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. e du/thir dc ir c uit_2011/4291 PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

_____________

No. 11

- 1159

_____________

MT. HOLLY GARDENS CITIZENS IN ACTION, INC., a

New Jersey non

- profit corporation; PEDRO AROCHO; REYNALDO AROCHO; ANA AROCHO; CHRISTINE BARNES; BERNI CE CAGLE; LEON CALHOUN; GEORGE CHAMBERS; DOROTHY CHAMBERS; SANTOS CRUZ; ELIDA ECHEVARIA; NORMAN HARRIS; MATTIE HOWELL; NANCY LOPEZ; VINCENT MUNOZ; ELMIRA NIXON; LEONARDO PAGAN; ROSEMARY ROBERTS; WILLIAM ROBERTS; EFRAIM ROMERO; HENRY SIMONS; JOYCE STARLING; TAISHA TIRADO; VIVIAN BROOKS; ANGELO NIEVES;

DOLORES NIXON; ROBERT TIGAR; JAMES POTTER;
RADAMES TORRES

- BURGOS; LILLIAN TORRES

MORENO; DAGMAR VICENTE; CHARLIE MAE WILSON; LEONA WRIGHT; MARIA AROCHO; PHYLLIS SINGLETON; FLAVIO TOBAR; MARLENE TOBAR; SHEILA WA RTHEN; ALADIA WARTHEN, Appellants

,

v.

TOWNSHIP OF MOUNT HOLLY, a municipal corporation of the State of New Jersey; TOWNSHIP COUNCIL OF TOWNSHIP OF MOUNT HOLLY, as governing body of the2 Township of Mount Holly; KATHLEEN HOFFMAN, as

Township Manager of the Township of Mount Holly; KEATING URBAN PARTNERS L.L.C., a company doing

business in New Jersey; TRIAD ASSOCIATES, INC., a

corporation doing business in New Jersey; JULES K. THIESSEN, as Mayor of the Township of Mount Holly

.

_____________
On Appeal from t he United States District Court for the District of New Jersey (D.C. Civil Action No. 1:08

- 02584) District Judge: The Honorable Noel L. Hillman

_____________
Argued July 14 , 2011

_____________

Before: SLOVITER, FUENTES

, and FISHER, Circuit Judges

(Opini on Filed: September 13, 2011 )

Olga D. Pomar, Esq. (Argued) South Jersey Legal Services, Inc.
745 Market Street Camden, NJ 08102

Susan Ann Silverstein, Esq. AARP Foundation Litigation 601 E Street, NW Washington, DC 20049

William R. Potter, Esq.3 Potter & Dickson
194 Nassau Street Princeton, NJ 08542

Counsel for Appellants

M. James Maley, Jr., Esq. (Argued) Emily K. Givens, Esq. Erin E. Simone, Esq. M. Michael Maley, Esq. Maley & Associates, P.C.
931 Haddon Avenue Collingswood, NJ , 08108

Counsel for A ppellees, Township of Mount Holly, Township Counsel of Mount Holly, Kathleen Hoffman, and Jules
Thiessen

Gaetano Mercogliano, Esq. Neal A. Thakkar, Esq. Sweeney & Sheehan, P.C. 216 Haddon Avenue, Suite 500 Westmont, NJ 08108

Counsel for Appellee, Triad A ssociates, Inc.

William J. DeSantis, Esq. Ballard Spahr
210 Lake Drive East Cherry Hill, NJ 08002

Counsel for Appellee, Keating Urban Partners, L.L.C.4 Thomas E. Perez, Esq. Dennis J. Dimsey, Esq. April J. Anderson, Esq. Department of Justice Civil Rights Division Appellate Section
Ben Franklin Station
P.O. Box 14403 Washington, DC 20044

- 4403

Counsel for Amicus Curiae United States of Am erica

_____________

OPINION OF THE COURT

_____________

FUENTES, Circuit Judge

.

Mount Holly Township (the “Township”) has proposed a redevelopment plan that would eliminate the existing ho mes in its Gardens neighborhood , occupied predomina nt ly by low

- i ncome residents, and replace them
with significantly more expensive housing units

. Appellants, an association of Gardens residents organized under the name Mt. Holly Gardens Citizens in Action, and 23 current and former residents of the neighborhood (coll ectively the “Residents”) filed suit against the Township alleging
violations of various anti

- discrimination laws.

Before the Township filed an Answer or discovery on these allegations had taken place, the District Court granted summary judgment to the Township. Because t he District5 Court misapplied the standard for deciding whether the
Residents could establish a prima facie case under Title VIII
and because it did not draw all reasonable inferences in the
Residents’ favor , we will reverse

.

