Note: We do not seem to see as many Fair Housing Act cases in the Federal circuit courts of the Midwest, so I think it’s helpful to occasionally reach outside the domain of the BLUZ to keep FHA cases on our radar. This summary comes from the American Bar Association’s Media Alerts service.
Mount Holly Gardens Citizens in Action, Inc. v. Township of Mount Holly
(Federal 3rd Circuit Court of Appeals, September 13, 2011)
Mount Holly Township in New Jersey is pursuing a redevelopment plan which demolishes the existing homes in its Gardens neighborhood and replaces them with significantly more expensive housing units. Current and former residents of the Gardens area filed suit against the Township in the United States District Court for the District of New Jersey, arguing that the redevelopment plan violated the Fair Housing Act. The trial judge in the case granted a summary judgment in favor of the Township, holding that the residents’ statistical evidence of discrimination was inadequate and that there was no reasonable alternative to the Township’s redevelopment plan. The residents appealed this ruling to the Third Circuit Court of Appeals.
The Fair Housing Act makes it unlawful to “refuse to sell or rent . . . or otherwise make unavailable or deny, a dwelling to any person because of race… or national origin.” This provision can be violated either by intentional discrimination or by a practice that has a disparate impact on a protected class. Although no single test controls for measuring disparate impact, a disparate impact is often demonstrated by statistics. A dwelling can be made “otherwise unavailable” for purposes of the statute by actions that limit the availability of affordable housing.
The residents asserted that the redevelopment plan had an unlawful disparate impact. Through statistical evidence presented by an expert, they showed that African-Americans would be eight times more likely to be affected by the project than Whites, and Hispanics would be eleven times more likely to be affected, because both African-Americans and Hispanics were disproportionately represented amongst those living at the housing complex being destroyed and because members of neither group would be able to afford the replacement housing being built or any other available housing in the Mount Holly area. The Third Circuit concluded that this evidence, when viewed in the light most favorable to the residents, was sufficient to satisfy the burden of creating a case which was sufficient as an initial matter to proceed to trial.
Nevertheless, even though the plaintiffs were able to establish a prima facie case, the defendant Township could still have escaped liability by offering a legitimate reason for its actions and by showing that there was no less discriminatory alternative to those actions. Here, the Third Circuit concluded that alleviating blight and unsafe living conditions was a legitimate reason for the Township’s action. However, the court also said that the Township had failed to show that there was no less discriminatory alternative to its plan. The residents’ expert argued that a more gradual redevelopment plan would have allowed existing residents to move elsewhere in the neighborhood during each stage of the redevelopment, and then move back once that stage was completed. He also argued that an approach that relied primarily on rehabilitating the existing housing stock instead of demolishing and rebuilding it would have been a practical way to produce housing units that the current residents could have afforded. Because there was an ongoing dispute between the parties as to whether the plaintiff’s proposed approach was a viable one, the Third Circuit concluded that the case should have been allowed to continue for the further development of evidence. Accordingly, the Third Circuit reversed the trial court’s grant of summary judgment for the Township and remanded the case to the lower court for further proceedings.