Fed. Dist. Court in AZ Denies City’s Motion for Summary judgment as to Plaintiffs’ Disparate Impact Claim under the FHA

The City of Yuma, Arizona, renewed its motion for summary judgment as to plaintiffs’ Fair Housing Act disparate impact claim, arguing that plaintiffs Avenue 6E Investments, LLC and Saguaro Desert Land, Inc. (jointly “Plaintiffs” or “the Hall Company”) failed to present appropriate statistics to establish a prima facie case of disparate impact and, alternatively, that it had a legitimate and nondiscriminatory basis for denying the Hall Company’s rezoning request. This motion was originally denied as moot after the court dismissed Plaintiffs’ disparate impact claim on other grounds. On appeal, the Ninth Circuit reversed the court’s dismissal and directed it to consider the arguments raised regarding the sufficiency of Plaintiffs’ statistical showing of disparate impact.
In order to demonstrate that the denial had a disproportionate effect on Hispanics, Plaintiffs hired an expert who specialized in research, training, policy evaluation, and program development in the areas of housing and community development discrimination: Dr. Calvin Bradford. In order to compare the percentages of Hispanics and whites who were qualified home buyers in the identified price ranges in the Yuma market during the relevant time period, Dr. Bradford used data from the Home Mortgage Disclosure Act (HMDA). This provided statistical evidence, based on a pool of qualified home purchasers within the relevant market area and during the relevant time frame, regarding the racial makeup of those priced out of the market as a result of the price increase associated with the City’s denial of Plaintiffs’ rezoning application.

Additionally, Plaintiffs put forth evidence to support its disparate impact claim allegations that comments were made in letters and during council meetings indicating that the neighbors opposing the rezoning request did so because of discriminatory animus against Hispanics and that they communicated such animus to the City Council. The court found this evidence showed that the City Council, at least in part, based its denial on the opposing neighbors’ concerns.
In response, the City asserted two legally sufficient reasons for denying the rezoning. The first stated reason for the denial was the neighbors’ reliance on the Property’s preexisting zoning and plat. The City cited to evidence in which one council member explained that he voted against the rezoning because the neighbors relied on the R-1-8 zoning and preliminary plat that already existed for that Property when they bought their homes in the neighboring developments. Despite this, there was no evidence presented to the City Council showing that Plaintiffs’ proposed development would adversely affect neighboring property values. Conversely, at the time of the City’s denial, there were no homes within the development abutting much of the Property’s western boundary, and plaintiffs agreed to provide a buffer consisting of larger, 8,000 square foot lots on its southern boundary for the neighbors in the existing development.
The City’s second reason for the denial was based on Plaintiffs’ failure to accept the City’s proposed compromise, which consisted of providing a buffer of 8,000 square foot lots along the full extent of the Property’s western border as well as its southern border. However, viewing the evidence in favor of Plaintiffs, the court did not find that the buffer issue was a legitimate basis for denying the rezoning request. Furthermore, this evidence of Plaintiffs’ proposed buffer created an issue of fact regarding whether there was an alternative to the City’s outright denial of the rezoning request that would have had a less discriminatory effect. Accordingly, the City’s for summary judgment as to Plaintiffs’ disparate impact claim under the FHA was denied.
Avenue 6E Investments, LLC v City of Yuma, 2017 WL 1550414 (D. AZ 5/1/2017)