I. 1

The homes in this dispute are located in a 30

- acre neighborhood called the Gardens in the Township of Mount Holly in Burlington County, New Jersey

. The Gardens is the only neighborhood in the Township comprised predominantly
of African

- American and Hispanic r esidents. It is poor

— almost all of its residents earn less than 80% of the area’s
median income ; with most earning much less

.

The 32 9 2

1 Because this is an appeal from a motion granting summary judgment, we examine the record evidence in the light most favorable to the non

- moving parties, here the Residents, while resolving all reasonable inferences in their
favor. Wishkin v. Potter , 476 F.3d 180, 184 (3d C ir. 2007). homes in the G ardens are predominantly

two

- story buildings made out of solid brick. Built in the 1950s, the homes ar e attached in rows of 8 to 10 and are set
back from the curving streets to allow for front and back yards

, with alleys running behind each housing block

. Two major commercial districts abut opposite sides of the neighborhood, which is only a mile away fro m the major

2 The record inconsistently describes the number of homes as 327 or 329. (JA 61, 776, 1114).6 downtown business district. Until 2004, the neighborhood was also home to a playground and a community center.

The 2000 census provides a snapshot of the neighborhood. 3 According to that data, the Gardens neighborhood was split evenly betwee n rent al properties (with a median rental price of $705 per month) and
homeowners (the median cost of homeownership was $969 per month). Eighty

- one percent of the homeowners had lived in their homes for at least 9 years; 72% of renters had lived
there for at least five years. Of the 1,031 4 residents living in the neighborhood, 203, or 19.7%, were non

- Hispanic Whites; 475, or 46.1% were African

- Americans; an d 297, or 28.8% were Hispanic , the highest concentration of minority residents within Mt. Holly

. Al most all of these residents were classified as “low income”; indeed, most were classified as having “very low” or “extremely low” incomes.

3 The parties dispute the utility of data from the 2000 census. However, none of the parties has briefed or even asked the question of when precise ly the violations at issue in this case began. This issue is important because the redevelopment process began in 2002 and, as a result, the demographics of the township have changed. Disputes over which census numbers to use thus create a moving target; however, the 2000 census data appears to provide the most accurate demographic data at the inception of the redevelopment process.

4 This is an approximate number provided by the Residents’ expert. Elsewhere in the record, the neighborhood
is describe d as home to 1,605 people. (JA 1114).7 The neighborhood was not perfect. For one, it was
crowded

. This created a parking shortage, which led
residents to pave their backyards for use as driveways, which, in turn, led to drainage problems. In addition , the fact that the homes were owned in fee simple meant there was no one with a vested interest in maintaining common spaces, such as the alleys. Some of th e owners were nothing more than absentee landlords, renting to individuals with little interest in maintaining the properties. Over the years, many of the properties fell into disrepair. Vacant properties were boarded

up, some yards filled with rubbish, and parts of the area became blighted

. Because the houses were connected to one another, the dilapidation of one house could and sometimes
did lead to the d ecay of the adjoining houses. Finally, the dense population, narrow streets, and vacant properties facilitated crime. In 1999, 28% of crimes in the Township occurred in the Gardens, even though that neighborhood covers only 1.5% of the Township’s land area.

These many problems were not ignored. L ocal community activists and business leaders worked t o revitalize
the Gardens through a private initiative that eventually came to be known as “Mt. Holly 2000.” This community endeavor sought to reverse the neighbor hood’s decline by rehabilit ating properties and increasing social services. Despite sporadic
achievements

— ten homes were renovated and a community policing center was established

— the neighborhood’s problems continued.

In the year 2000, the Township commissioned a study to determine whether the Gardens should be designated as an
“area in need of redevelopment” under New Jersey’s redevelopment laws

. The resulting rep ort, issued on8 November 8, 2000 concluded that the area offered a “significant opportunity for redevelopment” because of blight, excess land coverage, poor land use, and excess crime. (JA 699). That same year, the Township began to acquire properties in the Gardens. Those properties were left vacant.

