Since the U.S. Supreme Court ruled last summer that the Fair Housing Act prohibits “disparate impact” in housing policies, an open question has remained about when and how often disparate impact would serve as precedent. In his majority opinion, Justice Anthony Kennedy warned courts about the “special dangers” of finding liability for disparate impact under the law.
A federal appellate court has taken that risk. On March 25, the U.S. Court of Appeals for the Ninth Circuit ruled that a zoning decision by the city of Yuma, Arizona, violated the Fair Housing Act. The decision is one of the first to find liability under the disparate-impact reading of the act—and it concerns zoning questions that apply far beyond the boundaries of Yuma.
Two real-estate developers, Avenue 6E Investments and Saguaro Desert Land, brought the case against Yuma after the city refused to rezone land for more density in 2008. The existing low-density residential zoning called for housing lots of 8,000 square feet (R-1-8 zoning). Since the nation was entering a housing crisis, the developers asked the city to lower the requirement to 6,000 square feet (R-1-6 zoning) to make it slightly more dense.
According to the case, the developers claimed that the city denied the zoning request “in response to animus by neighbors of the proposed development who wished to prevent the development of a heavily Hispanic neighborhood adjacent to their subdivisions, in which 75% of the population was White.”
Neighbors expressed their concerns in a public hearing held by the Yuma City Planning and Zoning Commission:
Several homeowners from the [neighborhing] Belleza Subdivision wrote letters or spoke at the hearing objecting that Developers “catered” to low- to moderate-income families. They complained that the people living in “the Hall neighborhoods” tended to have large households, use single-family homes as multi-family dwellings, allow unattended children to roam the streets, own numerous vehicles which they parked in the streets and in their yards, lack pride of ownership, and fail to maintain their residences. These characteristics, Developers allege, coincide with a stereotypical description of Yuma’s Hispanic neighborhoods.
It should be noted that the plaintiffs in this case are both development entities owned by one Yuma family (described in the case as “the Hall Companies”). The Hall family is known in Yuma for developing Hispanic neighborhoods, per background notes to the case.
Yuma’s zoning commission voted unanimously to approve the rezoning, as it was a fairly standard request. The Yuma City Council, however, fielded complaints from homeowners that the rezoning would create “a low-cost, high-crime neighborhood.” One letter submitted by a homeowner to the Yuma City Council reveals the rezoning opponents’ barely disguised racial animus:
We as well as many other families are very aware of the type of ‘homes’ and ‘neighborhoods’ the ‘Hall Construction’ company has built in the past. If any of the council members are unaware of what I am referring to, I urge them to please drive through the many ‘Hall’ neighborhoods in particular the ones with the comparable price and square footage that the Halls have proposed to build next to us. After doing so I ask council members to please ask themselves if they would want to live around these areas after having paid such a significant amount for their home. . . . From my firsthand experience in comparing these Hall subdivisions with our subdivisions particularly Kerley subdivision, it is evident that the Hall subdivision has a higher rate of unattended juveniles roaming the streets, as well as domestic violence, theft, burglaries, and criminal damage/vandalism to properties. It was my experience that many owners of these homes left juveniles unattended as well as many of these homes were not single family dwellings like they were designated to be and instead turned into multifamily dwellings which in turn led to more unattended juveniles and crime. … We find it very disappointing that we have worked very hard to keep our children out of areas like this, as well as worked very hard to come up with the funds in order to buy the home that we live in. Now we are faced with the possibility that once again the Hall Construction company wants to add another one of these ‘subdivisions’ in Yuma.
The developers even offered to create a zoning “buffer” around the border of the development, meaning larger, 8,000-square-foot lots abutting white properties. Incumbent homeowners were not assuaged: The buffer zone might help smooth the lot size, but it wouldn’t do anything in terms of “ownership demographics,” as one resident complained.
In essence, white residents didn’t want the white character of their neighborhood to change. The Yuma City Council sided with them, denying the rezoning request—the first zoning-change rejection in 3 years and in more than 75 requests.
The Hall family development was not necessarily intended to be “affordable,” at least not under the definition set by the U.S. Department for Housing and Urban Development. Despite claims from Yuma homeowners, the rezoning would not bring low-income housing to their neighborhood. Instead, it would make for slightly more affordable homes for residents who were likely to be Hispanic.
Arguably, the absence of low-income housing vouchers makes Avenue 6E Investments v. City of Yuma an even more naked demonstration of disparate impact than Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, the Supreme Court decision that affirmed the disparate-impact reading of the Fair Housing Act.*
The Ninth Circuit remanded the decision back to the district court. The next step for the district court is likely to shake up the composition of at least one neighborhood in Yuma. But it should serve as a broader reminder that affluent, majority-white, incumbent-homeowner neighborhoods that deny zoning changes that would make it easier for less-wealthy minorities to find housing do so at the risk of offending the Constitution.
*CORRECTION: This post initially stated that the City of Yuma case preceded the Inclusive Communities decision. The Ninth Circuit heard the Yuma case in August 2015, after the Supreme Court decision.