Background. Arlington Heights Factors. Arlington Heights. USSC Granted Certiorari Twice 12/2/2016

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1 Background The Evolution in Case Law and Policy under the Fair Housing Act s Duty to Affirmatively Further Fair Housing in Oregon and Beyond Oregon Chapter of the American Planning Association Legal Issues Workshop December 2, 2016 Speaker: Jennifer Bragar jbragar@tomasilegal.com Bases for AFFH includes: Title 8 of the 1968 Civil Rights Act as amended in U.S.C et. seq. (Fair Housing Act) Executive Order USC 3608(e) sets forth the duties of HUD s Secretary who shall: make studies with respect to the nature and extent of discriminatory housing practices in representative communities throughout the United States; publish and disseminate reports, recommendations, and information derived from such studies that: specify the nature and extent of progress made nationally in eliminating discriminatory housing practices and furthering the purposes of this subchapter, obstacles remaining to achieving equal housing opportunity, and recommendations for further legislative or executive action; and annually report to Congress, and make available to the public, data on the race, color, religion, sex, national origin, age, handicap, and family characteristics of persons and households who are applicants for, participants in, or beneficiaries or potential beneficiaries of, programs administered by the Department to the extent such characteristics are within the coverage of the provisions of law and Executive orders referred to in subsection (f) of this section which apply to such programs (and in order to develop the data to be included and made available to the public under this subsection, the Secretary shall, without regard to any other provision of law, collect such information relating to those characteristics as the Secretary determines to be necessary or appropriate). 2 Arlington Heights Metropolitan Housing Development Corporation v. Arlington Heights ( Arlington Heights ) 429 U.S. 252 (1977) The U.S. Supreme Court requires intent to make constitutional claims of housing discrimination. 3 Arlington Heights Factors On remand the 7 th Circuit set forth 4 factors to consider whether conduct that produces a discriminatory impact but was taken without a showing of discriminatory intent violates the FHA: 1. How strong is the plaintiff's showing of discriminatory effect; 2. Is there some evidence of discriminatory intent, though not enough to satisfy the constitutional standard of Washington v. Davis; 3. What is the defendant's interest in taking the action complained of; and 4. Does the plaintiff seek to compel the defendant to affirmatively provide housing for members of minority groups or merely to restrain the defendant from interfering with individual property owners who wish to provide such housing. Metropolitan Housing Development Corporation v. Village of Arlington Heights, 558 F.2d 1283 (7 th Cir. 1977). The case settled, therefore, the U.S. Supreme court did not get to review analysis of the factors. Thus, it is unclear whether disparate impact exists under the FHA as a method of proving a violation. 4 Circuit Split About Whether FHA Requires Intent or Whether Disparate Impact Is Sufficient Some cases to consider: Kennedy Park Homes Assoc. v. Lackawanna, 436 F2d 108 (2 nd Cir. 1970), cert. den. (1971). Decision: Evidence of discriminatory intent in the Town s actions to block a development marketed to people of color. Griggs v. Duke Power, 401 US 424 (1971). Decision: Disparate impact is sufficient to prove violation of the Civil Rights Act in hiring decisions. Arlington Heights v. MHDC, 429 U.S. 252 (1977). Decision: No evidence of discriminatory intent; disparate impact not sufficient to demonstrate FHA violation. USSC Granted Certiorari Twice Magner v. Gallagher (St. Paul) and Mt. Holly v. Mt. Holly Gardens are two recent examples of cases that were going to push the question of disparate impact as a way of proving intent to discriminate. But in the Magner case, the courts dismissed because the case settled, and in Mt. Holly the parties also settled

