Posted by: Patricia Salkin | February 2, 2014

Fed. Dist. Court in NY Finds City Violated the FHA By Enacting a Zoning Amendment that had a Mixed Motive of Discrimination

MHANY Management, Inc. (“MHANY”) – formerly known as New York ACORN Housing Company, Inc. (“NYAHC”), and New York Communities for Chance (“NYCC”) – the practical successor to former plaintiff, New York Association of Community Organizations for Reform Now (“New York ACORN”) (collectively, “Plaintiffs”), filed suit against the Incorporated Village of Garden City and the Garden City Board of Trustees (collectively, “Defendants”) for various claims of discrimination in connection with the rezoning of property allegedly done to prevent the construction of low- and middle-income housing. Specifically, Plaintiffs asserted claims of disparate treatment and disparate impact under the Fair Housing Act (“FHA”), as well as violations of 42 U.S.C. § 1981, 42 U.S.C. § 1983, and the Equal Protection Clause of the Fourteenth Amendment.

The Plaintiffs’ expert, Nancy McArdle, conducted an analysis of Nassau County and testified that while the minority population in Nassau County was 20.3% in 2000, the minority population of Garden City was only 4.1% in the same year. Furthermore, 14.8% of all Nassau County households were African-American or Hispanic, while 53.2% of non-elderly renter households with “very low” income were African-American or Hispanic. In 2000, 88% of Nassau County’s waiting list for Section 8 (federally subsidized) housing was composed of African-Americans.

The court provided an overview of the history of affordable housing options in Garden City. Former Nassau County Executive Thomas Suozzi testified at trial that the County was in need of more affordable housing, which is defined as housing that is “financially attainable for households earning 80% or less of the Area Median Income for the Nassau-Suffolk Metropolitan Statistical Area.” Village Administrator Robert Schoelle also testified that Garden City contained virtually no affordable housing. The Village had also declined to join a Nassau County group that receives federal funding for affordable housing. Schoelle further testified that in 1989, a developer attempted to construct affordable housing at the Doubleday & Co. site in Garden City. A building moratorium prevented the construction of such housing, and recently, the property was approved for a luxury development. In 2006, the County announced its intention develop affordable housing on a parcel of land (“Ring Road Site”) located in Garden City. Village residents opposed the construction of affordable housing, and to date, nothing has been built at the Ring Road Site.

In its discussion of “Evidence of Discriminatory Acts in Garden City,” the court noted that in 2005, the New York State Attorney General found that Garden City had enforced a local zoning law in a racially discriminatory manner. As a result, Garden City adopted policies and procedures to avoid these laws being enforced discriminatorily.

The court next began its factual discussion of the particular zoning decisions at issue. In May of 2002, Nassau County drafted a Real Estate Consolidation Plan (the “Plan”) to balance government property with property that could be sold to fund renovations for County operations. One parcel of land considered under the Plan was located in Garden City in its Public “P-Zone,” which included some public governmental facilities. The County sought to sell a portion of the P-Zone (the “Site”) to a private developer for around $30 million. In June of 2002, the Village created a sub-committee (“P-Zone Committee”) to consider zoning options for the Site to be developed. This committee consisted of three Village Trustees. The Village also retained the firm Buckhurst Fish and Jacquemart (“BFJ”) to advise it throughout the re-zoning process.

BFJ sent Garden City an outline of the County’s “general planning principles,” which required that any rezoning be “consistent” with Garden City’s existing character, “not overburden roads, utilities, and schools,” not cause a depreciation on property value, and protect the environment and traffic safety. BFJ later sent a memorandum to Garden City in which it recommended that the Site be re-zoned to allow for both commercial and residential use. A multi-family residential group (“R-M”) zone would allow for 311 residential units to be built. BFJ stated that the zone would “be likely to generate a net tax benefit to the Village.” When the R-M zone was proposed at a public forum, several Village residents expressed concern about the effects the zone would have on traffic and schools. BFJ then revised its study to suggest that Garden City zone the Site under the “CO-5 zone, which would permit residential development of either 311 apartment units or approximately 75 single-family houses.” This zone would generate a smaller increase in school children than the previous zone proposal. Shortly thereafter, the P-Zone Committee adopted BFJ’s recommendation for the proposed R-M zoning.

BFJ issued a draft Environmental Assessment Form (“EAF”) in September of 2003 that considered the impacts of the proposed R-M zone and concluded that the zone would result in either no impact or a positive impact on the environment. In November of 2003, the Board accepted BFJ’s and the P-Zone Committee’s recommendations to create the R-M zoning. In January of 2004, Garden City held a public hearing to discuss the new zoning. The Village received much opposition and concerns regarding increased traffic, school children, and parking problems. The following month, Garden City held another public hearing, which Suozzi attended. The residents continued to oppose the development of multi-family housing, specifically objecting to “full families living in one bedroom townhouses, resulting in overburdened and overcrowded schools … and that whole section of people who use the bus to access the Department of Social Security.” At this hearing, a Village Trustee stated that the Village did not intend to create “so-called affordable housing,” but rather “upscale” housing. Suozzi also told the residents that Garden City did “not want to see multi-family housing,” but rather “single-family housing,” and that the County had no interest in building affordable housing at the Site.