A series of redevelopment plans followed . In 2003, the Township issued the Gardens Area Redevelopment Plan (“GARP”). This plan calle d for the demolition of all of the homes in the neighborhood and the permanent or temporary relocation of all of its residents. In their place, the plan provided for the construction of 180 new market

- rate housing
units

, thirty of which would be available only to senior
citizens. The plan was changed in 2005 to include a parcel of
land im mediately north of the Gardens. This plan, the West Rancocas Redevelopment Plan, also called for the destruction
of most of the original Gardens homes, to be replaced wit h 228 new residential units composed of two

- family dwellings and townhouses. Unlike the GARP, the West Rancoca s plan provided for the optional rehabilitation of some of the original
Gardens homes and allowed for the residents of those
rehabilitated units to be temporarily relocated in phases so that they could remain in the neighborhood. The West Rancocas plan also contemplated that 10% of the 228 units would be designated as affordable housing. Finally, in 2008, the plan was changed again. This time, t he Revised West Rancocas Redevelopment Plan called for construction of up to 520 houses, 75% of which could be townhouses and 50% of which could be apartments. The revised plan called for only 56 deed

- restricted affordable housing units , 11 of which
would be offered on a priority basis to existing Gardens
residents

. This revised plan did not include any rehabilitation of existing units.9 At each stage of the process, many Gardens residents objected to the redevelopment, complaining about the
destruction o f their neighborhood and expressing fear that they would not be able to afford to live anywhere else in the Township. One resident complained that the house next to hers was torn down and that a bulldozer had hit her home, tearing the wall, cracking the c eiling, and shifting her roof. (JA 577

- 78, 1001) . Another resident, a 70

- year

- old disabled homeowner, told the Township’s Planning Board that, were he displaced, he would be unable to work and unable to afford a new home. (JA 1002). At one meeting in 2 005, a planning expert testified that the West Rancocas plan was deficient because it only allo wed rehabilitation as an option, without requiring or even encouraging it. He also said that
90% of the Gardens’ existing residents would not be able to
afford the newly

- constructed homes and complained that the plan did not provide an estimate of affordable housing in the existing market for displaced residents. (JA 990, 1117).

Despite these complaints , work on the development
continued. In February 2006 Keat ing Urban Partners, LLC

, was chosen as the plan developer. Keating, in turn, hired Triad to develop a relocation plan. That plan, the Workable Relocation Assistance Plan (“WRAP”), was submitted to the New Jersey Department of Community Affairs on Septemb er 28, 2006 and provided that all residents living in the Gardens on August 1, 2006 would receive relocation assistance. Qualified homeowners would receive $15,000 and a $20,000

no

- interest loan to assist in the purchase of a replacement
home. The Townsh ip offered to buy homes for between10 $32,000 and $49,000. 5 The estimated cost of a new home in the development was between $200,000 and $275,000 , well outside the range of affordability for a significant portion of
the African

- American and Hispanic residen ts of the Township

.

Renters were authorized to receive up to $7,500 of relocation assistance, but were not eligible for relocation
funds to return to the Gardens. In any case, the vast majority
of those renters would be unable to afford the proposed

ma rket

- rate rent of $1, 230 per month. Eventually , the Township paid to relocate 62 families, 42 of which moved outside of Mt. Holly Township. Renters who moved often had to pay more in rent at their new homes.

Although the redevelopment plan called for bu ilding in phases, the Township began to acquire and demolish all of the
homes in the Gardens , thereby displacing many residents and creating conditions that encouraged the remaining residents to
leave

. By August 2008, 75 homes had been destroyed and
148 h omes had been acquired and left vacant. Later that fall, the Township demolished 60 more homes. And

, in the summer of 2009, 50 more homes were knocked down. Residents living amongst the destruction were forced to cope with noise, vibration, dust, and de bris. Worse, the interconnected nature of the houses triggered a cascading array of problems. Uninsulated interior walls were exposed to the outside and covered with unsightly stucco or tar. But these coatings did not extend below grade, allowing moistu re to seep into subterranean crawl spaces, creating an

5 One home sold for $64,000 and another sold for $81,000.11 environment for mold problems . Above, the demolitions opened the roofs of adjoining homes. Those openings were patched with plywood, which was insufficient to stop water leaks. Around the neighborho od, homes bore the scars of demolition: hanging wires and telephone boxes, ragged brick corners, open masonry joints, rough surfaces, irregular plywood patches, and damaged porches, floors and railings.
Destruction of the sidewalks outside demolished hom es further contributed to the disarray by making it difficult to navigate through the neighborhood. B y June 2011, only 70 homes remained under private ownership and the Township was in the process of demolishing 52 properties that it had acquired . These c onditions discouraged any attempt at rehabilitating the neighborhood and encouraged existing residents to sell their homes for less than they otherwise might have been worth.