2 Executive Order on Fair Housing The Executive Order gives broad reach to the federalization of many local and state government acts and thereby the duty to affirmatively further fair housing. HUD adopted rules to implement the requirements of the Executive Order Department of Housing and Urban Development Implementation of the Fair Housing Act s Discriminatory Effects Standard, 78 Fed. Reg (Feb. 15, 2013) (to be codified at 24 C.F.R. pt. 100). The Order and rules require: Uniform data systems Cover all recipients of federal funds related to housing or urban development Requires AFFIRMATIVELY furthering fair housing, not just nondiscrimination Stated Goals of New Policy Improve integrated living patterns and overcoming historic segregation; Reduce racial and ethnic concentrations of poverty; Reduce disparities by race, color, religion, sex, familial status, national origin or disability in access to education, transit and employment and reducing health hazards; and Respond to disproportionate housing needs by protected class Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project The Court built on its employment discrimination cases Griggs v. Duke Power Co., 401 U.S. 424 (1971) and Smith v. City of Jackson, 544 U.S. 228 (2005) the focus is on the effect of the action on the employee not the motivation of the employer. The tie between, the Title VII of the Civil Rights Act, employment discrimination (ADEA) otherwise adversely affect and the Fair Housing Act is the phrase otherwise make unavailable which refers to the consequences of an action rather than the actor s intent. After exploring the 1988 amendments to the FHA, the Court concluded that Congress presupposed disparate impact under the FHA as it had been enacted in Before rejecting a public interest, a court must determine that a plaintiff has shown that there is an available alternative practice that has less disparate impact and serves the entities legitimate interest. Proving the Case the Number Game First you show that the local government s numbers are off this could take years to build a record. Then the local government tells you what the reason is for why the numbers are off. You then have an opportunity or obligation to suggest alternative methods for taking care of the legitimate business needs Consolidated Plan under 24 C.F.R. Part 91, Subpart C. Only recipients of federal housing dollars are required to conduct a Consolidated Plan The Consolidated Plan must take into consideration the impediments to fair housing identified in the Analysis of Impediments the Fair Housing Plan. The Fair Housing Plan must identify steps the jurisdiction will take to address these barriers. Failure to do either will result in an administrative or civil challenge to the jurisdictions ability to receive federal funds. Set Annual Objectives Activities to be Undertaken Outcome Objectives Geographic Distribution of Housing Assistance Annual Goals for Affordable Housing, Public Housing, Homelessness Response to Barriers to Affordable Housing Local Comprehensive Plan Local comprehensive plans must be consistent with the Consolidated Plan if federal funds are sought or used by local governments. A grantee is required to submit a certification that it will affirmatively further fair housing, which means that it will: conduct an analysis to identify impediments to fair housing choice within the jurisdiction; take appropriate actions to overcome the effects of any impediments identified through that analysis; and maintain records reflecting the analysis and actions in this regard

3 Example of Barrier to Affordable Housing Inclusionary zoning new housing developments must offer a portion of the new units at affordable levels for purchase or rent California Building Association v. City of San Jose, S (Cal. Sup. Ct., June 15, 2015) inclusionary zoning is not an exaction there can be no valid unconstitutional conditions takings claim without a government exaction of property, and the ordinance in the present case does not effect an exaction. Rather, the ordinance is an example of a municipality s permissible regulation of land under its broad police power. Id. at 25. Inclusionary zoning is not an example of coercion through conditions imposed upon grant of a permit. The U.S. Supreme Court did not grant cert Compare to Takings Analysis Compare to Nollan and Dolan which required a property owner, as a condition of obtaining a sought after permit, to dedicate a portion of the private property to public use: Nollan public access easement to the beach in exchange for a permit to construct a residence Dolan bike path in exchange for permit to substantially increase the size of existing retail business Outcome of cases essential nexus and rough proportionality How Does Koontz fit in? The California Supreme Court read Koontz v. St. Johns River Water Management District, 570 U.S. (2013) to limit unconstitutional conditions analysis: Nothing in Koontz suggests that the unconstitutional conditions doctrine under Nollan and Dolan would apply where the government simply restricts the use of property without demanding the conveyance of some identifiable protected property interest (a dedication of property or the payment of money) as a condition of approval. It is the governmental requirement that the property owner convey some identifiable property interest that constitutes a so called exaction under the takings clause and that brings the unconstitutional conditions doctrine into play. Land Use Regulations Affect Property Values A municipality could impose a variety of conditions on new residential development to increase affordable housing stock: Specify the number of particular unit types Limitations on density Limitations on number of bedrooms Required setbacks Building height Inclusionary zoning requirements are only one example of regulations to reach housing goals Mhany Mgmt., Inc. v. County of Nassau, (2nd Cir., March 23, 2016) Confirmed the Village of Garden City in Long Island intentionally discriminated under the Fair Housing Act, the United States Constitution, and other civil rights statutes when it enacted an exclusionary zoning ordinance in 2004 in the face of race based opposition to the prospect of affordable housing. [t]he tenor of the discussion at the Village s public hearings and in the community showed that Village residents opposition to fair housing, though not overtly race based, was directed at a potential influx of poor, minority residents. Reversed the district court s dismissal of Nassau County, Long Island from the case, in 2012, before Garden City stood trial. The district court failed to consider the plaintiffs claim that the County was deliberately steering affordable housing to low income, majority minority communities, in violation of Section 804(a) of the Fair Housing Act, the Second Circuit held. Avenue 6E Investments, LLC v. City of Yuma, 818 F.3d 493 (9 th Cir., 2016) 9 th Circuit held there was sufficient evidence to present to a jury that the City had rejected the developer's application for an increase in zoning density for reasons of barely disguised animus toward the expected residents of the new development. Held that issues of disparate treatment and disparate impact under both the 14th Amendment's Equal Protection Clause and the federal Fair Housing Act needed to be tried. There appeared to be no principled opposition to the requested zone change. As the Court of Appeals put it, the record was replete with "code words" and "veiled references" for the Hispanic influx that the neighbors anticipated, turning the development into a "low cost, high crime neighborhood."

