court stated that disparate impact liability mandates the removal of artificial, arbitrary, and unnecessary barriers. Id. at 2522. The Court also stated that an important and appropriate means of ensuring that disparate impact liability is limited is to give defendants leeway to state and explain the valid interests served by their policies. Id. The Court stated that it would be paradoxical to construe the Fair Housing Act to impose onerous costs on actors who encourage revitalizing dilapidated housing in cities merely because some other priority might seem preferable, entrepreneurs must be given latitude to consider market factors, and zoning officials must often make decisions based on objective factors such as cost and traffic patterns and subjective factors such as preserving historic architecture. Id. at 2523.
The Court provided more information on the requirements of a disparate impact claim that relies on a statistical disparity. Id. The Court stated that the claim must fail if the plaintiff cannot point to a defendant’s policy or policies that cause the disparity. Id. The Court stated that a plaintiff who fails to allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection cannot make out a prima facie case of disparate impact. Id. The Court also noted that it may be difficult to establish causation because of the multiple factors that go into investment decisions about where to construct or renovate housing units. Id. The Court also noted that if the plaintiff cannot show a causal connection between the defendant’s policy and a disparate impact because federal law substantially limits the defendant’s discretion, the court should dismiss the case. Id.
On remand, the U.S. District Court for the Northern District of Texas re-evaluated the disparate impact claim in light of the U.S. Supreme Court’s decision. The district court found that the plaintiff had not proven a prima facie case in step 1 of the burden-shifting analysis and dismissed the disparate impact claim. Inclusive Cmtys. Project, Inc. v. Tex. Dep’t of Hous. & Cmty. Affairs, civ. action no. 3:08-cv-00546-D (N.D. Tex. Aug. 26, 2016). The plaintiff alleged that the Texas Department of Housing and Community Affairs, a state agency, allocation of Low Income Housing Tax Credits in the Dallas metropolitan area has a disparate impact on the location of low-income housing in the area. Id. at 7. The plaintiff alleged that the exercise of the state agency’s discretion in allocating 9% tax credits has caused the exclusion of all but 6% of the LIHTC units from Caucasian areas in the City of Dallas and all but 265 of the LIHTC units from Caucasian areas in the Dallas metropolitan area. Id. at 12. The district court dismissed the disparate impact claim for four reasons.
First, the district court held that the state agency’s exercise of discretion in deciding how to allocate the 9% tax credits is not a specific, facially neutral policy sufficient to establish a prima facie case of disparate impact liability because it is a lack of policy instead of a policy and because it is not specific policy as opposed to a generalized policy of discretion and the plaintiff has not established that the denial of only two applications over a 17-year period is a “policy” that can cause a disparate impact. Id. at 12-16, 25-26; see id. at 29-30, 31.
Second, the district court held that the claim is actually a claim of disparate treatment instead of disparate impact because the plaintiff discussed the use or application of the policy/discretion instead of the existence of the subjective policy itself and that the plaintiff did not seek to enjoin the discretion and to mandate a point-only system or another wholly objective method of awarding tax credits. Id. at 16-17.
Third, the district court held that the plaintiff did not establish causation – that the exercise of the discretion caused the disparity in the location of low-income housing – because the use of discretion itself should raise no inference of discriminatory conduct, the plaintiff did not demonstrate that had the state agency not been permitted to exercise any discretion when allocating 9% tax credits and had the decisions been made strictly by the points system there would be no, or significantly less, disparity in the location of the LIHTC units, and the plaintiff did not account for other potential causes of the statistical disparity such as the actions, policies, or preferences of third parties, such as Congress, the state legislature, developers, and local communities. Id. at 18-23, 25-28, 30-31.
Fourth, the district court held that the plaintiff did not seek a constitutionally-sound remedy, i.e., the elimination of an offending practice, because the plaintiff did not seek to remove a specific barrier to fair housing, but to impose a requirement that it award additional points for housing that furthers desegregation. Id. at 26-27.
Based on the statute, regulation, and these cases, plaintiffs bringing disparate impact claims should thoroughly prepare for the litigation. First, they should identify as many occurrences of the discriminatory effect as possible[1], identify a specific, facially neutral policy or practice[2] of the defendant(s) that led to the discriminatory effect, and identify all of the parties that were able to influence the discriminatory policy or practice. Plaintiffs should bring the claims against all parties or their officers that were able to influence the discriminatory policy or practice, keeping in mind sovereign immunity case law and they should seek an injunction of the policy or practice and imposition of another objective method that may consider the characteristic in question as one of several factors.[3] In making its prima facie case of disparate impact, plaintiffs should allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection between a specific, facially neutral policy or practice of the defendant(s) and the disparate impact, provide evidence, such as statistical differences, of how the result would be different if a non-discriminatory policy or practice was used instead, and account for other potential causes of the statistical disparity. Plaintiffs should also think about and evaluate the potential substantial, legitimate, nondiscriminatory interests that may be served by the policy or practice to be challenged and other policies or practices that have a less discriminatory effect that would serve those interests for the subsequent phases of the burden-shifting analysis.
[1] A case would likely be stronger with more evidence of the discriminatory effect. Although the U.S. Supreme Court noted that a one-time decision may not be a policy at all, it did not include any other minimum number required to support a disparate impact claim, Tex. Dep’t of Hous. & Cmty. Affairs, 576 U.S. __, 135 S. Ct. at 2523.
[2] Although the U.S. District Court for the Northern District of Texas stated that the use of discretion may not be an action cognizable for a disparate impact claim, the U.S. Supreme Court might find the use of discretion to be a cognizable claim. HUD has interpreted its Fair Housing Act discriminatory effects rule to make any facially neutral action, including those that allow for discretion or the use of subjective criteria to be actionable under the Fair Housing Act. 78 Fed. Reg. at 11,468, 11,469, 11,479; HUD, Implementation of the Fair Housing Act’s Discriminatory Effects Standard, 76 Fed. Reg. 70,921, 70,924 (proposed Nov. 16, 2011). In a case involving Title VII of the Civil Rights Act, one of the statutes that HUD and the U.S. Supreme Court used to interpret the Fair Housing Act, the U.S. Supreme Court held that a city’s exclusion of certain applicants implicated Title VII’s prohibitions. Lewis v. City of Chicago, 560 U.S. 205 (2010). Also, the Administrative Procedure Act, which authorizes judicial review of federal agency action, includes omissions or the failure to act in the definition of agency action and assures complete coverage of every form of agency inaction. 5 U.S.C. 551(13), 701(b)(2); FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 238 n. 7 (1980).
[3] Although the U.S. Supreme Court stated that serious constitutional questions could arise from the use of numerical or racial quotas and that difficult questions might arise if disparate impact liability caused race to be used and considered in a pervasive and explicit manner to justify governmental or private actions that tend to perpetuate race-based considerations rather than move beyond them, it also stated that race may be considered in certain circumstances and in a proper fashion and that race-neutral tools may be used and mere awareness of race in attempting to solve the problems facing inner cities does not doom such endeavors. Tex. Dep’t of Hous. & Cmty. Affairs, 576 U.S. __, 135 S. Ct. at 2523-25.