This year marks the 40th anniversary of the Fair Housing Act (FHA) (see http://www.hud.gov/offices/fheo/FHLaws/ for a wealth of information about the FHA from HUD). A number of FHA cases have been making their way through the courts. The following case from the Northern District of New York certifies questions of disparate impacts for the Second Circuit Court of Appeals.
The Plaintiffs, developers of a proposed housing development in Saratoga Springs, NY which was to include 20% affordable units, claimed that the City’s prevention of the construction of this project amounted to intentional discrimination against African-Americans and families with children. In addition, the plaintiffs argued that this had a disproportionate and segregative impact on African-Americans. In October 2007, the District Court denied the City’s motion for summary judgment except with respect to dismissal of the alleged State human rights law violation. With respect to the FHA claims, the City asked the Court to certify an interlocutory appeal to the Circuit Court, a request that is granted only in extraordinary circumstances [(1) where the court’s decision involves a controlling question of law, (2) where there is substantial ground for difference of opinion, and (3) where an immediate appeal may materially advance the ultimate determination of the litigation. See, 28 U.S.C. sec. 1292(b)]. The defendants posed a number of questions related to the Court’s Order on their motion for summary judgment which they believed warranted certification for interlocutory appeal. The Court categorized them into two groups: questions relating to the timeliness of certain aspects of the plaintiffs’ actions; and questions relating to the sufficiency of the plaintiff’s disparate impact analysis.
While the Court denied the request for interlocutory appeal on the timeliness questions, they did certify the questions related to disparate impact. Specifically, the Court noted that the Plaintiffs’ alleged that the City’s overall land use policies prevented the construction of affordable housing, including those proposed as part of their project, and that this has a discriminatory and segregative effect on African Americans. In support of this claim, the Plaintiffs pointed to evidence that only 17 affordable housing units, excluding those exclusively for seniors, had been built in the City since 1994, while 2,300 market rate units had been built during that time, and that 57% of African-American families in the City qualified for affordable housing while only 27% of all City families qualified. In response, the City focused on discrete reasons why the Plaintiff’s particular project was denied. Further, they urged the Court to focus on the May 2003 citywide rezoning which allegedly provided opportunities for expanded affordable housing in general. The City also contended that the Plaintiff’s disparate impact analysis was flawed as the denial of their project did not have an actual or predictable discriminatory effect on protected groups, and further, that the Plaintiff’s expert ignored that 80% of the units proposed by Plaintiff’s project were market rate units.
After the district court initially denied both parties’ motions for summary judgment on this issue, the City raised a number of specific questions for certification. First, the City contends that it is improper for plaintiffs to premise their disparate impact claim on the effects of the City’s land use policies in general. Rather, they assert, the focus should be on the rezoning of the particular area where the proposed project is located. If this is the proper area/focus, the City asserts that the disparate impact analysis must reflect a statistical model that identifies the likely occupants of the proposed project, and it must include the fact that 80% of the proposed units are market rate. Significantly, the City points out that to allow a disparate impact claim to move forward on the Plaintiff’s analysis would basically allow any developer to circumvent zoning restrictions by simply attaching a minimal number of affordable housing units to a project proposal and establishing that minorities disproportionately qualify for such units. In certifying this question, the Court noted that “while it is clear that a disparate impact claim properly focuses on the overall discriminatory effect of a municipality’s land use policies against protected groups, there is substantial reason to doubt whether a developer may bring such a challenge under the FHA without showing that its proposed development would have alleviated such impact.” Further, the Court concluded that “while in the court’s opinion, plaintiff’s have put forth sufficient evidence of disparate impact, it is conceded that defendants have a strong argument that the statistical data relied on by plaintiffs is insufficient as a matter of law to establish such a claim.”
Additionally the Court noted that an FHA claim arising from the frustration of a proposed housing development which would contain only 20% of affordable units, “presents controlling questions about the proper impact analysis and whether the Act even applies.” Further, the Court acknowledged that “the FHA was by no means enacted to provide developers an avenue to override zoning restrictions by attaching a minimal number of affordable housing units to its development proposals. As such, it may be that a disparate impact challenge arising out of the frustration of such a development is simply beyond the scope of the FHA.”
Anderson Group, LLC v. City of Saratoga Springs, 2008 WL 2064969 (N.D.N.Y. 5/13/2008).
