Who Are You Going To Believe On Fair Housing, The WSJ Or Congress And The Federal Courts?

Wall Street Journal editorial board member Mary Kissel is misinforming about a new fair-housing case under consideration by the Supreme Court, scaremongering that a decision to uphold half a century of civil rights precedent could force sellers, lenders, and landlords to establish policies that amount to “informal quotas.”

On January 21, the Supreme Court heard oral arguments in Texas Department of Housing v. the Inclusive Communities Project, a fair-housing case that could make it more difficult for victims of discrimination to bring legal challenges against policies that reinforce decades of racial segregation, unintentionally or not. The Inclusive Communities Project argues that the way the Texas Department of Housing administered an affordable-housing plan had a discriminatory effect by entrenching racially segregated housing patterns in the Dallas area. This kind of lawsuit is known as “disparate impact” litigation, which has long been used under various civil rights statutes, including the Fair Housing Act (FHA). It does not require that intentional discrimination be demonstrated, rather that the challenged policies had an unjustified and disproportionate, negative impact on vulnerable groups protected by the FHA. Even though the Department of Housing and Urban Development (HUD) and other fair-housing advocates have successfully relied on disparate-impact litigation for almost 40 years, Texas is arguing that lawsuits under the FHA should newly be required to provide evidence of intentional racial discrimination.

On the January 21 edition of the Journal's WSJ Live video series, Kissel used a hypothetical about the government forcing a bank to make mortgage loans to attack the logic of disparate-impact analysis. Kissel said in this scenario, “Effectively, the government is saying, 'We want informal quotas. You have to lend x to Hispanics, y to blacks, and z to whites.' That doesn't sound constitutional to me.” Kissel then went on to say that the Obama administration had “used this theory to shake down banks for millions of dollars. Let's hope the justices actually read the text of the law”:

Right-wing media have long objected to the use of disparate impact in fair-housing litigation, calling it a “dubious legal theory.” In fact, every one of the 11 federal circuit courts that have considered the question over the last 40 years have reaffirmed that the amelioration of discriminatory effects is a core component of both the intent and text of the FHA, and Congress specifically amended the statute in 1988 in recognition of the fact. Such overwhelming consensus was unsurprising -- the need to begin the slow process of integration after centuries of residential apartheid was specifically designed to be a systematic task, and not a game of Whac-A-Mole aimed at individual bad actors. It was anything but a fringe theory, but rather the product of bipartisan efforts, including those of the Republican HUD chief George Romney in the Nixon administration.

Nevertheless, the attacks on disparate impact continue at the Journal, whose editorials have frequently maligned disparate-impact analysis in the past. 

Housing discrimination has a long history in this country, and can take many forms beyond obvious, intentional discrimination -- so disparate-impact litigation has been a highly effective way for HUD and organizations like the Inclusive Communities Project to remedy discriminatory housing policies that may at first appear neutral, but have the effect of maintaining non-diverse neighborhoods. Far from a “shakedown,” settlements from banks and other lenders have provided significant relief for those who have been illegally discriminated against through predatory lending, redlining, or other questionable practices. 

Disparate impact remedies are not unconstitutional racial quotas, informal or otherwise, as Kissel falsely suggested. In fact, as law professor Joseph Fishkin has explained, the entire point of these lawsuits is to replace one race-neutral policy with another that does not have an unjustified discriminatory effect, a result that will benefit whites who need affordable housing just as it does families of color. As Stacy Seicshnaydre, a law professor who specializes in fair housing and anti-discrimination law, added in regards to the case at hand, the Inclusive Communities Project “promotes integration as a core purpose of the FHA; it does not assault the Constitution”:

The remedy does not create racial preferences, set-asides, or quotas. It does not classify housing recipients by race, distribute benefits based on race, disqualify neighborhoods based on race, or mandate racial balancing. The remedy facilitates upward economic mobility for low-income housing consumers within a market economy. Expanding affordable housing choices outside of high-poverty areas is a race-neutral action that can help reverse racial segregation.

Disparate impact remedies in other FHA cases similarly increase access to housing opportunities without using racial preferences. Housing options expand when owners of rental property fine-tune their standards to avoid the unnecessary exclusion of families or disabled persons. Rental markets are opened for all when zoning authorities reverse unjustified bans on multi-family housing. All consumers benefit when mortgage lenders fine-tune the criteria they apply to determine who will build intergenerational wealth to ensure that the criteria actually measure credit risk. The FHA is concerned with inclusion, and inclusion is not a zero-sum game.

Kissel should also be happy to learn that the justices “actually read the text of the law” prior to oral arguments -- but conservative Justice Antonin Scalia expressed some skepticism toward Texas' (and Kissel's) argument against disparate-impact analysis. As SCOTUSblog's Lyle Denniston reported, “Justice Scalia, it seemed, was on both sides of that issue, reflecting a clear division across the bench”:

[Texas Solicitor General Scott] Keller very likely was not prepared -- and perhaps few in the audience were -- for Justice Scalia, who calmly laid out a scenario that would “kill” the state's case against a “disparate impact” remedy. “What hangs me up,” Scalia said, is that Congress in 1988 made some changes in the twenty-year-old law that showed it was fully aware that such a remedy was well-established.

“We look at the entire law,” Scalia continued. “We have to make sense of the law as a whole.” Noting that, up to the time that Congress added to the law in 1988, every federal appeals court had endorsed the broader reading of the law, Scalia said it would be “very strange” if Congress passed those amendments just to prevent courts from reaching that result.

In fact, Scalia's observation that disparate impact has long been written into both civil rights statutes and case law has not prevented him from upholding this type of litigation, despite the purported “constitutional problem” that Kissel promoted -- the “colorblind” myth that recognizing race is itself constitutionally suspect. As Scalia wrote in a 2010 case upholding the disparate impact provisions of Title VII of the Civil Rights Act, “it is not our task to assess the consequences of each approach and adopt the one that produces the least mischief. Our charge is to give effect to the law Congress enacted. ... If that effect was unintended, it is a problem for Congress, not one that federal courts can fix.”