The people who fight housing discrimination and residential segregation in America were bracing for a defeat last Thursday when the U.S. Supreme Court’s ruled on Texas Department of Housing v. Inclusive Communities Project. But instead of gutting a decades old legal theory known as “disparate impact,” as court watchers had predicted, Justice Anthony Kennedy penned a strong defense of the anti-racism tool on behalf of a 5–4 majority.
Prior to Thursday, the prognosis for fair housing work seemed grim. If the Justices had stripped or curtailed disparate impact arguments, University of Minnesota School of Law professor Myron Orfield told ThinkProgress, “it would have taken away one of the best tools to go after segregation that Congress ever created. It would’ve been really hard to go after institutional entities like banks and brokers whose discrimination is difficult to prove.”
“Disparate impact” means that a government policy or business practice produces a more segregated world, regardless of what feelings toward people of color were in the hearts of the policymakers or businesspeople responsible.
“If you’re a racist bastard and you wanna segregate tax credits, what you do is put them all in black areas marked by slums and blight,” Mike Daniel, who argued the case on behalf of the Texas non-profit along with his legal partner Laura Beshara, explained. “That’s what happened in Houston and Dallas. Now, whether you’re a racist or not, what you’ve gotta do is quit. You can no longer put all the units in minority neighborhoods marked by slums and blight,” he said.
Both Justice Clarence Thomas and Chief Justice John Roberts argued that disparate impact lawsuits will be used to paralyze housing development efforts in cities where segregation is already extreme. Thomas predicts that cities like Houston will find it impossible to build or repair any low-income housing units, because segregation levels are so high that any additional housing capacity would produce the kind of statistical evidence of increased segregation that is the backbone of a disparate impact suit.
The ruling asserted the country’s core interest in preventing the country from devolving into a split pair of worlds where white and non-white citizens live entirely separately and enjoy radically different social and economic possibilities.
The Court is giving heart to fair housing advocates around the country, Orfield said. “There were a lot of very good decisions on the Fair Housing Act in the 1970s. But people were concerned they were no long good law and they weren’t using them anymore. This returns a lot of the good tools that were already there and reaffirms that they exist,” he said.
As advocates retreated from aggressive disparate impact arguments, a kind of stasis took hold in the affordable housing development world that allowed segregation to worsen. “Most of these big cities are just saturating every single unit of affordable housing in poor neighborhoods,” Orfield said, to satisfy pledges to build new housing without doing the harder, concerted work required to foster real mixed-income and mixed-race communities. “This decision calls that out and says that’s not acceptable.”
The decision will help steer federal dollars to affordable housing development in more desirable neighborhoods. “Now they may or may not be minority neighborhoods,” IPC attorney Daniel said, “but they’re not gonna be built next to landfills. Which, believe it or not, all of those neighborhoods that are near landfills right now are minority neighborhoods.”
“Nothing about this decision forces people to leave their neighborhood,” Orfield said. “It forces you to give people choices. What it says is you can’t build every unit of housing in the neighborhood where everybody already has the choice to live there.”
If governments are going to succeed in providing geographic and school district choice for people of color who have never really had more than one option, they’ll have to start understanding housing diversity as more than just a city problem. “When cities undertake efforts to desegregation by themselves, it doesn’t work very well. People just leave the cities. But when you do it as a metropolitan area, it works very well,” Orfield said.
“There are two major reasons we haven’t made more progress. One is white racism and NIMBYism. The other is the enormous strength of a poverty housing industry” that reinforces the problem instead of combating it, Orfield said. “For every white NIMBY, there’s someone making a living building affordable housing in segregated neighborhoods or operating a charter school that intentionally served a segregated population.” Such projects prop up the existing level of segregation in a city by ensuring that people of color continue to face limited options for where to live and where to send their kids to school.
Meanwhile, the strength and clarity of the court’s majority opinion in the case gives advocates confidence that various housing industry actors will start looking for ways to get proactive about fighting segregation, instead of digging in their heels.
“Governments and industry people are gonna pay attention to it, not wait til they get sued,” Daniel said.
Daniel isn’t alone in predicting such a quasi-voluntary adaptation to clear and settled housing discrimination law. It’s happened before, National Fair Housing Alliance general counsel Morgan Williams said, with concrete benefits across the entire housing market. “We’ve seen market players become fairer by becoming smarter,” he said, such as when court decisions in the 1990s forced the housing insurance industry to stop capping coverage at the on-paper value of a home.
“That’s a policy that in communities of color, with historic undervaluing in African-American communities, would create fundamental unfairness in the structure of the insurance industry,” he said. But court decisions and advocacy outreach created “an insurance industry that’s based on coverage for the cost of rebuilding. As a result, communities of color now are able to access coverage that more fully ensures they’re able to rebuild in the face of destruction, as anyone in other communities would be able to do.”
If cities and developers respond with both the proactive planning that Williams and Daniel hope for and the expanded understanding of the problem that Orfield says is necessary, there’s a chance that the country could start seeing real progress on the physical divisions that are at the root of more explosive racial conflict.
“I think we’re seeing the fruits of this self-reinforcing segregation in Ferguson, in Baltimore, and all over the country,” Orfield said. “We have to use our housing system to make progress toward a more integrated society, not just rebuilding and resurfacing slums.”