576 U.S. 519, 135 S.Ct. 2507 (2015)
In 2008 the Inclusive Communities Project, Inc., a Texas-based nonprofit that assists low-income families in obtaining affordable housing, filed suit in the United States District Court for the Northern District of Texas against the Texas Department of Housing and Community Affairs and its officers.1
The complaint asserted a disparate-impact claim under sections 804(a) and 805(a) of the Fair Housing Act.2 It alleged that the Department had caused continued segregated housing patterns by allocating too many low-income housing tax credits to predominantly black inner-city areas and too few to predominantly white suburban neighborhoods.3
The District Court concluded that statistical evidence established a prima facie case of disparate impact.4 It found that from 1999 to 2008 the Department approved 49.7 percent of proposed non-elderly units in census tracts that were 0 to 9.9 percent Caucasian but only 37.4 percent of such units in tracts that were 90 to 100 percent Caucasian.5 It also found that 92.29 percent of tax-credit units in Dallas were located in tracts with less than 50 percent Caucasian residents.6
After assuming the Department’s proffered interests were legitimate, the court held that the Department failed to prove the absence of less discriminatory alternatives and entered judgment for the plaintiff.7 It later issued a remedial order that added new selection criteria such as points for units in neighborhoods with good schools.8
While the Department’s appeal was pending in the Court of Appeals for the Fifth Circuit, the Secretary of Housing and Urban Development issued a regulation interpreting the Fair Housing Act to encompass disparate-impact liability and establishing a burden-shifting framework.9 The Fifth Circuit held that disparate-impact claims are cognizable under the Act but reversed and remanded on the merits, concluding that the District Court had improperly required the Department to prove the absence of less discriminatory alternatives.10
The Department petitioned for a writ of certiorari on the question whether disparate-impact claims are cognizable under the Fair Housing Act.1112 The Supreme Court granted review.
The federal low-income housing tax credits at issue are distributed to developers by state agencies pursuant to 26 U.S.C. §42.13 Texas law requires applications to be scored under a point system that gives priority to statutory criteria such as financial feasibility and tenant income levels.14 The Texas Attorney General has advised that additional criteria may be considered if they receive fewer points than the statutory factors.15
The Fair Housing Act was enacted in April 1968 shortly after the assassination of Dr. Martin Luther King, Jr. The statute responded to the findings of the National Advisory Commission on Civil Disorders, which documented persistent residential segregation and recommended a comprehensive open-occupancy law prohibiting discrimination in the sale or rental of housing on the basis of race, creed, color, or national origin.16
Whether disparate-impact claims are cognizable under the Fair Housing Act?17
Disparate-impact claims are cognizable under the Fair Housing Act when the statutory text refers to the consequences of actions rather than the mindset of actors.18 The interpretation must also be consistent with the statutory purpose.19 This rule was established in Griggs v. Duke Power Co. and Smith v. City of Jackson.20 It was ratified by the 1988 amendments to the FHA.21
Yes. The text of sections 804(a) and 805(a) of the Fair Housing Act uses results-oriented language such as 'otherwise make unavailable' that refers to the consequences of an action rather than the actor's intent.22
This language supports the conclusion that the Act encompasses disparate-impact claims.23 The Inclusive Communities Project brought such a claim alleging that the Texas Department of Housing and Community Affairs caused segregated housing patterns through its allocation of tax credits.24
This interpretation aligns with the purpose of the Act to eradicate discriminatory practices in housing.25 The statute was enacted in 1968 in response to findings of persistent residential segregation by the National Advisory Commission on Civil Disorders.26 The 1988 amendments to the Act, which included exemptions from liability that would be superfluous without disparate-impact claims, confirm that Congress ratified the unanimous view of the Courts of Appeals recognizing such liability.27
The Fifth Circuit's holding that disparate-impact claims are cognizable under the Act is consistent with this rule.28
Disparate-impact claims are cognizable under the Fair Housing Act.
Related opinions on this issue
Justice Thomas dissented, arguing that the foundation for the majority's disparate-impact regime rests on Griggs v. Duke Power Co., which he viewed as wrongly decided.29 He contended that Title VII requires proof of discriminatory intent rather than effects alone.30 Extending Griggs' regime to the Fair Housing Act would amplify that foundational error.31
The result would be unconstitutional racial balancing achieved by presuming that any racial imbalance at an institution must result from discrimination by that institution rather than from external factors or innocent private decisions.32 He urged confining Griggs to its original context and rejecting its application to the FHA.33
Joined by Chief Justice Roberts, Justice Scalia, Justice Thomas
Justice Alito dissented, joined by the Chief Justice, Justice Scalia, and Justice Thomas.34 He contended that the phrase 'because of' in sections 804(a) and 805(a) requires proof of discriminatory intent rather than mere disparate effects.35 The 1988 amendments do not implicitly authorize disparate-impact liability because they neither modified the operative text nor ratified lower-court decisions on the issue.36
Such liability would place housing authorities in an untenable position.37 They could face suit whether they allocate tax credits to revitalize inner-city areas or to promote housing in suburban neighborhoods, regardless of the legitimate objectives served by either choice.38