A Victory for Fair Housing

In a momentous decision for civil rights in this country, the Supreme Court on June 25 upheld the use of the “disparate impact” doctrine under the Fair Housing Act (FHA). This ruling recognizes that policies can be discriminatory (and illegal) even if they seem neutral or if it’s hard to prove they intend to discriminate. The disparate impact doctrine allows people to attack entrenched inequality by showing an unjustified adverse impact on protected groups—for example, African-Americans—rather than the smoking gun required to prove intentional discrimination. This is a vital tool for addressing ongoing barriers to equal opportunity in America.

It is worth noting that the doctrine has been in use for 40 years and recognized by all 11 federal judicial circuit courts that have ruled on it. The case in question here, Texas Department of Housing and Community Affairs v. Inclusive Communities Project, was about whether the state of Texas could concentrate affordable housing in segregated low-income communities of color. Here are four things to note about the decision and disparate impact.

1. The court recognized that unconscious or implicit bias is a form of intentional discrimination. “[D]isparate impact liability under the FHA also plays a role in uncovering discriminatory intent: It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment. In this way disparate-impact liability may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.”

2. The FHA should be used to break down structural barriers to racial integration, not merely to prevent current discrimination. The Court echoes recent articles by Ta-Nehisi Coates and the New York Times editorial board in recognizing that our segregated housing patterns are vestiges of legal segregation, government actions, and private discrimination. Justice Kennedy’s concise history of housing discrimination in the U.S. provides excellent context for why in 1968 it was necessary to enact a federal law that gave people the right to choose where to live regardless of their race. He also notes that the Fair Housing Act was enacted in response to the civil unrest that followed the assassination of Dr. Martin Luther King.

3. Where you live impacts the education you receive, how you are treated by the police, and your access to economic opportunity. The FHA is just as necessary today as it was in 1968. In the wake of Baltimore, Ferguson, and Charleston, it is time to redouble our commitment to make every community in America a community of opportunity. While Justice Kennedy noted that more progress to reduce segregation needs to be made, he also gave a full-throated endorsement of the importance of fair housing by referencing the 1967 report of the National Advisory Commission on Civil Disorders, a.k.a. the Kerner Commission. “The FHA must play an important part in avoiding the Kerner Commission’s grim prophecy that ‘[o]ur Nation is moving toward two societies, one black, one white—separate and unequal.’”

4. The Court’s decision extends beyond segregation to our financial markets. The Obama administration’s Justice Department and the Consumer Financial Protection Bureau have used disparate impact to ensure that mortgage and housing lenders do not discriminate based on race or national origin. They have reached the largest lending discrimination settlements in history and required lenders to change policies that resulted in African-Americans and Latinos receiving more expensive loans than similarly qualified white borrowers. As a result of the Supreme Court’s decision, this valuable tool to ensure fairness in the lending markets remains.

Effective enforcement of the fair housing laws is an essential tool for fostering diverse and inclusive communities where everyone has the opportunity to reach his or her full potential. Thanks to the Court’s decision, disparate impact will still exist, but to make a meaningful difference we will need vigorous enforcement from the federal government and private civil rights organizations. The Open Society Foundations looks forward to working with its partners to make the promise of the Fair Housing Act a reality.