Adverse Ruling Would Significantly Undermine Downtown Redevelopment Initiatives
On July 17, the Supreme Court granted certiorari in the case of Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc. The issue before the Court is whether disparate impact claims are cognizable under the Fair Housing Act (FHA). If the Court were to reach such a conclusion, local municipalities would be subject to plaintiff suits for the unintended adverse impacts of their housing and redevelopment policies on minority populations.
Mount Holly Gardens is a section of the Township of Mount Holly in Central New Jersey. The neighborhood consists of about 300 brick units, originally constructed in the 1950s for military housing. In recent years the neighborhood had fallen into a period of decline, experiencing problems with absentee landlordism, and abandoned units. Many of the existing houses had been boarded up to prevent stripping of their valuables and piping. The area also became plagued with drug dealing and criminal activity. In 2002 the township declared the neighborhood blighted and in need of redevelopment.
From the start, the city’s plans for redevelopment were surrounded by a cloud of suspicion and distrust. Residents feared that they would be forced out of their neighborhoods because the proposed plans failed to provide for a sufficient amount rehabbed units and new affordable housing. In 2003, residents who were predominately African American or Hispanic, filed suit under the FHA, alleging that the redevelopment had a disparate impact on minority citizens who would be forced to vacate their neighborhood.
The town’s current redevelopment plan calls for the neighborhood to raze 329 roughhouses to make way for 228 apartments, 292 townhouses, and 54,000 square feet of commercial space. The plan includes provisions to allocate about 10 percent of the neighborhood for affordable housing, which is consistent with the state Council on Affordable Housing Standards (COAH). In September 2011, the Third Circuit ruled that the redevelopment plan may have been discriminatory, and in violation of the FHA, even if that was not the township’s intent.
In its petition for grant of certiorari, the township argues that a disparate impact claim is not appropriate under the FHA based on the language of the statute, and that the claim has not been read into other civil rights statutes. The township further argues that limiting FHA claims to matters of discriminatory treatment is sufficient to further the FHA’s goals. The residents, in response, observe that all eleven circuit courts and the HUD – the agency charged with enforcing the FHA – have consistently held disparate impact claims to be cognizable under the FHA.
A test on this same issue was in the City of St. Paul’s code enforcement initiative against slum landlords. The landlords asserted that enforcing the code to make them comply would have a disparate impact on their tenants who were mostly minorities. HUD has recently incorporated the disparate impact concept into its regulatory regime and it affords the government a significant tool in fighting discriminatory housing practices. Thus, this case raises a serious issue of balance between protecting local governments from disparate impact claims and preserving a tool to enforce discriminatory policies that fail the discriminatory treatment test, but meet the discriminatory impact test. This is an important issue where officials seek to revitalize downtrodden neighborhoods, or where land use policies have the effect of gentrification.
Source: International Municipal Lawyers Association