Supreme Court’s Landmark Disparate-Impact Ruling

Good Afternoon.  Last Thursday the Supreme Court issued a landmark ruling regarding the Fair Housing Act.  I wanted to share this news, but knew it should come from a true expert in the field of fair housing.  I asked friend and colleague, Ron Leshnower to write a piece about the importance of this ruling.  He is who I turn to whenever I scratch my head over a fair housing issue.  You will find his article to be a good read.

Fair Housing Advice for Landlords and Property Managers Following the Supreme Court’s Landmark Disparate-Impact Ruling

It’s not every day that the Fair Housing Act (FHA) captures top national headlines. But this Thursday was such a day. A split U.S. Supreme Court announced its 5-4 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. that “disparate-impact” claims are cognizable under the FHA, meaning that parties can be found liable for discrimination even if they didn’t intend to discriminate.

The thought that it’s possible to be held liable for something you didn’t mean to do is certainly unsettling. But this ruling shouldn’t give landlords and property managers any reason to panic. Consider the following:

  • The ruling doesn’t open up a new avenue for fair housing liability. The Court only recognized the legal viability of disparate-impact claims, which have been around for decades and affirmed by several appellate courts.
  • Disparate-impact claims aren’t common with day-to-day property management. Disparate impact is of greater concern to insurers, lenders, developers, and certain governmental entities, which are more likely to institute regional policies that could arguably have a disparate impact on different populations. For example, the disparate-impact claim at issue in the Supreme Court ruling involved a claim that the Texas Department of Housing and Community Affairs was perpetuating a segregated housing pattern by allocating too many low-income housing tax credits in predominantly black inner-city areas and too few tax credits in predominantly white suburban neighborhoods.
  • Although the Court held that disparate-impact claims are legally valid, the Court also made it clear that it should not be easy for plaintiffs to prevail upon such claims. Writing for the majority, Justice Kennedy spent much of his opinion emphasizing the importance of maintaining significant limitations and safeguards to prevent constitutional problems and “protect potential defendants against abusive disparate-impact claims.” The Court’s ruling may even prove to conflict with recent U.S. Department of Housing and Urban Development (HUD) rules concerning the implementation of the FHA’s discriminatory effects standard (see “Implementation of the Fair Housing Act’s Discriminatory Effects Standard,” 78 Fed. Reg. 11460 (February 15, 2013)).

What, then, should landlords and property managers do in light of this Supreme Court ruling? Make a renewed commitment to learning about fair housing. While this recent ruling focused on disparate-impact claims, it also shined a spotlight on the bigger picture of fair housing compliance. The ruling should serve as a reminder that landlords and property managers do need to be concerned about “disparate-treatment” claims that, unlike disparate-impact claims, are more likely to arise when dealing with tenants. For example, many landlords practice forms of steering, make assumptions based on tenants’ disabilities, single out families with children, or hold female tenants to a different standard without realizing that these actions may amount to illegal discrimination under the FHA.

Let this ruling inspire you to get up to speed on fair housing compliance and be proactive when it comes to understanding your responsibilities under federal, state, and local fair housing laws. It’s the best strategy for screening tenants and managing your properties with confidence.

Ron Leshnower is an attorney, fair housing trainer, and the author of the book, “Fair Housing Helper for Apartment Professionals.” You can learn more by visiting www.fairhousinghelper.com and follow him on Twitter at www.twitter.com/fairhousing.

2 Responses to “Supreme Court’s Landmark Disparate-Impact Ruling”

  1. Affirmatively Furthering Fair Housing | Liz Bramlet's Blog Says:

    […] Ron Leshnower will be blogging on the new rule in this space in the near future.  I know that he can help us to understand what this rule means to us and the affordable housing industry.  You can read Ron’s article on the recent Supreme Court ruling regarding disparate impact under the Fair Housing Act at Supreme Court. […]

  2. Ron Leshnower on Affirmatively Furthering Fair Housing | Liz Bramlet's Blog Says:

    […] ink had barely dried on the Supreme Court’s landmark disparate-impact decision when the Fair Housing Act (FHA) was thrust back into the national spotlight on Wednesday. This […]

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