In Octo ber 2003, Citizens in Action filed a suit in state court alleging viola tions of New Jersey’s redevelopment laws and procedures, and various anti

- discrimination laws. Ultimately, t he New Jersey Superior Court dismissed some
counts and granted summary judgment to the Township on the others , concluding that there was no violati on of New Jersey law, that the area was blighted, and that the anti

discrimination claims were not ripe because the plan had not yet been implemented. The Appellate Division affirmed

, and the New Jersey Supreme Court denied a petition for
certiorari.

The Residents filed suit in the District Court on May 27, 2008, raising the anti

- discrimination claims that had not been ripe in their state suit. The federal complaint alleged, among other things, violations of the F air Housing Act (the12 “F HA ”)

, Title VIII of the Civil Rights Act of 1968; the Civil Rights Act of 1866, as codified at 42 U.S.C. § 1982 6 ; and the Equal Protection Clause of the Fourteenth Amendment to the
United States Constitution

. 7 The Residents asked for declaratory and injunctive relief to sto p the redevelopment plan, as well as damages or compensation that would allow Gardens residents to obtain housing in the Township. The
Residents ’ motion for a preliminary injunction was denied. After they filed an Amended Complaint, the Township, along

w ith the other named defendants, filed motions to dismiss. The District Court converted these into motions for summary judgment and, after allowing the parties time to brief the
motion s , granted summary judgment to the Township
defendants. The District Co urt ruled that there was no prima facie case of discrimination under the FHA and that, even if
there was , the Residents had not shown how an alternative course of action would have had a lesser impact.

The Residents filed a timely appeal and we granted t he Residents’ motion to stay redevelopment pending this appeal

. We have jurisdiction under 28 U.S.C. § 1291.

II.

6 42 U.S.C. § 1982 provides that “[a]ll citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.”

7 Section 1 of the Fourteenth Amendment provides in pertinent part that “[n]o State shall . . . deny to any person within its jurisdiction the equal protection of th e laws.”13 We exercise plenary review over a District Court’s ruling on summary judgment. See Disable d in Action of Pennsylvania v. Se. Pennsylvania Trans p . Auth. , 635 F.3d 87,
92 ( 3d Cir. 2011). “Summary judgment is appropriate only where, drawing all reasonable inferences in favor of the

non moving party, there is no genuine issue as to any material
fact . . . and the moving party is entitled to judg ment as a matter of law.” Id. (quoting Melrose

, Inc. v. City of Pittsburgh , 613 F.3d 380, 387 (3d Cir. 2010) )

.

The FHA makes it unlawful to “refuse to sell or rent . . . or otherwise make unavailable or deny, a dwelling to any person because of race, col or, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(a). A dwelling can be made otherwise unavailable by, among other things, action that limits the availability of affordable housing. See, e.g.

, Huntington Branch, NAACP v. Town of Huntington , 844 F.2d 926, 928

- 29 , 938

- 39 (2d Cir. 1988); Smith v. Town of
Clarkton , 682 F.2d 1055, 1059 , 1062

- 64 (4th Cir. 1982) ; Resident Advisory Bd. v. Rizzo , 564 F.2d 126, 130 (3d Cir. 1977)

. The FHA can be violated by either intentional
discriminatio n or if a practice has a disparate impact on a protected class. Cmty. Serv., Inc. v. Wind Gap Mun. Auth.

, 421 F.3d 170, 176 (3d Cir. 2005).

Disparate impact claims, which do not require proof of discriminatory intent, see Rizzo , 564 F.2d at 147

- 48, per mit
federal law to reach “[c]onduct that has the necessary and foreseeable consequence of perpetuating segregation[, which]
can be as deleterious as purposefully discriminatory conduct in frustrating the national commitment to replace the ghettos by truly integrated and balanced living patterns.” Metro.14 Hous. Dev. Corp. v. Vill. of Arlington Heights , 558 F.2d 1283, 1289

- 90 (7th Cir. 1977). In order to determine whether
action of this sort was “because of race” we look to see if it
had a “ racially discrimi natory effect

, ” i.e., wheth er it disproportionately burdened a particular racial group so as to cause a disparate impact. Rizzo , 564 F.2d at 14 6

- 4 8 ; see also Lapid

- Laurel, LLC v. Zoning Bd. of Adjustment of Twp. of South Plains, 284 F.3d 442, 466

- 67 (3d C ir. 2002) (featuring claims of a disparate impact on handicapped persons in violation of 42 U.S.C. § 3604(f))

. This is called a prima facie
case of discrimination. Rizzo, 564 F.2d at 148 & n.31

. If such a case is established, then we look t o see whether the
defendant has a legitimate, non

- discriminatory reason for its
actions. Id. at 148. If it does, the defendant must then also
establish that “no alternative course of action could be adopted that would enable that interest to be served with less
discr iminatory impact.” Id. at 149. Finally, if the defendant makes this showing, the burden once again shifts to those challenging the action, who must demonstrate that there is a less discriminatory way to advance the defendant ’s legitimate
interest. Id. a t 149 n.37.

