They argued that the effects of gentrification would disparately displace lower-income Latino and Black residents, and asked the court to void the City’s approvals and enjoin development until the City initiated measures to mitigate the effects of gentrification.DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. tasked with enforcing the FHA. To establish that prima facie case, a plaintiff cannot simply rely on a statistical disparity, but, rather, must “point to a defendant’s policy Since passage of the FHA back in 1968, any number of courts had approved of using “disparate impact” to prove housing discrimination. As the Court explained, “[a]n important and appropriate means of ensuring that disparate-impact liability is properly limited is to give housing authorities and private developers leeway to state and explain the valid interest served by their policies.” According to the Court, “[t]he FHA does not decree a particular vision of urban development; and it does not put housing authorities and private developers in a double bind of liability, subject to suit whether they choose to rejuvenate a city core or to promote new low-income housing in suburban communities.” Rather, “[e]ntrepreneurs must be given latitude to consider market factors,” and zoning officials must be able to account for conditions ranging from traffic patterns to historic architecture. This standard is often used in challenging discrimination in mortgage lending, homeowners’ insurance, exclusionary zoning, redevelopment, and demolition of public housing. Disparate impact occurs when government or certain private actors unjustifiably pursue practices that have a disproportionately harmful effect on communities of color and other groups protected by the FHA. Using a disparate impact theory of liability, Inclusive Communities pointed to statistical evidence that the Department awarded a disproportionately high number of tax credits to projects in predominately minority neighborhoods as compared to projects in predominantly Caucasian neighborhoods. On April 14, 2016 Judge Leon granted the industry's motion to amend the complaint and return the case to his court.However, on June 25, 2015, the Supreme Court upheld the application of disparate impact under the FHA in a surprise five-to-four decision in the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. In its 2015 decision, the Supreme Court upheld the use of a 'disparate impact' theory to establish liability under the Fair Housing Act … Petitioners sued, claiming that the City’s approval of these “upscale” projects created a barrier to fair housing in violation of the FHA and FEHA because the projects would lead to gentrification and drive up rents in the surrounding community.
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