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How Justice Kennedy’s Retirement Could Lead to an Increase in Housing Discrimination

Kennedy was the swing vote on a case that affirmed the Fair Housing Act protects against discrimination, even if it isn't explicit

With Supreme Court Justice Anthony Kennedy retiring, advocates warn fair housing could come under attack. (Photo: Milestone Management/Flickr/cc)

Justice Anthony Kennedy’s retirement has pushed a number of significant issues to the forefront of discussion, since his more right-wing replacement could join the rest of the conservatives on the court to overturn such landmark decisions as Roe v. Wade and Obergefell v. Hodges.

One case of particular importance on which Kennedy provided the swing vote involves curbing discrimination—even if it’s subtle discrimination—in housing policy. 2015’s Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. confirmed that the government can use “disparate impact” as means to prove discrimination in housing, which is how the Fair Housing Act had been interpreted since its inception in 1968. Disparate impact is the idea that discrimination can occur based on race or another protected class even if it’s not explicitly written into policy. For example, even if a policy itself is neutral, if it causes a disproportionate, negative effect on those in a protected class, it is still unlawful discrimination.

Because there’s myriad research that shows that people of color are negatively affected by racial disparities in poverty rates, income, and wealth, the notion of disparate impact is important.

In the 2015 case, the Inclusive Communities Project, a Texas nonprofit, successfully sued the state because the tax credits it provided for low-income housing in Dallas concentrated these developments in low-income, predominantly black neighborhoods. The nonprofit argued that the state was contributing to segregation due to disparate impact. The state countersued on the basis that the Fair Housing Act only protects explicit discrimination.

Had a 5-4 conservative majority sided with Texas, it was possible that the court could have killed disparate impact for good—which would have upended 50 years of precedent. But as he had on a handful of important occasions, Kennedy swung.

Penning the opinion of the court, Kennedy wrote that disparate impact claims are central to the Fair Housing Act. He wrote, “Suits targeting unlawful zoning laws and other housing restrictions that unfairly exclude minorities from certain neighborhoods without sufficient justification are at the heartland of disparate-impact liability.”

In their dissent, the four other conservative justices took a much more limited view of the law, arguing that only intentional, explicit discrimination is unlawful. Justice Samuel Alito, who wrote the dissent, seized on the words “because of” in the Fair Housing Act, which reads that it is against the law to:

refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.

Alito’s dissent devotes several paragraphs to explain the meaning of “because of,” writing, “When English speakers say they did something ‘because of’ a factor, what they mean is that the factor was a reason for what was done.” In other words, real, unlawful discrimination is devoid of subtlety.

Without Kennedy, there’s a chance the court could reduce the Fair Housing Act to Alito’s interpretation, and only target flagrant racism and discrimination, even though so much of discrimination today is successful because it is subtlety embedded in laws and policies.

It’s important to also consider the ramifications of gutting the Fair Housing Act, and the consequences of the subtle discrimination that could ensue. So much of family wealth today is built through homeownership, which people of color in the U.S. could not access for centuries. Even more recent developments helped cement these disparities. While the GI Bill after World War II helped white families buy homes and start lives in the suburbs, black families were generally excluded, since banks wouldn’t grant mortgages in black neighborhoods—and other racist practices kept black families from living in different neighborhoods. And still, facsimiles of redlining continue today.

All this is certainly part of the reason why black and Latino Americans have so much less wealth than white families. In 2017, the median white family had 12 times the wealth of the median black family. And 60 percent of Latino families are liquid-asset poor, which means that they don’t have enough savings to live at the poverty level for three months if they encountered a sudden loss of income, compared to 28 percent of white families. This picture is stark enough, but it’s also getting worse: Median wealth for black and Latino families has been declining over the past three decades. From 1983 to 2013, the median wealth of a black family fell by 75 percent, and the median wealth of a Latino family fell 50 percent. Meanwhile, median white wealth rose 14 percent.

Yet, Secretary Ben Carson’s Department of Housing and Urban Development seems to be on a mission to steer HUD’s focus away from combatting discrimination. HUD has reopened the policy on disparate impact, requesting comment for possible changes. In an interview with CityLab, Jesse Van Tol, CEO of the National Community Reinvestment Coalition, a fair housing group, said, “This new advance notice of proposed rulemaking appears to ask the kinds of questions that you might ask if you were trying to water down a rule. Are there loopholes that should be provided? Is the rule burdensome?”

Carson has also suspended enacting the Obama-era Affirmatively Furthering Fair Housing Rule, which was meant to make mandatory a provision of the 1968 Fair Housing Act that directed agencies to find ways to integrate communities, and which most localities had ignored.

Since those policy changes apparently aren’t sufficient to get across how Carson’s HUD views its role in contesting discriminatory practices, in March someone leaked a HUD proposal that would actually remove the words “discrimination” from the department’s mission statement.

And the Trump administration recently proposed raising rents on the low-income families who receive rental assistance, as well as introducing harsh—and ineffective—work requirements into housing assistance programs.

The future of the Fair Housing Act is just one of many issues that the Kennedy vacancy could bring into the spotlight—for the worse. If the court does eventually rule against disparate impact due to a new Trump pick, there would be one winner: a less-constrained real estate industry.

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Kalena Thomhave

Kalena Thomhave is a writing fellow at the Prospect.

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