Fall 2015 Issue of Horizons

REAL ESTATE

Supreme Court Recognizes Disparate Impact by Bill Gawrych, CPA

T he landmark Fair Housing Act of 1968 was passed to eliminate government and private industry actions that directly cause racial segregation and unequal housing conditions. On June 25, 2015, in a 5-4 majority opinion, the United States Supreme Court determined that, although progress has been made since the passing of the act, conditions still exist that cause problems for families in our country, even if unintentional. The Inclusive Communities Project, Inc. (ICP), a Texas-based nonprofit corporation that assists low-income families to find affordable housing, brought a “disparate impact” claim against the Texas Department of Housing and Community Affairs and its officers.

The claim alleged that they had caused continued segregated housing patterns by allocating too many tax credits to housing in predominantly black neighborhoods and too few in predominantly white neighborhoods. ICP claimed the policy, even if it wasn’t designed to segregate the races, had that effect and was the “functional equivalent” of intentional racial segregation, thus violating the Fair Housing Act. The ruling was clear that such unintentional barriers need to be removed that keep minorities out of predominately white neighborhoods along with local governments addressing the harm of unequal conditions that are caused by this racial segregation.

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