After months of continued opposition to the R-M zoning since the January 2004 hearing, BFJ made a proposal for a new type of zoning altogether: R-T zoning. R-T zoning would eliminate the possibility of multi-family housing and would only allow for “townhouses,” or single-family housing. When a New York ACORN member expressed concern that this would not resolve the County’s need for affordable housing, a P-Zone Committee member responded that the R-T zoning was a response to traffic concerns posed by affordable housing. New York ACORN members, as well as NYAHC, continued to oppose R-T zoning for its elimination of affordable housing.

In June of 2004, the R-T zoning was adopted and enacted. The County stated that it would not accept bids for construction for less than $30 million. As a result, the Plaintiffs claimed that this made it impossible to build affordable housing. NYAHC and New York ACORN met with County officials to discuss the construction of affordable housing at the Site, but no changes were ever made. NYAHC then submitted a “protest” proposal to the County to develop affordable housing at the Site for less than the required $30 million. Nevertheless, the development contract was awarded the highest bidder (“Fairhaven”) for $56.5 million.

McArdle conducted statistical analyses that showed that between 3 and 6 minority households could afford one of the new townhouses. McArdle testified that while the NYAHC proposals would have caused an increase in Garden City’s racial diversity, the Fairhaven proposal would have left the Village’s racial composition unchanged.

In May of 2005, New York ACORN, NYAHC, and several individual Plaintiffs filed suit asserting claims under the FHA and various other federal and constitutional claims. By 2012, after a lengthy procedural history, the remaining Plaintiffs were MHANY and NYCC, and the remaining causes of action were the FHA claims, the 42 U.S.C. §§1981 and 1983 claims, and the Fourteenth Amendment Equal Protection claims. In June of 2013, the court commenced a bench trial and the present opinion resulted.

The district court’s discussion began by addressing some preliminary issues of constitutional standing, statutory standing, and mootness. After finding that (1) the Plaintiffs all had constitutional standing, (2) the Defendants waived any challenge to statutory standing by not raising the issue sooner, and (3) the Plaintiffs’ claims were not moot, the district court began its discussion of the merits of the Plaintiffs’ claims.

The court began by considering the FHA claims against the Defendants. The purpose of the FHA is to provide “fair housing throughout the United States,” making it unlawful to refuse to sell, rent, or otherwise deny a dwelling to any person “because of race, color, religion, familial status, or national origin.” The Second Circuit has concluded that discriminatory zoning practices fall within the FHA protections. A plaintiff asserting such discrimination must prove either (1) disparate treatment or (2) disparate impact. The Plaintiffs in the present case asserted both theories of liability.

The first FHA claim discussed here was under the disparate treatment theory. A disparate treatment claim requires the plaintiff to first show that “the animus against the protected group was a significant factor in the position taken by the municipality.” The evidence provided may be direct or inferred through factors such as (1) whether the official action has a more heavy impact on one race than another, (2) “the historical background of the decision,” (3) the events leading up to the decision, (4) procedural or substantive departures from the usual decision-making process, and (5) “contemporary statements by members of the decision making body, or reports.” Once a plaintiff demonstrates discrimination based on these factors, the burden shifts to the defendant to “proffer a legitimate, non-discriminatory reason for its actions.” The burden is one of production, not persuasion. Finally, the court must consider “discrimination vel non,” by evaluating “whether the evidence, taken as a whole, is sufficient to support a reasonable inference that prohibited discrimination occurred.”

With respect to the first factor, the court concluded that the Plaintiffs’ statistical expert, McArdle, provided sufficient evidence that the change from the R-M zoning to R-T zoning had a greater impact on minority residents than it did on non-minority residents.

The court then discussed the second factor – historical evidence of racism in Garden City. The court considered the relevant background and discounted them all because (1) the application for Doubleday was filed 15 years prior to the events at issue, and it was thus too far removed in time for it to have any relevance; (2) there would be a “chilling effect on any entity’s willingness to enact similar guidelines” if the court were to place weight on the Village’s 2005 adoption of the anti-discrimination policy; and (3) the opposition to the Ring Road site occurred two years after the zoning change at issue, and this has “little relevance” to the Defendants’ previous discriminatory intent.

Next, the court considered the sequence of events leading up to the R-T Zone’s adoption, and concluded that they “give rise to an inference of race-based animus” by the Defendants. The court found it telling that despite BFJ’s recommendations in support of the R-M Zone, as well as the initial support from both the County and the Board, these same parties “reversed course” after hearing opposition from the residents at public meetings. The Defendants insisted that the R-T zoning did not prohibit affordable housing, but the court explained that a facially neutral law does not prove an absence of disparate impact. The court likewise rejected the Defendants’ argument that the R-M zoning proposals were merely “initial thoughts” that evolved naturally into the R-T zoning. The court found this unavailing since the P-Zone Committee had spent significantly more time deliberating on the R-T zoning than it did on the R-M zoning. The R-T zoning appeared to be a direct response to the public opposition to the R-M zoning.

