Posts Tagged ‘fair housing’

“Stop calling it fair housing…”

…There’s nothing fair about it. I’ve got a post at Cato about yesterday’s important Supreme Court victory for the Left in which Justice Anthony Kennedy joined the four liberals to hold that current federal law allows housing suits based on “disparate impact” theories. I explain why pundits are being silly when they claim that the Court “saved” the Fair Housing Act or that a contrary ruling would have “gutted” it, and why Samuel Alito and Clarence Thomas were right in their dissents to spotlight the shaky basis of the theory in the statutory text, going back to the original disparate-impact case, Griggs v. Duke Power.

True, Kennedy did throw a sop or two about how courts applying disparate impact need to avoid pressuring actors toward the potentially unconstitutional result of quotas. Although some consider these bits of wording significant, I suspect that will mean about as much as similar sops that the Court has thrown over the years about avoiding quotas in employment and education, i.e., not much. Others, such as Cory Andrews of WLF, point to Kennedy language suggesting (on what statutory basis is not entirely clear) that disparate impact scrutiny might be limited to “artificial, arbitrary, and unnecessary” practices, a narrowness of approach not seen in other disparate-impact contexts. How administrable such a standard might prove, or how much litigation will be needed before it is clarified, is anyone’s guess.

Some further background on Texas Department of Housing and Community Affairs v. Inclusive Communities Project: SCOTUSBlog, Cato’s brief in the case and earlier coverage by Ilya Shapiro and company here and here, and my podcast.

The rest of the Supreme Court’s term

With three decision days remaining — today, tomorrow, and next Monday — Ilya Shapiro outlines the remaining seven cases and their importance, including Texas Dept. of Housing v. Inclusive Communities Project (are defendants liable under “disparate impact” theories in housing discrimination law?) and King v. Burwell (interpreting Congress’s language on Obamacare subsidies).

Update: Both of those cases were decided this morning. In King v. Burwell, the Court broke 6-3 for the administration to uphold the IRS’s rewrite of ObamaCare subsidies. The Court keeps on hand a supply of what one observer called Get Out Of Bad Drafting Free cards, but as Justice Scalia noted in his “SCOTUScare” dissent, awards them only for certain laws. And the housing case was a big win for the left as Justice Anthony Kennedy joined the four liberals to uphold housing suits based on “disparate impact” theories. His opinion throws a sop or two about how disparate impact shouldn’t imply quotas, which I suspect will mean about as much as similar sops the Court has thrown over the years in employment and education, i.e., not much. (P.S. As one reader rightly objects, the problem in Burwell wasn’t so much bad drafting as drafting that failed of its intended coercive effect and therefore needed to be revised if there was to be a Plan B. More on King v. Burwell: Roger Pilon and Ilya Shapiro at Cato)

June 17 roundup

  • Skull and crossbones to follow: San Francisco pols decree health warnings on soft drink, Frappuccino billboards [Steve Chapman]
  • Judge criticizes feds’ punitive handling of AIG rescue as unlawful, but says no damages are owed to Hank Greenberg [Bloomberg, Thaya Knight/Cato, Gideon Kanner who predicted outcome, W$J]
  • Congress resisting Obama/HUD scheme to force communities to build low-income housing [Jonathan Nelson/Economics21, Marc Thiessen]
  • California, following New York, proposes 50 hours of mandatory pro bono work for prospective lawyers [John McGinnis]
  • Five part Renee Lettow Lerner series on historical role and present-day decay of juries [Volokh Conspiracy, introduction, parts one, two, three, four, five] Related: Mike Rappaport and follow-up on Seventh Amendment, Liberty and Law.
  • Latest Scotland drunk-driving blood threshold: Drivers “warned that having ‘no alcohol at all’ is the only way to ensure they stay within the limit” [Independent via Christopher Snowdon]
  • How not to argue for bail reform: Scott Greenfield vs. NYT op-ed writer [Simple Justice]

Judge rules against housing disparate impact theory

The Obama Administration has repeatedly dodged cases in fear of judicial review of its controversial application of the disparate impact theory to mortgage lending and other aspects of the housing market, but its position has now met with a stiff rebuke from district court judge Richard Leon [Insurance Journal]:

“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Leon wrote.

