Supreme Court Justice Anthony Kennedy, who announced his retirement on Wednesday. Damian Dovarganes/AP

The Supreme Court’s swing vote on the 2015 “disparate impact” case shored up the Fair Housing Act.

Justice Anthony Kennedy wrote the most important decision on fair housing in a generation. He’ll almost certainly get to see it overturned in his lifetime.

When Kennedy announced his long-rumored retirement on Wednesday, he shined a spotlight on the tenuous political balance of the U.S. Supreme Court. Famously a swing vote, Kennedy sided with the court’s four liberal justices on defining decisions on reproductive rights, same-sex marriage, the death penalty, and other hot-button social issues.

Any person President Donald Trump picks to replace Kennedy is unlikely to see eye-to-eye with him on these topics. That has stoked fears on the left that the Supreme Court could revisit some of the more contentious decisions delivered during his tenure, including Planned Parenthood v. Casey—or reach back even further to overturn Roe v. Wade.

One of the Supreme Court’s more recent split decisions is already under fire from the Trump administration. In 2015, Kennedy joined Justices Ruth Bader Ginsberg, Sonia Sotomayor, Elena Kagan, and Stephen Breyer in a ruling over “disparate impact,” a legal doctrine that prohibits discrimination even when the explicit intent of a policy is not discriminatory. The 5-4 decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project confirmed that the Fair Housing Act of 1968 bans both explicit discrimination and implicit discrimination.

The case hinged on a rule adopted by the U.S. Department of Housing and Urban Development in 2013. That rule formally recognized the long-held understanding at HUD that the Fair Housing Act forbids housing practices that discriminate on the basis of race, sex, religion, disability, and other federally protected status—whether the discrimination is a stated goal or not. The Supreme Court confirmed this reading of the Fair Housing Act.

But under Secretary Ben Carson, HUD has announced that it is rethinking its position on housing discrimination. Just last week, the department issued a federally required notice that it will reexamine the disparate-impact rule, which could lead to the department repealing the standard altogether—despite the fact that the Supreme Court affirmed its constitutionality.

The Inclusive Communities case concerned the distribution of housing tax credits in Texas. In an earlier lawsuit, a housing and social justice nonprofit called the Inclusive Communities Project argued that the way that Texas allocated its Low-Income Housing Tax Credits in the Dallas metro area discriminated against racial minorities. By concentrating the credits in poorer, majority-minority communities, the state housing department was effectively denying low-income residents access to the opportunity, amenities, and schools of wealthier (and whiter) neighborhoods, the plaintiffs argued. The state counter-sued.

The Supreme Court’s liberal justices confirmed that this practice indeed disproportionately negatively affected racial minorities: a disparate-impact claim. But to get there, the majority had to affirm that disparate-impact liability exists under the Fair Housing Act.

“Recognition of disparate-impact claims is consistent with the FHA’s central purpose,” Kennedy wrote. “The FHA [ . . . ] was enacted to eradicate discriminatory practices within a sector of our Nation’s economy. [ . . . ] These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability.”

An illustration of disparate impact in Houston: Public housing developments are purposely excluded from white neighborhoods. (Texas Low Income Housing Information Service)

Kennedy’s decision is thorough and nuanced. It provides a brief history of the law on racial discrimination in housing, from Buchanan v. Warley in 1917 to the assassination of Martin Luther King Jr. and the passage of the Fair Housing Act in 1968. Kennedy examines the effects that a disparate-impact standard might have on tenants, owners, and cities. (“If the specter of disparate-impact litigation causes private developers to no longer construct or renovate housing units for low-income individuals, then the FHA would have undermined its own purpose as well as the free-market system.”) He acknowledges the limits of disparate impact—a mere finding of statistical disparity is not enough—and he warns against policies that reduce homeowners to their race alone.

Ultimately, Kennedy’s majority decision finds that disparate-impact liability “may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.”  

“[S]ince the passage of the Fair Housing Act in 1968 and against the backdrop of disparate-impact liability in nearly every jurisdiction, many cities have become more diverse,” the decision reads. “The FHA must play an important part in avoiding the Kerner Commission’s grim prophecy that ‘[o]ur Nation is moving toward two societies, one black, one white—separate and unequal.’ The Court acknowledges the Fair Housing Act’s continuing role in moving the Nation toward a more integrated society.”

Three years after that landmark decision, after the election of Trump, HUD is taking steps to undermine the rule at the core of Kennedy’s decision in Inclusive Communities. The department’s announcement that it will reopen its disparate-impact rule comes at a time when HUD faces a rash of lawsuits for failing to enforce another civil-rights standard, the Affirmatively Furthering Fair Housing rule. (The department has declined to discuss these cases.)

The Trump administration’s back-pedaling on fair housing law extends beyond the disparate-impact rule. For example: In January 2017, a HUD investigation concluded that Houston had violated the Civil Rights Act when Mayor Sylvester Turner blocked a proposal to build a mixed-income apartment development in the Galleria, an affluent neighborhood with transit options and good schools. But the sanctions didn’t last. After Carson took office, the department changed course, releasing Houston’s federal funds and entering into a voluntary compliance agreement with the city (one with minimal obligations). Another lawsuit: A Texas housing nonprofit sued HUD for failing to enforce federal civil rights law.

If Carson decides to soften or scrap the disparate-impact rule, legal challenges will almost certainly follow. Other cases may offer the Supreme Court the opportunity to revisit the issue. If and when that happens, it might very well be to strike down the disparate-impact reading. Kennedy’s retirement opens the way for a Trump-appointed justice likely to join the court’s conservatives in arguing that the Fair Housing Act bars explicit racial discrimination only—opening up a world of discriminatory practices in lending, zoning, selling, and renting. And fair housing is only one of the issues on which Kennedy’s decisive vote may soon be overruled.

At a rally in Fargo, North Dakota, on Wednesday, Trump said of Kennedy’s retirement, “I'm very honored he chose to do it during my term in office because he felt confident in me to make the right choice and carry on his legacy.” Shoring up fair housing law is part of that legacy. But by stepping down now, months before the mid-term elections, Kennedy has introduced the possibility that his legacy may soon come to mean the opposite.

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