Fair Housing Advocates vs. Financial Industry on Supreme Court Ruling

It seems like end of session Supreme Court decisions have taken over the news recently, with a few major rulings grabbing the spotlight.  In all the hubbub, it might be easy to overlook Texas Department of Housing and Community Affairs v. Inclusive Communities Projects.  With this case, the Supreme Court ruled on the interpretation of "disparate impact" in regard to the Fair Housing Act (passed in 1968) - a decision with an outcome that may have a significant impact on the housing industry.

"Disparate impact" is defined by the FHA as an allegation that a law or practice has a discriminatory effect on a group of people.  The court ruled 5-4 in recognizing that the effects of "disparate impact" in housing cases, meaning that in the future, statistics and other evidence are permissible in court to show that certain housing practices may have discriminatory effects - without the plaintiff necessarily having to prove that the intentions of the accused were overtly discriminatory.

• Example of disparate impact - say an apartment complex only accepts residents with full-time jobs.  This could have the effect of barring disabled veterans and other people with disabilities who may not be able to work full-time, even though they can afford the apartment.  In this case, the practice is not overtly discriminatory toward the disabled - meaning the apartment complex does not have an official policy of rejecting disabled individuals - but the practice does have the effect of excluding many disabled individuals from residency, creating a disparate impact.

The major question before the Supreme Court was whether the FHA allows people to sue over practices that may not be explicitly discriminatory, but end up hurting minorities or other protected classes disproportionately.  With this decision, SCOTUS has basically said that those who file housing discrimination lawsuits may not necessarily have to prove they were the victims of intentional discrimination.

Jeb Hensarling (Rep.) of the House Financial Services Committee holds that the "... disparate impact will have predictable, negative consequences for all Americans who will experience less competitive and more expensive market for housing and credit - all without providing any meaningful support for the fight against actual discrimination."

The MBA and ABA also oppose the ruling, saying that though lenders and financial companies may have race-neutral policies, they don't always have results that fit into demographic distributions, and shouldn't be penalized for something out of their control.

Fair housing advocates like HUD secretary Julian Castro, the National Community Reinvestment Coalition and ACLU take a different view, believing the ruling was a necessary step forward in the struggle against housing discrimination.  The NCRC says that housing discrimination has evolved into a less blatant problem than it was when the FHA was passed over 40 years ago, and new standards apply.

The financial industry consensus is that the ruling is no good for housing and won't prevent discrimination, while fair housing advocates are touting the ruling as a victory.  Let us know what you think in the comments!