A.

When viewed in the light most favorable to the
Residents , the evidence submitted by the Residents was
sufficient to establish a prima facie case. “[N]o single test controls in measuring disparate impact,” but the Residents must offer proof of disproportionate impact, measured in a plausible way. Hallmark Developers, Inc. v. Fulton Cnty.

, 466 F.3d 1276, 1286 (11th Cir. 2006). Typically, “a disparate impact is demonstrated by statistics,” id . at 1286, and a prima facie case may be establishe d where “gross statistical15 disparities can be shown.” Hazleton Sch. Dist. v. United
States , 433 U.S. 299, 307

- 08 (1977). A ccording to the data in the 2000 census conducted before the redevelopment plan began

, 22.54% of African

- American households and 32. 31% of Hispanic households in Mount Holly will be affected by the demolition of the Gardens. The same is true for only
2. 7 3% of White households. In short, the Residents’ statistical expert has calculated that African

- Americans would
be 8 times more like ly to be affected by the project than Whites, and Hispanics would be 11 times more likely to be affected. Furthermore, the 2000 data showed that only 21%
of African

- American and Hispanic households in Burlington County would be able to afford new market

- r ate housing in
the Gardens , compa red to 79% of White households

.

The District Court’s first error was in rejecting the Residents’ statistical submissions, which should have been
taken in the light most favorable to them at this stage in the proceedings

. These statistics , like those presented in Rizzo and other prominent housing discrimination cases , show a disparate impact . In Rizzo , the plaintiffs presented evidence
that , of the 14 ,000

- 15,000 people on a waiting list for public housing, 85% were black and 95% were of a minority background. 564 F.2d at 142. Under these circumstances, we concluded that the cancellation of a public housing project had a “racially disproportionate effect, adverse to Blacks and other minorities in Philadelphia.” Id. Sim ilarly, the plaintiffs
in the Second Circuit case of Huntington Branch used statistics showing that while only 7% of the residents in a town required subsidized affordable housing

, 24% of that
town’s Black residents required such housing, which mean t that Black residents were three times more likely to be affected by a shortage of affordable housing. 844 F.2 d at16 929. And in Keith v. Volpe , the Ninth Circuit concluded that the FHA was violated where a blocked housing project had twice the adverse impact on minorities. 858 F.2d 467, 484 (9th Cir. 1988). The disparate impact here, while not as extreme as the impact in Rizzo , is similar to or great er than the disparate impact found sufficient to establish a prima facie case elsewhere. Under these circumstan ces, the District Court erred in granting summary judgment to the Township.

Further, t he District Court’s challenge to these
statistics in a footnote did not make the appropriate inferences. (JA 15

- 16 n.9). Instead, the District Court challenged the sta tistical analysis underlying the 21% figure of Burlington County minority residents who could afford units the redeveloped Gardens as both too broad, because it
took account of the entire population of Burlington County

, and too narrow because it failed to consider minorities
outside the county who might move in.

In addition, the District Court said the 21% figure did
not take into account the fact that 56 of the units in the Revised West Rancocas Plan would be designated as affordable housing. But the District Court’s analysis failed to take into account the Residents’ evidence that these units, although labeled “affordable,” would be out of reach for
almost all of the Gardens residents.

The District Court also said that the statistics failed to
take into account non

- minority purchase r s who might rent to
minorities . But, unless those purchasers offered below

market rents, this would not affect the inference that the project had a disproportionate effect on Blacks and Hispanics
who would be unable to afford market

- rate units.17 As to the District Court’s concern that the statistics did not take into account minorities who might move elsewher e in Mount Holly, the Residents’ expert opined that affordable housing in the Township was scarce , and that most Gardens
residents would not be able to afford market

- rate units elsewhere in the Township.

Lastly, the District Court erred when it rejected a reasonable inference in favor of the Residents by looking at
the absolute number of African

- American and Hispa nic households in Burlington County that could afford h omes. Instead, the District Court should have looked to see whether
the African

- American and Hispanic residents were disproportionately affected by the redevelopment plan. See Huntington , 844 F.2d at 938 (“By relying on absolute numbers rather than on proportional statistics, the district court significantly underestimated the disproportionate impact of the Town’s policy.”); Hallmark Developers , 466 F.3d at 1286 (“ [I]t may be inappropriate to rely on absolute numbers
rather than on proportional statistics.”) (quoting Huntington

, 844 F.3d at 928.)

