Supreme Court: Fair Housing Act Covers Disparate Impact Discrimination

On June 25, the U.S. Supreme Court ruled that federal fair housing law applies to discrimination claims based on their discriminatory effect on members of protected classes—even if there’s no intent to discriminate.

Known in legal circles as disparate impact liability, it’s a legal theory that prohibits practices that have an adverse impact on members of a protected class, even if there is no intentional discrimination. Though it has been recognized by federal courts across the country for decades, there was widespread concern that it might be overturned by the nation’s high court. Twice before, the Court agreed to take up the matter, but both cases were settled before the Court could issue a ruling.

This time, the Court reviewed a case from Texas, where state officials were accused of violating the federal Fair Housing Act by disproportionately awarding low-income tax credits to developers who built properties in areas with high minority concentrations. A federal court sided with fair housing advocates, ruling that the officials had to change the way they distributed housing resources so that they were spread more uniformly across neighborhoods of various racial makeup. The Supreme Court affirmed, and sent the case back for further proceedings. The name of the case is Texas Department of Housing and Community Affairs v. The Inclusive Communities Project.

For more on disparate impact liability—and what the Court’s ruling might mean for your community—stay tuned for a Special Issue of Fair Housing Coach due out later this summer.