LANDCASTER, CA - The Supreme Court of the United States is preparing to hear the case of Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, et al. which will consider the theory of disparate impact within the context of the Fair Housing Act.
The “disparate impact” theory considers whether the language of the Fair Housing Act, title VIII unintentionally creates situations of discrimination by use of objective information. The text of the Fair Housing Act, title VIII, 42 U.S.C. § 3601 et. seq., prohibits anyone from refusing “to sell or rent after the making of a bona fide offer or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” Use of objective information by means of tenant screening is meant to provide clear cut data, which is then used as a method for approving or denying an applicant while respecting the rights of those mentioned above.
In a recently submitted Amicus Brief to the Supreme Court, several industry leaders seek to point out that the ramifications of this case will likely extend far beyond the immediate concerns of the case. The amici are companies or associations of companies that provide tenant screening services to a variety of landlords, including individuals, large multifamily apartment complexes, and public housing authorities. Among the amici is Contemporary Information Corporation (CIC), a privately held business that provides tenant and background screening services as well as other public record information to both private landlords and public housing authorities. What CIC and the other amici have submitted for the Supreme Court’s consideration is a detailed explanation of how the Circuit Courts of Appeal have adopted a variety of analytically incompatible tests for determining whether disparate impact exists and how to apply it.
The ratification of FHA disparate impact liability will likely have a negative practical impact on responsible tenant screening and tenant selection as well as property use issues. The congressional silence involved in these matters has lead the Department of Housing and Urban Development (HUD) to adopt a rule that casts a cloud of liability over the foundation of race-neutral tenant selection. In the case of the Township of Mount Holly v. Mount Holly Gardens Citizens, should the court rule in favor of the plaintiff it would create a Hobson’s choice for users of tenant screening during the rental process. Landlords, large multifamily apartment complexes, and housing authorities would be forced to choose between limiting their use of crucial credit and criminal record information, or become liable under the FHA under the theory of disparate impact. Inadvertently this decision changes what has been created to provide objective data in favor of all protected classes to methods based on subjective reasoning.
By the Supreme Court affirming the lower court’s decision, they will engender an onslaught of administrative and private litigation, wreaking havoc on landlords and tenants in communities where objective screening practices have helped to ensure safe, healthy and affordable housing. Tenant screening represents just one of any number of legitimate, race-neutral policies affecting a variety of fundamental and legitimate housing considerations could trigger litigation under this rule – litigation resolved not by the text of the statute, but from whatever a court or administrative agency believes the purposes of the statute to be at any point in time.
The Amicus Brief has already been finalized, and submitted with it being reviewed for use in the case during October. Keep an eye out for updates regarding this case as the decision may have significant ramifications to the way property management rental policies are presently written.
For more information about this case visit: www.scotusblog.com/case-files/cases/mount-holly-v-mt-holly-gardens-citizens-in-action-inc/