. 8

There is another problem. The District Court’s most troubling error is its conflation of the concept of disparate treatment with disparate impact. The D istrict Court essentially agreed with the Township that because 100% of minorities in the Gardens will be treated the same as 100% of

non

- minorities in the Gardens, the Residents failed to prove

8 The Department of Justice filed an amicus curiae brief agreeing that the District Court erred in its disparate impact prima facie case analysis.18 there is a greater adverse impact on minorities. This was in
error. We n eed not simply ask whether the W hite residents at
the Gardens are treated the same as the minor ity residents at the Gardens. The logic behind the FHA is more perceptive than that. It looks beyond such specious concepts of equality
to determi ne whether a person is being deprived of his lawful rights because of his race. Rather, a disparate impact inquiry requires us to ask whether minorities are disproportionately affected by the redevelopment plan. Thus the Residents can
establish a prima f acie case of disparate impact by showing
that minorities are disproportionately burdened by the redevelopment plan or that the redevelopment plan “[ falls ] more harshly” on minorities. Doe v. City of Butler , 892 F.2d 315, 323 (3d Cir. 1989).

The Townsh ip asserts that a disparate impact approach
would result in the unintended consequence of halting the redevelopment of minority neighborhood s and that it is
foreclosed by the Supreme Court’s decision in City of Memphis v. Greene , wh ich states that

[b]eca use urban neighborhoods are so frequently characterized by a common ethnic or racial heritage, a regulation’s adverse impact on a particular neighborhood will often have a disparate effect on an identifiable ethnic or racial group. To regard an inevitable consequence of that kind as a form of stigma so
severe as to violate the Thirteenth Amendment would trivialize the great purp ose of that charter
of freedom.

451 U.S. 100, 128 (1981).19 There are three problems with the Township’s position . First, City of Memphis was concerned with the standard for establishing a violation of the Thirteenth
Amendment ’s ban on the “badges and incidents of slavery in
the United States.” Id. at 12 5

- 2 6. Whatever that standard might be

— a question left open by the Supreme C ourt’s ruling in that case, see id. at 130 (White, J., concurring)

— City of Memphis did not consider the FHA. All of the courts of appeals that have considered the matter, including this one, have concluded that plaintiffs can show the FHA has been
violate d through policies that have a disparate impact on a minority group. See Greater New Orleans Fair Housing
Action Center v. HUD , 639 F.3d 1078, 1085 (D

. C

. Cir. 2011) (acknowledging the majority view but declining to take a position on the matters) ; Simms v . First Gibraltar Bank, 83 F.3d 1546, 1555 (5th Cir. 1996); Mountain Side Mobile Estates P'ship v. HUD, 56 F.3d 1243, 1250

- 51 (10th Cir. 1995) ; Jackson v. Okaloosa County, 21 F.3d 1531, 1543 (11th Cir. 1994) ; Casa Marie, Inc. v. Superior Court of
Puerto Ri co , 988 F.2 d 252, 269 n.20 (1st Cir. 1993) ; Keith,
858 F.2d at 482

- 84; United States v. Starrett City Assocs ., 840 F.2d 1096, 1100 (2d Cir. 1988); Arthur v. City of Toledo, 782 F.2d 565, 57 4

- 7 5 (6th Cir. 1986); Smith , 682 F.2d at 1065;
United States v. Mit chell , 580 F.2d 789, 791

- 92 (5th Cir. 1978); Rizzo, 564 F.2d at 147

- 48; Metro. Hous. Dev. Corp.

, 558 F.2d at 1290; United States v. City of Black Jack , 508 F.2d 1179, 1184 (8th Cir. 1974)

.

Second, the Township’s approach urges us to conclude
that the FHA is violated only when a policy treats each individual minority resident differently from each individual
White resident. Under our precedent, a plaintiff may20 establish a prima facie case of discrimination by demonstrating that the policy disproportionate ly affects or impact s one group more than another

— facially disparate
treatment need not be shown. For instance, in Rizzo , the waiting list for public housing comprised 85% African

American s and 95% minorities , meaning that 5% were White

. 564 F.2d at 142. The White residents on the list were treated the same as the minority residents on the list

— each was hurt by Philadelphia’s decision to block a public housing project

— but we nevertheless found a violation of the FHA
because cancelling the project had a “ racially disproportionate
effect” on African

- Americans. Id. at 149 (“Nor can there be any doubt that the impact of the governmental defendants’ termination of the project was felt primarily by blacks, who make up a substantial proportion of those who woul d be eligible to reside there.”) (emphasis added).

