Promoting 'Inclusive Communities': A Modified Approach to Disparate Impact Under the Fair Housing Act

Almost 50 years ago, the passage of the Fair Housing Act (FHA) provided a potential solution to the segregation of American neighborhoods. Congress believed that the FHA’s ban on discriminatory housing practices would lead to more integrated communities. However, as scholars have noted and census data indicates, truly integrated communities have not emerged. Despite the passage of the FHA, one of the primary causes of America’s segregated communities continues to be housing discrimination. One tool for fighting housing discrimination, in addition to the well-established disparate treatment doctrine, is disparate impact theory. Over the past 40 years, though, FHA plaintiffs have had little success with disparate impact claims. Scholars have attributed the theory’s failure to the lack of a clear standard, which is the result of a circuit split over the proper analysis, as well as the theory’s use as a “Plan B” to disparate treatment claims, which very well could be the consequence of disparate impact’s illusory analytical framework. Either way, disparate impact’s failure has contributed to the persistence of housing discrimination.Rather than looking to resolve the circuit split over the proper standard, the Supreme Court appears destined to read disparate impact theory out of the FHA. In the 2014-2015 Term, the Court again picked up the issue of disparate impact’s viability under the FHA in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. And while the ultimate outcome of Inclusive Communities is still unknown, only two results appear likely: Civil rights advocates will succeed in pushing for another settlement, or the Court will finally strike down disparate impact under the FHA. Either way, Congress must act to permanently guarantee the use of disparate impact theory in fair housing by amending the FHA to explicitly include a disparate impact cause of action.This Comment proposes a congressional response to the outcome in Inclusive Communities (whether by way of settlement or Supreme Court opinion) that will statutorily guarantee disparate impact claims within the Fair Housing Act, while also providing a statutorily-mandated “modified burden-shifting” standard for the clear, uniform, and effective adjudication of such claims. The first Part of this Comment defines the disparate impact theory, explains the difference between it and disparate treatment, and traces its history from the employment context to fair housing law. Part II then addresses the current state of the theory under the FHA and proposes a congressional amendment that will guarantee a future for disparate impact claims under the FHA. After acknowledging that disparate impact in its current form is not perfect, Part III identifies the current deficiencies within the FHA disparate impact framework and proposes a solution: a modified burden-shifting standard. It then highlights the strength of this approach over other potential methods for rectifying the issues with disparate impact in the fair housing context and explains how the new standard can be incorporated into an amendment to the FHA. The pervasive racial segregation within today’s American communities — nearly half of a century after the passage of the FHA — is unacceptable. This Comment proposes a solution to the issues and uncertainty surrounding disparate impact under the FHA, and in doing so, aims to provide potential litigants with a tool for eradicating the discriminatory housing practices that further residential segregation.