He called the rule “nothing less than an artful misinterpretation of Congress’s intent that is, frankly, too clever by half.”

Banking and finance roundup

Dept. of unexpected findings, discrimination law division

“Study results in jurisdictions with state-level protections against housing discrimination on the basis of sexual orientation unexpectedly show slightly more adverse treatment of same-sex couples than results in jurisdictions without such protections.” [Samantha Friedman et al., “An Estimate of Housing Discrimination Against Same-Sex Couples,” SSRN]

Critics: unlawful for real estate websites to provide demographic data

A popular feature of many real estate websites is the ability to search for neighborhood- and town-level statistics on crime, rated school quality, income, age, concentration of school-age children, and a host of other demographic variables. Now the National Fair Housing Alliance, the busy group that has extracted tens of millions of dollars from other businesses through complaints and litigation, says it is considering complaints against sites that offer search for information related to forbidden fair housing categories (race, national origin, family structure, and others) and either offer real estate for sale or refer business to real estate agencies. Site operators object that the offending information typically comes from the U.S. Census Bureau itself and that consumers could still obtain such information online, if a bit less conveniently, even if real estate sites stopped offering it. [Kenneth Harney, Washington Post/syndicated]

House blocks funding for HUD local power grab

We’ve tracked (especially by way of the Westchester County, N.Y. controversy) the ambitious efforts of the federal Department of Housing and Urban Development to grab more control over local governments’ zoning and project building decisions, in part through a proposed new “AFFH” rule (Affirmatively Furthering Fair Housing). Now the House has voted an appropriations rider cutting off funds for implementation of the new rule. [sponsor Rep. Paul Gosar (R-Ariz.), Paul Mirengoff/PowerLine, Sara Rankin/Legislation Prof (opposed), National Low-Income Housing Coalition, earlier on AFFH and on housing discrimination law generally]

Maryland roundup

“We wouldn’t file a complaint against someone who doesn’t have liability”

A group called the National Fair Housing Alliance has taken the lead in levying sensational bias charges against mortgage lenders, claiming that neglect of REO (real-estate-owned) properties following foreclosure has followed racially discriminatory patterns. It helped negotiate the extraction of $42 million from Wells Fargo, and is pursuing tens of millions in claims against Bank of America and other lenders. NFHA’s claims have routinely been given unskeptical circulation in the press, but now an investigation by Kate Berry and Jeff Horwitz in the American Banker is bringing overdue scrutiny:

The group has disclosed addresses for only a fraction of the properties it alleges the banks have neglected, but a review of those it has released indicates that NFHA regularly misidentified the institution legally responsible for maintaining specific homes. In some cases, it conflated the banks responsible for maintaining properties with those that were simply serving as trustees for mortgage-bond investors. In others, it faulted banks for damage that occurred before they took possession of properties.

Not in dispute is the leverage the NFHA has gained in its dealings with banks from its close ties to supporters in the federal government. Unusual among Washington agencies, the Department of Housing and Urban Development both funds housing discrimination investigations by nonprofits, including by the NFHA, and provides the venue for them to negotiate their claims.

Grants from HUD and Fannie Mae helped get the NFHA and its leader, Shanna Smith, into the profitable business of investigations in the first place. Banks complain without success about Smith’s practice of demanding a deal while withholding the actual identities and addresses of the properties said to be suffering from bank neglect. Now the HUD-brokered Wells Fargo settlement has paid off richly with $30 million+ for the NFHA and its affiliates, the better with which to stir up more complaints. And watch the revolving door spin, amid few qualms arising from conflicts of interest: “Sara Pratt, the HUD official responsible for investigating and resolving the NFHA’s complaints, and who oversaw its settlement with Wells Fargo, is a former NFHA staffer and consultant.” (cross-posted at Cato at Liberty).