Mt. Holly bought up all but 70 of the homes in a predominantly black and latino neighborhood called Mount Holly Gardens and began razing parts of the neighborhood to clear it for redevelopment. The plan would have replaced homes the town bought for $30,000-$50,000 with homes valued at $200,000-$250,000.
In February, the Obama administration officially made the theory of “disparate impact” the determining factor for the Department of Housing and Urban Development’s (HUD) role as arbiter of housing discrimination. Disparate impact arguments allow the government to bypass the question of intent. Discriminatory intent is far more difficult to prove than discriminatory impact, which is simply a matter of statistics.
The United States Court of Appeals for the Third Circuit upheld the disparate impact claim from displaced Mount Holly Gardens citizens last June, opening the door for the top court to take the case. As Pro Publica explained in February, scholars believe Justices Samuel Alito and Clarence Thomas, as well as Chief Justice John Roberts, are seeking to strike down disparate impact in housing law, and the decision will hinge on Justices Antonin Scalia and Anthony Kennedy.
Housing discrimination has gone underground since laws banning outright discrimination took effect, as a recent HUD-funded study and numerous other examinations of the housing market have shown. In the words of HUD enforcement chief Sara Pratt, “Landlords, housing professionals, zoning and planning boards, have learned to stop talking about it. What they haven’t learned is to stop doing it.” That makes the ability to combat discrimination with quantitative impact findings, rather than telepathic intent findings, especially crucial.
The discrimination lawsuit Wells Fargo settled in early June was premised on such statistical proofs of discriminatory treatment of foreclosed properties depending on the racial makeup of the surrounding neighborhoods. Notorious subprime lender Countrywide paid a $335 million settlement after the government demonstrated in court filings that the firm systematically overcharged 200,000 minority borrowers. The standard is frequently applied in other areas of anti-discrimination law as well, such as in the recent Equal Employment Opportunity Commission complaints against Dollar General stores and BMW factories.
The high court attempted to address the use of disparate impact in housing law in its previous term, but then-Assistant Attorney General Tom Perez convinced the city of St. Paul, MN, to withdraw its appeal. Perez’s actions in keeping that case from reaching the bench were the rallying point for opposition to his nomination to head the Department of Labor. As Ian Millhiser previously explained in ThinkProgress, the GOP attempt to paint Perez’s role in preserving a key pillar of housing fairness law as a “quid pro quo” swindle can’t be reconciled with the facts. Now that anti-discrimination pillar is once again headed to the bench.