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Supreme Court: Texas housing case could prove pivotal for civil rights

The court will take up the matter of 'disparate bias' in a case that alleges that the Texas Department of Housing and Community Affairs excluded minorities from Dallas suburbs by concentrating its affordable housing in low-income neighborhoods.

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In this April 26, 2014 file photo, people walk on the steps of the Supreme Court in Washington.

Jacquelyn Martin/AP/FILE

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The US Supreme Court announced Thursday that it would decide a dispute over whether a Texas housing authority can be held liable for failing to provide an equal amount of subsidized housing opportunities for low-income residents in more affluent white neighborhoods. 

The Texas Department of Housing and Community Affairs denied that it engaged in deliberate discrimination to exclude minority tenants from suburban areas of Dallas.

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But officials with the Inclusive Communities Project said evidence of intentional discrimination was not the only way to prove illegal discrimination.

The group sued the state agency based, in part, on a different claim: that its effort to focus affordable housing projects in minority neighborhoods was disproportionately denying housing opportunities for low-income tenants in predominantly white neighborhoods. 

Under this claim, if the agency caused a disparate impact on racial minorities, the state housing department could be held liable for violating the Fair Housing Act. A federal judge and a federal appeals court panel agreed.

In his petition to the Supreme Court, Texas Solicitor General Jonathan Mitchell argued that the Fair Housing Act bars discriminatory treatment of minorities, but the law does not address disparate impacts of agency actions.

He is asking the high court to overturn a decision by the Fifth US Circuit Court of Appeals upholding disparate impact lawsuits under the FHA.

The issue is not new at the Supreme Court. Twice before, in 2011 and 2012, the justices agreed to examine whether the FHA authorizes disparate impact lawsuits. 

Civil rights activists and the Obama administration viewed both cases as posing a significant risk to civil rights enforcement should a Supreme Court majority invalidate disparate impact claims. Both cases were settled before the justices could decide the issue, rendering the cases moot.

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Now, with a state agency from conservative Texas as a party in the case, the underlying lawsuit is unlikely to be settled before a decision is reached.

In his brief urging the high court to deny the case, Dallas lawyer Michael Daniel said any ambiguity in the reach in the federal housing discrimination law should be resolved in favor of an Obama administration interpretation of the statute.

The federal Department of Housing and Urban Development enacted a regulation that recognizes disparate impact liability under the FHA, he said. 

The core of the claim against the housing department is that the agency allegedly followed a discriminatory practice of disproportionately allocating federal tax credits for low-income housing in minority areas of Dallas while disproportionately denying such credits in white, non-Hispanic suburbs of Dallas. 

“That practice makes dwellings unavailable in particular areas, thereby perpetuating racial segregation in the Dallas area,” Mr. Daniel wrote in his brief.

He said 92 percent of awarded credits in Dallas were located in areas with more than 50 percent minority residents.

“While creating the same pattern as that brought about by purposeful segregation, [the housing department] significantly increased the scale of the segregation,” Daniel said.

The Inclusive Communities Project, Inc., is a nonprofit group that seeks to end racial segregation in housing. 

In defending its practices, Texas officials argue that the statistical disparity is a reflection of the fact that state and federal laws require the housing department to award tax credits in accord with fixed criteria, including some that correlate with race. 

One such requirement favors giving preference to projects built in low-income areas, the Texas brief said.

Texas Solicitor General Mitchell warned the court that broad enforcement of disparate-impact claims would force landlords, property owners, and government agencies to engage in illegal and unconstitutional racial balancing and the use of racial quotas to fend off potential lawsuits from groups like the Inclusive Communities Project.

“Racial balancing is supposed to be unconstitutional,” Mitchell wrote. “But it appears to be the only way that the State’s housing authority could have avoided disparate-impact liability in this case.”

The case is Texas Department of Housing and Community Affairs v. The Inclusive Communities Project (13-1371).