Supreme Court to Hear Fair Housing Case 

On Nov. 7, the U.S. Supreme Court agreed to hear a case to decide whether or not the Fair Housing Act allows racial discrimination claims under a disparate impact analysis and, if so, under what test or standard (Gallagher v. Magner, 619 F. 3d 823 (Eighth Cir. 2010). Disparate impact holds that even if an action is not intended to discriminate, it can still be considered discrimination if its effect is to have an “adverse impact” on members of a protected class.

The case is being closely watched by housing, lending and local municipalities because of claims that facially neutral policies have restricted services to protected classes. Apartment firms have successfully used the disparate impact argument to fight against zoning policies that restrict new affordable housing on the argument that such policies discriminate by denying housing to protected classes who would largely be served by the housing.

At issue in the Supreme Court case is a lawsuit brought against the city of St. Paul, Minn., by several apartment owners who claim that the city’s aggressive housing code enforcement increased the cost of and reduced the availability of affordable housing, harming racial minorities in violation of the Fair Housing Act.

The Eighth Circuit reversed an earlier decision dismissing the suit, ruling that the property owners provided sufficient evidence to support a disparate impact claim and should be allowed to proceed to trial.

NAA/NMHC are reviewing the specific details of this case for its impact on the apartment industry and will assess the need to weigh in with an amicus brief.

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