Finally, the court stated that it did not have sufficient evidence to consider whether there were departures from normal procedural sequences. Although there was evidence of potential departures, there was no evidence regarding the “customary zoning procedures” with which to compare.

After evaluating the aforementioned factors, the court determined that the Plaintiffs satisfied their initial burden to show that racial discrimination was a significant factor in the enactment of the R-T zoning. The burden thus shifted to the Defendants to present a legitimate, non-discriminatory basis for its actions. In support of this, the Defendants asserted that their decision to enact the R-T zoning was based on the fact that it met the planning principles better than the R-M zoning did. The Defendants provided statistical studies that suggested that 311 multi-family units would have more than doubled the amount of traffic generated by the proposed number of single family homes. Additionally, the Defendants provided statistical evidence that the R-M zoning provisions would have led to an average of one additional school child per unit, whereas the R-T zoning “aimed at young couples and empty nesters” would have resulted in “as few as 0.2 to 0.3 public school children per unit.” The court here concluded that overall, the Defendants met their burden by providing at least one nondiscriminatory reason for their zoning decision.

Since the Defendants satisfied their burden, a presumption of discrimination was not applied and the court went on to consider whether there was discrimination vel non. The court noted that although the Defendants demonstrated that they had legitimate concerns about traffic when they made the decision at issue, this did not preclude a finding that the Defendants had illegitimate discriminatory animus as well. In this respect, the court found that the Defendants did act with discriminatory intent based on (1) the sequence of events immediately preceding the public opposition to the R-M zoning and (2) the “considerable impact” that the decision had on minorities in the area.

The court labeled this case a “mixed motive” case under the FHA because the Defendants’ zoning decision was based on both legitimate and illegitimate considerations. Such cases have not yet been examined by the Supreme Court. Therefore, the court here engaged in an in-depth discussion of the history of the relevant statutes and case law pertaining to mixed motive cases. The court ultimately concluded that the governing Second Circuit case law allows for a defendant that uses a discriminatory factor in reaching a zoning decision to escape liability if it can prove that the same decision would have resulted even without the impermissible discriminatory consideration.

Here, the court determined that the Defendants failed to meet their burden to show that even without the discriminatory considerations they would have reached the same decision to shift from R-M to R-T zoning. In support of this, the court noted that “while residents raised traffic concerns prior to increase in public opposition to affordable housing, the figures concerning traffic relied upon by the Garden City Defendants derive[d] from the April 2004 presentation, given after the increase in public opposition against affordable housing and immediately before the change to R-T zoning.” Additionally, it was never clear whether the R-T zoning would have significantly improved the alleged traffic concerns presented by the R-M zoning. Finally, the court found it significant that there was no evidence that Garden City had any previous intentions of building townhouses, and even so, townhouses could have been better provided for under R-M zoning.

The court next considered the Plaintiffs’ FHA disparate impact claim. Such claims require a plaintiff to show “(1) the occurrence of certain outwardly neutral practices, and (2) a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant’s facially neutral acts or practices.” The plaintiff need only show that the facially neutral policy has a discriminatory effect on a particular minority group. Once the plaintiff has satisfied these showings, the burden shifts to the defendant to prove that its actions furthered a “bona fide governmental interest and that no alternative would serve that interest with less discriminatory effect.”

The court listed numerous facts that supported a finding of disparate impact. As the court had previously discussed, statistics showed that “minority households comprised 41.4% of very-low income renters in need of affordable housing, even though they comprised only 14.8% of all households in Nassau County.” This demonstrates Nassau County minorities’ disproportionate need for affordable housing, which the R-T zoning did not make available. The statistics further showed that only 2-4% of minorities would be able to afford the housing provided under the R-T zoning. While the R-T zoning made it financially impossible to build affordable housing, R-M zoning would have made it possible to build housing that 18-32% of minority households could afford. The R-T zoning also excluded Garden City from being able to accept anyone on the Section 8 housing waiting list, 88% of which was composed of minorities. The court here concluded that all the facts taken together suggested that the R-T zoning resulted in a disproportionate number of minorities being unable to afford housing in Garden City.

The burden then shifted to the Defendants to show that there was a bona fide governmental interest and no non-discriminatory alternative. The court had previously found that the Defendants had some genuine concerns about traffic and creating townhouses. However, the Defendants failed to establish the second part of their burden since the R-M zoning was a non-discriminatory alternative to the R-T zoning. As a result, the court concluded that the Plaintiffs proved the Defendants’ liability with respect to the disparate impact claim.

Finally, the court determined that by proving the Defendants’ discriminatory intent, the Plaintiffs had also established liability under 42 U.S.C. §§ 1981, 1983, and the Fourteenth Amendment Equal Protection Clause. The court’s analysis here was brief since the same facts and conclusions previously discussed were applicable to the §§ 1981, 1983, and constitutional claims.

MHANY Management, Inc. v. Incorporated Village of Garden City, 2013 WL 6334107 (EDNY 12/6/2013)

The opinion can be accessed at:

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