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July
18, 2002 8:45 a.m.
Quiet
Bomb
(Un)fair
housing gets a hearing.
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 uring
the last week of its just completed term, the Supreme Court granted review
in a case called Cuyahoga Falls v. Buckeye Community Hope Foundation.
The Court's decision got very little publicity, but one of the issues
in it is extremely important. The question is whether the federal Fair
Housing Act — which bans discrimination on the basis of, among other
things, race — can be violated by someone who does not engage in
racial discrimination.
Now, the answer to
that question ought to be an obvious no, but unfortunately most of the
lower federal courts have allowed "disparate impact" claims
to be brought under the statute. These claims do not allege, and need
not prove, that individuals were treated differently because of their
race. Instead, it is enough to show that a neutral practice has a disproportionate
effect — that is, a disparate impact — on some racial group.
For instance, if
a landlord refuses to rent to people who are unemployed, and it turns
out that this excludes a higher percentage of whites than Asians, then
a white would-be renter could sue. It would not matter that the reason
for the landlord's policy was race neutral and had nothing to do with
hostility to whites. He would be liable, unless he could show some "necessity"
for the policy. This, in turn, would hinge on whether he could convince
a judge or jury that the economic reasons for preferring to rent to the
gainfully employed were in some way essential. And this, unfortunately,
is a roll of the dice.
There are lots of
other examples of race-neutral policies that can be challenged because
of the disparate impact they have in the housing market. Suppose an insurance
company refuses to write policies for homes that are more than 40 years
old, or if their market value is less than $40,000 (such rules are in
fact common). That might have a disparate impact. Or suppose a lender
refuses to make home loans to felons or people with poor credit ratings.
That also might have a disparate impact. The same is true if a city makes
a particular zoning decision (the underlying controversy in the Cuyahoga
Falls case) or has per-house or per-apartment occupancy limits (an
increasing area of controversy in many communities).
No one has any quarrel
with the proposition that there should be liability under the Fair Housing
Act if a policy singles out particular racial groups for disparate treatment,
or if an ostensibly race-neutral policy is in fact unequally enforced,
or even if a neutral policy — say, a "grandfather clause"
— is deliberately adopted because of the fact that it will tend to
exclude members of this or that racial group. The issue, rather, is whether
a policy that is racially neutral by its terms, in its application, and
in its intent can nonetheless be treated as illegal discrimination because
of racially disproportionate results.
It is a good sign
that the Supreme Court has granted review in Cuyahoga Falls. A
majority of the justices are clearly uncomfortable with the disparate
impact approach in a variety of contexts, and rightly so. It is a powerful
engine in favor of quotas and racial preferences and against rational
and productive selection criteria — which is exactly why the civil-rights
left is so enamored of it. Thus, in the past year, the Court has raised
questions about the legality of federal regulations that use the disparate
impact approach and granted review in another case (later dismissed) that
challenged the approach under the Age Discrimination in Employment Act.
The last time the
disparate-impact controversy made it to the Supreme Court in a housing
case, in Town of Huntington v. NAACP (1988), the Court expressly
"reserved" the issue — that is, it raised and recognized
the question but then decided not to resolve it. In that case, the Reagan
administration had filed a brief urging the Court to rule against the
"disparate impact" approach. The first Bush administration continued
this policy, but the Clinton administration reversed it. The second Bush
administration should file an amicus brief in the Cuyahoga Falls
case, endorsing the Reagan administration's approach. We shall see.
—
Roger Clegg is general counsel of the Center
for Equal Opportunity.
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