On June 11, the Township of Mount Holly, N.J., filed a petition for certiorari with the Supreme Court, asking the court to review an earlier decision to determine whether disparate impact claims are cognizable under the Fair Housing Act and, if so, under which test or standard. Disparate impact claims maintain that even if an action is not intended to discriminate, it can still be considered discriminatory if its effect has an "adverse impact" on members of a protected class.
In Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., the Township of Mount Holly created a plan for redeveloping a blighted neighborhood occupied mostly by low- and moderate-income minority households. Residents filed suit against the township, arguing that the redevelopment lacked affordable housing and, therefore, had a disparate impact on minorities and violated the Fair Housing Act.
This case closely mirrors a disparate impact case that the Supreme Court was scheduled to hear earlier this year (Magner v. Gallagher). However, in that earlier case, the city of St. Paul, Minn., withdrew its petition, stating its concern for the potential unintended consequences of a decision in its favor.
On a similar note, last November, HUD published a proposed rule to establish uniform standards for determining when an act can be considered discriminatory based on a disproportionate negative impact on a protected class under the Fair Housing Act. NMHC/NAA submitted comments urging HUD to delay action on the proposed rule until after the Supreme Court ruled in Magner v. Gallagher. It is unclear when HUD will finalize this rule in light of the recent court activity.
NMHC/NAA are closely reviewing the specific details of the Mount Holly case for its impact on the apartment industry and will assess the need to weigh in with an amicus brief.