4 Enforcement Enforcement may be undertaken administratively or in State or Federal Court. No individual or entity may file a civil rights complaint based upon a violation of the obligation to AFFH. However, where such a claim is the basis for another claim, for example, a False Claims Act claim (Westchester), a successful plaintiff would ordinarily have to establish a violation of the obligation to AFFH. In addition, there is the prospect of HUD joining a successful plaintiff in the prosecution or settlement of the case. Penalties may include loss of federal housing funds or of support of private loans or tax credits. ALL federal funds require a grantee to promise to abide by ALL civil rights laws. A violation of the FHA and the obligation to AFFH, may result in the loss of ANY federal money. Westchester Litigation County received $52 million+ in CDBG, HOME, ESG funds from Receipt of funds required repeated AFFH Certifications. Litigation brought under the False Claims Act: AFFH certifications were false because County did not consider racebased impediments to fair housing choice Treble Damages Share available to realtor New Federal AFFH Regulations Require: Regional data on numbers and concentrations of economic and social minorities; Review of affordable housing impediments, including barriers to multifamily and increased housing densities; Provisions to maintain existing housing; Review of policies on improvements; and Reasonable accommodations. Look for a Template from HUD to be released in the next few months In the Words of Former Vice President Walter Mondale When high income black families cannot qualify for a prime loan and are steered away from white suburbs, the goals of the Fair Housing Act are not fulfilled, he said. When the federal and state governments will pay to build new suburban highways, streets, sewers, schools and parks, but then allow these communities to exclude affordable housing and nonwhite citizens, the goals of the Fair Housing Act are not fulfilled. When we build most new subsidized housing in poor black or Latino neighborhoods, the goals of the Fair Housing Act are not fulfilled. of segregation.html?_r= Possible Issues Homeless Programs Transportation Planning Allowing Patterns of Intolerance Redevelopment Economic Development Disaster Response Public Services and Facilities Conclusions Additional demands on local governments to go beyond nondiscrimination. New Assessment of Fair Housing focuses on regional assessment of housing needs by protected class status and income and the role of the local jurisdiction in addressing the determinants of fair housing, identify and address historical patterns of segregation and to promote integration. More data on community composition. More commitment to plan for affordable housing and turn those plans into actions. Plan for the equitable distribution of affordable housing across a jurisdiction s geography, not just a focus on numbers. Public and private enforcement, perhaps coupled with civil rights act claims and attorney fee requests

5 Resources Federal Statutes Title 8 of the 1964 Civil Rights Act as amended in U.S.C et. seq. (Fair Housing Act) Executive Order Federal Regulations: 24 C.F.R (a)(2) 24 C.F.R (a). 24 C.F.R. Part 91, Subpart C. Department of Housing and Urban Development Implementation of the Fair Housing Act s Discriminatory Effects Standard, 78 Fed. Reg (Feb. 15, 2013) (to be codified at 24 C.F.R. pt. 100). Cases Arlington Heights v. MHDC, 429 U.S. 252 (1977). Avenue 6E Investments, LLC v. City of Yuma, 818 F.3d 493 (9 th Cir., 2016) California Building Association v. City of San Jose, S (Cal. Sup. Ct., June 15, 2015). Griggs v. Duke Power, 401 US 424 (1971). Resources (Continued) Cases (Continued) Metropolitan Housing Development Corporation v. Arlington Heights ( Arlington Heights ) 429 U.S. 252 (1977). Metropolitan Housing Development Corporation v. Village of Arlington Heights, 558 F.2d 1283 (7 th Cir. 1977). Kennedy Park Homes Assoc. v. Lackawanna, 436 F2d 108 (2 nd Cir.,1970), cert. den. (1971). Koontz v. St. Johns River Water Management District, 570 U.S. (2013). Mt. Holly Gardens Citizens in Action v. Township of Mount Holly, 658 F3d 375 (3 rd Cir. 2010). Magner v. Gallagher, 619 F3d 823 (8 th Cir., 2010). Mhany Mgmt., Inc. v. County of Nassau, (2nd Cir., March 23, 2016) Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, US (2015). United States Anti Discrimination Center of Metro New York v. Westchester County, Slip Copy, 2009 WL (S.D.N.Y.) Additional Resources Websites HUD s Affirmatively Further Fair Housing Rule rule HUD s Settlement Agreement with Westchester County westchester.pdf Letters Among Federal Agencies Joint Statement of the Department of Housing and Urban Development and the U.S. Department of Justice: Joint Letter of the U.S. Department of Housing and Urban Development, the U.S. Department of Education and the U.S. Department of Transportation: releases/ dear colleagues letter.pdf HUD_DOT_EPA Partnership for Sustainable Communities: dot epa partnership sustainable communities HUD U.S. Department of Agriculture MOU: Environmental Justice Program/Proposal Links Draft EJ 2020 Action Agenda (US EPA) Federal Highway Administration Environmental Justice Reference Guide Questions? Jennifer Bragar jbragar@tomasilegal.com