T he Township may be correct that a disparate impact analysis will often allow plaintiffs to make out a prima facie case when a segregated neighborhood is redeveloped in
circumstances where there is a s hortage of alternative affordable housing. But this is a feature of the FHA’s programming, not a bug. The FHA is a broadly remedial statute designed to prevent and remedy invidious
disc rimination on the basis of race, s ee Havens Realty Corp.
v. Coleman

, 455 U.S. 363, 380 (1982), that facilitates its anti

discrimination agenda by encouraging a searching inquiry into the motives behind a contested policy to ensure that it is not improper. See Christine Jolls, Antidiscrimination and
Accommodation , 115 Harv . L. Rev. 642, 652 (2001) (remarking that a “leading gloss” on the Supreme Court’s
decision in Griggs v. Duke Power Co. , 401 U.S. 424 (1971), is that “disparate impact functions as a means of smoking out21 subtle or underlying forms of intentional discrimina tion on the basis of group membership.”)

. We need not be concerned that this approach is too expansive because the establishment
of a prima facie case, by itself, is not enough to establish liability under the FHA. It simply results in a more searching
i nquiry into the defendant’s motivations

— precisely the sort of inquiry required to ensure that the government does not deprive people of housing “because of race.”

Finally , the Township seems to argue that its redevelopment plan does not violate Title VII I unless the
statistics show that it increases segregation in the Township. (Twp. Br. at 18.). Showing that a policy has a segregative effect is one way to establish a violation of Title VIII, but it is not the only way. See Huntington Branch , 844 F.2d at 937 (observing that a policy often discriminates in one of two ways: having a disparate impact or perpetuating segregation). The Township is free to argue that its plan is less discriminatory than all of the available alternatives because it
does the best job of integrating the neighborhood. However, those arguments are properly considered in the context of the last steps of the Title VIII analysis, not as a requirement of
the prima facie case.

In reality, the District Court’s decision was based on a valid and practical concern, which appears to drive its reasoning throughout the opinion. It feared that finding a dispa rate impact here would render the Township powerless to rehabilitate its blighted neighborhoods. This underlying
rationale distorts the focus and analysis of disparate impact cases under the FHA. In disparate impact cases, “[e]ffect, not motivation, is the touchstone because a thoughtless housing practice can be as unfair to minority rights as a willful22 scheme.” Smith v. Anchor Bldg . Corp. , 536 F.2d 231, 233 (8th Cir. 1977). Once the Residents established a prima facie case of disparate impact, the District Court’s inquiry must
continue to determine whether a person is being deprived of his lawful rights because of his race. It mus t ask whether that Township’s legitimate objectives could have been achieved in a less discriminatory way.

B.

Once the plaintiffs establish a prima facie case, the defendants must offer a legitimate reason for their actions. In this case, everyone agrees that alleviating blight is a legitimate interest. The core of the dispute between the parties is over the next step of the FHA’s burden

- shifting analysis: whether the defendants have shown that there is no less discriminatory alternative. Rizzo , 564 F.2 d at 149. Only when the defendants make this showing does the burden shift
back to the plaintiffs

— where it ultimately remains

— to provide evidence of such an alternative. Id. at 149 n. 37. The
test for whether there is no alternative is “similar to the te st of whether the defendant has demonstrated that the requested accommodation is ‘unreasonable’ for the purposes of rebutting a claim under § 3604(f)(3)(B).” Lapid

- Laurel , 284
F.3d at 468

. Section 2604(f)(3)(B) of the FHA requires that reasonable housing accommodations be made for individuals
with disabilities

. In other words, the defendant must show that the alternatives impose an undue hardship under the circumstances of this specific case. See US Airways v.
Barnett , 535 U.S. 391, 401

- 0 2 (2002) (discu ssing the term
“unreasonable accommodation” under the Americans with Disabilities Act)

.23 The District Court characterized the Residents’ proposed alternative as follows:

[E]ffectively, plaintiffs are seeking to remain living in the blighted and unsafe co nditions until they are awarded money damages for their claims and sufficient compensation to secure housing in the local housing market. Although
couched at times like an effort to have the development go up around them, like a highway built around a prot ected tree, or to have their units rehabilitated, this makes little if no practical sense after years of litigation, approved redevelopment plans, and the expenditure of significant public resources. At this late stage, the only real practical remedy is
fo r plaintiffs to receive the fair value for their home as well as proper and non

- discriminatory relocation procedures and benefits

. . . . The relief they are seeking is inconsistent with proving the fourth element of their FHA claim

namely, that an altern ative course of action to
eminent domain and relocation is viable.

