The impact on land use law nationally still is being assessed from the decision June 25, 2015, by the U. S. Supreme Court in Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc., _____ U.S._____ (No. 13-1371), 135 S.Ct. 2507, 2015 WL 2473449. Will it mean multi-family rezoning under federal duress despite a defense that a community’s comprehensive plan calls for continued single-family zoning of a site in dispute?
The Court, in a 5-4 decision, upheld the application of disparate impact under the Fair Housing Act. And while the Court also recognized significant limitations on the application of this test, the limits clearly are subject to be tested in future lawsuits involving municipal rezoning decisions.
In a disparate impact claim brought under the Fair Housing Act, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations. This is the first time the U.S. Supreme Court has recognized such claims.
Importantly, the Court found as a limitation on such claims that a plaintiff cannot prevail in a disparate impact claim over an offered defense of legitimate business justification if the plaintiff cannot prove that there is an available and feasible alternative practice that has less disparate impact, but meets the business justification.
One area where this type of lawsuit will hit home will be when a plaintiff developer is denied rezoning for multi-family use of subsidized housing of a site zoned for single-family residential use, with the community’s comprehensive plan also showing low-density residential use for the site under the plan’s future land use map.
The obvious defense will be raised that the community’s comprehensive plan, adopted in a non-discriminatory fashion, meets the defense of “business justification” for the denial of rezoning. Will the defense be successful? Stay tuned. The alternative could be the type of damages imposed on the City of Sunnyvale, Texas. http://www.theatlantic.com/business/archive/2015/06/supreme-court-inclusive-communities/396401/