Texas Court Dismisses Disparate Impact Lawsuit

Filed in Legal by on September 14, 2016 0 Comments

statue of justiceA Texas court has dismissed a Fair Housing Act case, saying that the statistics that indicated “disparate impact” aren’t enough to prove that the housing authority’s policies are flawed.

In 2015, the U.S. Supreme Court ruled that under the Fair Housing Act, not only are intentional acts of discrimination unlawful, but unintentional actions that have a disparate impact on protected classes may be unlawful as well.

Texas Dept. of Housing and Community Affairs (TDHCA) v. Inclusive Communities Project (ICP) was the lawsuit that resulted in that decision. The Supreme Court then remanded the case back down to the lower court for further proceedings.

ICP argued that the manner in which the TDHCA allocated its 9% and 4% low-income housing tax credits (LIHTC) had a disparate impact on minorities, mainly African-American families. Specifically, ICP charged that it resulted in more developments being built in low-income, largely minority areas than in high-opportunity, mostly Caucasian areas.

On Aug. 26, the District Court for the Northern District of Texas dismissed the case on remand. Judge Sidney A. Fitzwater (who had earlier ruled that ICP could maintain a disparate impact claim) dismissed ICP’s case.

He said that while the Supreme Court’s decision accepted that disparate impact claims under the Fair Housing Act are a legitimate argument, it also made clear that such claims must be based on a policy, and that simple statistics are not enough to prove discrimination.

In this decision, Judge Fitzwater said that ICP was not attacking a TDHCA policy, but the manner in which it exercised its discretion. Furthermore, he recognized that there may be many reasons that more LIHTC developments were approved in low-income areas (zoning, public sentiment, developer choices, etc.) than in other areas, and therefore ICP’s statistics did not prove that TDHCA caused the racial statistical disparity.

ICP has 30 days to file a notice of appeal to the Fifth Circuit.


Leave a Reply

Your email address will not be published. Required fields are marked *