(JA 17 n.12) (ellipsis in original)

.

The Residents ’ evidence is susceptible to more
favorable inferences. The Residents are not asking for permission to continue to live in “blighted a nd unsafe” conditions. Instead, they argue that there is a feasible plan that meets the Township’s goals and entails more substantial rehabilitation. Taking the evidence in the light most favorable to the Residents, one could credit the report of the24 Res idents’ planning expert, which stated that the “blighted and unsafe” conditions could be remedied in a far less heavy

handed manner that would not entail the wholesale
destruction and rebuilding of the neighborhood.

The Residents’ expert pointed out tha t, although the Revised West Rancocas Plan called for develop ment in stages, the Township began the development by aggressively acquiring houses, which it left vacant and then destroyed. He opined that a more gradual redevelopment plan would have
allowed existing residents to move elsewhere in the neighborhood during one part of the redevelopment, and then move back once the redevelopment was completed. The Residents’ expert further noted that the Township had not performed a comparative cost analysis sho wing that total demolition, relocation, and new construction was less feasible than an alternative focused on rehabilitation. Indeed, the expert went on to propose an alternative redevelopment plan
that would rely on the targeted acquisition and rehabilit ation of some of the existing Gardens homes, the combination of some houses to make larger homes, an initiative to make the houses more attractive through the use of landscaping and added amenities such as decks and porches, and selective
demolition and ne w construction, including the construction
of more affordable units. The Residents’ expert also p rovided examples of previous alternatives

— including one developed as early as 1989

— to show that the complete demolition of the neighborhood was not the only p ossible solution to blight in
the Gardens. 9

9 The 1989 plan was not provided as the alternative but only to show that less discriminatory alter natives had been considered in the past and could serve as the basis for an Finally, he provided a non

- exhaustive list of25 state and federal funding programs that would support such a redevelopment plan and observed that the Township had
failed to make an active effort to locate a develo per with experience in neighborhood rehabilitation.

The Township provided the contrasting statements of its Township manager, who argued that a rehabilitation program was not economically feasible. In support, she cited the fact that one alternative, th e Mt. Holly 2000 program,
demonstrated that rehabilitation of each unit would be extremely costly. She also challenged the availability of sources of funding for a rehabilitation. Lastly , she emphasized the many problems that led the Township to
declare the Gardens an area in need of redeve lopment and
asserted the belief of the Township Council and its planning board that demolition and replacement is the most effective and efficient approach to solving the neighborhood’s problems.

T hese contrasting stat ements, as well as the parties ’ continued arguments on appeal as to the cost and feasibility of an alternative relying on rehabilitation, create genuine
issues of material fact that require further investigation. Once
the record on alternatives has been m ore fully developed, the District Court may entertain renewed motions for summary judgment, taking into account the Township’s initial burden of showing that there are no less discriminatory alternatives,
as well as the standard advanced in Lapid

- Laurel fo r

updated approach that would lessen the redevelopment’s impact on minority residents of the Township.26 ultimately determining whether an alternative is
unreasonable. 10

III.

The Residents are also seeking to recover under the theory that the Township intentionally discriminated against its minority residents when it adopted the redevelopment plan. The D istrict Court saw no evidence of intentional discrimination and granted the Township’s motion for summary judgment. After carefully considering the matter,
we discern no error in the District Court’s decision and will thus affirm that ruling.

IV.

The Township has broad discretion to implement the policies it believes will improve its residents’ quality of life. But that discretion is bounded by laws like the FHA and by the Constitution, which prevent policies that discriminate on
the basis of race. F or this reason, “the federal courts must

10 Triad asserts that the portion of the District Court’s order relating to its involvement should be affirmed because the Residents, on appeal, have waived their claims against it. We disagree. In their brief, the Residents argue that the redevelopers, which include Triad, provided inadequate relocation assistance, allowed resident s to be improperly pressured to leave, and that the redevelopment plan essentially pushes minority residents out of Mount Holly. For all of the reasons stated in this opinion, these are genuine issues of material fact that must be resolved through further discovery on remand.27 stand prepared to provide ‘such remedies as are necessary to make effective the congressional purpose. ’ ” Rizzo , 564 F.2d
at 149 (quoting J.I. Case Co. v. Borak , 377 U.S. 426, 433 (1964)) . A more developed factual record will assist the District Court in crafting appropriate remedies, if necessary. For all of the foregoing reasons, the District Court’s order granting summary judgment is vacated and the case is remanded for further proceedings.