Disparate Impact and the Limits of Local Discretion after <I>Inclusive Communities</I>

Abstract

In upholding the disparate impact theory of liability under the Fair Housing Act (FHA), the Court simultaneously made sweeping pronouncements in favor of residential integration and issued safeguards protecting the legitimate exercise of local discretion in the area of housing policy. Some commentators see these pronouncements as irreconcilable. This Article harmonizes the Court’s competing pronouncements using history, precedent, and the Inclusive Communities opinion itself. The Court eases the tension between federal mandates and local prerogatives by articulating a vision of FHA disparate impact liability as a targeted “barrier removal” mechanism rather than a blunt instrument “displac[ing] valid governmental and private priorities.” As I have explored in earlier work, this is the vision largely implemented by the lower courts for forty years. Justice Kennedy cited this work in acknowledging that “the heartland of disparate-impact suits target[s] artificial barriers to housing.”In particular, the Court’s safeguards address three interrelated concerns implicating how disparate impact theory might curb the legitimate exercise of local discretion and lead to unintended consequences, particularly in the siting of affordable housing. The Court disapproves challenges to racial imbalances alone without identifying policies causing the imbalances; challenges based on second guessing valid local priorities; and “abusive” challenges to legitimate neighborhood revitalization efforts. Justice Kennedy’s opinion does not privilege local government discretion over fair housing objectives. It merely gives local governments running room to tackle the objective in a manner suited to the jurisdiction. Thus, the question is not whether local governments may work to overcome segregation, but how. This concept is reinforced by Justice Kennedy’s use of the term “valid” in referring to the governmental priorities requiring deference. A priority tending to perpetuate segregation and racial isolation cannot possibly be valid, under any construction of the Fair Housing Act text, purpose, regulations, and Inclusive Communities opinion. Moreover, revitalization activities are not immune from challenge if they perpetuate racial isolation and limit housing choices. Strategies consisting solely of placing low-income housing in distressed neighborhoods function as barriers to integration; the remedy for segregation is not more segregation. On the other hand, a city’s revitalization activities are consistent with the FHA if they expand housing choices and ultimately serve as redress for practices that have perpetuated racial isolation. The only principled reading of Justice Kennedy’s opinion, therefore, is that the exercise of local discretion to overcome housing barriers and “mov[e] the Nation toward a more integrated society” is legitimate and entitled to deference. Local discretion used to erect housing barriers and perpetuate racial isolation, even under the auspices of “community revitalization,” is not legitimate and is subject to challenge.