2011 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-13-2011

Mt Holly Gardens Citizens v. Twp Mount Holly

Precedential or Non-Precedential: Precedential

Docket No. 11-1159

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1

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; BERNICE 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 TORRESMORENO; DAGMAR VICENTE; CHARLIE MAE 

WILSON; LEONA WRIGHT; MARIA AROCHO; 

PHYLLIS SINGLETON; FLAVIO TOBAR; MARLENE 

TOBAR; SHEILA WARTHEN; 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 the 
2

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 the 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

(Opinion 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 Appellees, 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 Associates, 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 America

_____________

OPINION OF THE COURT

_____________

FUENTES, Circuit Judge.

Mount Holly Township (the “Township”) has 

proposed a redevelopment plan that would eliminate the 

existing homes in its Gardens neighborhood, occupied 

predominantly by low-income 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 (collectively 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 the District 
5

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 residents. It is poor—

almost all of its residents earn less than 80% of the area’s 

median income; with most earning much less. 

The 3292

 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 Cir. 2007).

homes in the Gardens are predominantly

two-story buildings made out of solid brick. Built in the 

1950s, the homes are 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 from 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 between rental 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 1,0314 residents living in 

the neighborhood, 203, or 19.7%, were non-Hispanic Whites; 

475, or 46.1% were African-Americans; and 297, or 28.8% 

were Hispanic, the highest concentration of minority residents 

within Mt. Holly. Almost 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 precisely 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 described 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 the 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 decay 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. Local 

community activists and business leaders worked to revitalize 

the Gardens through a private initiative that eventually came 

to be known as “Mt. Holly 2000.” This community endeavor

sought to reverse the neighborhood’s decline by rehabilitating 

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 report, issued on 
8

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 called 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 immediately 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 with 

228 new residential units composed of two-family dwellings 

and townhouses. Unlike the GARP, the West Rancocas 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, the 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 of 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 ceiling, 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 2005, a 

planning expert testified that the West Rancocas plan was 

deficient because it only allowed 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 Keating 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 September 

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 Township offered to buy homes for between 
10

$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 residents 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 

market-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 building 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 homes 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 debris. 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 moisture 

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 neighborhood, 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 homes 

further contributed to the disarray by making it difficult to 

navigate through the neighborhood. By 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 conditions 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 October 2003, Citizens in Action filed a suit in state 

court alleging violations of New Jersey’s redevelopment laws 

and procedures, and various anti-discrimination laws. 

Ultimately, the New Jersey Superior Court dismissed some 

counts and granted summary judgment to the Township on 

the others, concluding that there was no violation of New 

Jersey law, that the area was blighted, and that the antidiscrimination 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 Fair Housing Act (the 
12

“FHA”), Title VIII of the Civil Rights Act of 1968; the Civil 

Rights Act of 1866, as codified at 42 U.S.C. § 19826

; and the 

Equal Protection Clause of the Fourteenth Amendment to the 

United States Constitution.

7

 The Residents asked for 

declaratory and injunctive relief to stop 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 

with 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 

motions, granted summary judgment to the Township 

defendants. The District Court 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 the 

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 the laws.”
13

We exercise plenary review over a District Court’s 

ruling on summary judgment. See Disabled in Action of 

Pennsylvania v. Se. Pennsylvania Transp. Auth., 635 F.3d 87, 

92 (3d Cir. 2011). “Summary judgment is appropriate only 

where, drawing all reasonable inferences in favor of the 

nonmoving party, there is no genuine issue as to any material 

fact . . . and the moving party is entitled to judgment 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, color, 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 

discrimination 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, permit 

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 discriminatory effect,” i.e., whether it 

disproportionately burdened a particular racial group so as to 

cause a disparate impact. Rizzo, 564 F.2d at 146-48; see also 

Lapid-Laurel, LLC v. Zoning Bd. of Adjustment of Twp. of 

South Plains, 284 F.3d 442, 466-67 (3d Cir. 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 to 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 

discriminatory 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. at 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 established where “gross statistical 
15

disparities can be shown.” Hazleton Sch. Dist. v. United 

States, 433 U.S. 299, 307-08 (1977). According 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 

2.73% of White households. In short, the Residents’ 

statistical expert has calculated that African-Americans would 

be 8 times more likely 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-rate housing in 

the Gardens, compared 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. Similarly, 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 meant

that Black residents were three times more likely to be 

affected by a shortage of affordable housing. 844 F.2d at 
16

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 greater than 

the disparate impact found sufficient to establish a prima 

facie case elsewhere. Under these circumstances, the District 

Court erred in granting summary judgment to the Township.

Further, the 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 statistical 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 purchasers who might rent to 

minorities. But, unless those purchasers offered belowmarket 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 elsewhere 

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 Hispanic 

households in Burlington County that could afford homes. 

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 District 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 need not simply ask whether the White residents at 

the Gardens are treated the same as the minority residents at 

the Gardens. The logic behind the FHA is more perceptive 

than that. It looks beyond such specious concepts of equality 

to determine 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 facie 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 Township asserts that a disparate impact approach 

would result in the unintended consequence of halting the 

redevelopment of minority neighborhoods and that it is 

foreclosed by the Supreme Court’s decision in City of 

Memphis v. Greene, which states that

[b]ecause 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 purpose 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 125-26. Whatever that standard 

might be—a question left open by the Supreme Court’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 

violated 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 Rico, 988 F.2d 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, 574-75 (6th Cir. 1986); Smith, 682 F.2d at 1065;

United States v. Mitchell, 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 may 
20

establish a prima facie case of discrimination by 

demonstrating that the policy disproportionately affects or 

impacts one group more than another—facially disparate 

treatment need not be shown. For instance, in Rizzo, the 

waiting list for public housing comprised 85% AfricanAmericans 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 would be 

eligible to reside there.”) (emphasis added). 

The 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 shortage 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 

discrimination on the basis of race, see Havens Realty Corp. 

v. Coleman, 455 U.S. 363, 380 (1982), that facilitates its antidiscrimination 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 out 
21

subtle or underlying forms of intentional discrimination 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 

inquiry 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 VIII 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 

disparate 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 willful 
22

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 must 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.2d 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 test 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, 401-02 (2002) (discussing 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 conditions 

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 protected 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 

for 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 claimnamely, that an alternative 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 and 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 the 
24

Residents’ planning expert, which stated that the “blighted 

and unsafe” conditions could be remedied in a far less heavyhanded manner that would not entail the wholesale 

destruction and rebuilding of the neighborhood. 

The Residents’ expert pointed out that, although the 

Revised West Rancocas Plan called for development 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 showing 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 rehabilitation 

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 new construction, including the construction 

of more affordable units. The Residents’ expert also provided 

examples of previous alternatives—including one developed 

as early as 1989—to show that the complete demolition of the 

neighborhood was not the only possible solution to blight in 

the Gardens.9

 9 The 1989 plan was not provided as the alternative but 

only to show that less discriminatory alternatives had been 

considered in the past and could serve as the basis for an 

 Finally, he provided a non-exhaustive list of 
25

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 developer 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, the 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 redevelopment 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.

These contrasting statements, 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 more 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 for 

 

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 District 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. For 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 residents 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.