Academic journal article Columbia Journal of Law and Social Problems

This House Is Not Your Home: Litigating Landlord Rejections of Housing Choice Vouchers under the Fair Housing Act

Academic journal article Columbia Journal of Law and Social Problems

This House Is Not Your Home: Litigating Landlord Rejections of Housing Choice Vouchers under the Fair Housing Act

Article excerpt

I. INTRODUCTION

The Crossroads at Penn Apartments in Richfield, Minnesota was once the largest source of unsubsidized but affordable rental housing in the Minneapolis-St. Paul area.1 Many low-income households could afford units there with the help of the Section Eight Housing Choice Voucher (HCV) program, a federal program that makes rent payments directly to landlords on behalf of eligible low-income households.2 In 2015, the Crossroads at Penn Apartments was purchased by MSP Crossroads Apartment LLC (Crossroads LLC), and rebranded as Concierge Apartments.3 Crossroads LLC increased the rent in the complex by approximately 31%; installed new features including granite countertops, a golf simulator, and a pet spa; and went about courting "young professionals," a drastically different demographic from the lowincome households that had resided at the Penn Apartments for years.4 In addition, Crossroads LLC required all existing tenants to re-apply for housing and announced that they could no longer use HCVs to pay their rent.5

In response, thirty-seven tenants and a tenant organization filed suit against Crossroads LLC, alleging that Crossroads LLC's exclusionary practices and decision not to accept HCVs disproportionately affected people of color, persons with disabilities, and families with children.6 The plaintiffs contended that thirty-five tenants relied on Section Eight housing vouchers, that all thirtyfive belong to one or more protected classes under the Fair Housing Act (FHA), and that Crossroads LLC's policies would force all of these tenants to relocate.7 On July 5th 2016, the Court denied Crossroads LLC's motion to dismiss the tenants' claims, allowing the parties to commence discovery. Though Crossroads has since settled, the district court's decision to let the lawsuit go forward - and its explicit rejection of the defendants' contention that a landlord's practice of rejecting HCVs cannot by itself violate the FHA - is a significant departure from most federal courts' previously circumscribed application of the FHA's protections to HCV holders.8

Source of income is not a protected category under federal law, but landlord discrimination based on source of income in the form of refusing to accept housing vouchers has a disparate impact based on race, familial status, national origin, and disability.9 Part II of this Note will explain the distinction between disparate impact and disparate treatment; outline the history of the FHA; and illustrate the scope and purpose of the federal Section Eight HCV program.

Part III of this Note will describe the disagreement between the Second and Seventh Circuits with the Sixth Circuit regarding whether HCV holders may litigate landlord refusals to accept HCVs under the FHA. The Second and Seventh Circuits have barred suits in which Section Eight housing vouchers serve as a proxy for a protected class - reasoning that since landlord participation in Section Eight is voluntary landlords should not be held liable for exercising a business choice and refusing vouchers.10 In contrast, the Sixth Circuit held that tenants could litigate such cases if they properly alleged a prima facie case of discrimination. The Supreme Court has not directly resolved this circuit split.

Part IV of this Note introduces the governing standards for disparate impact analysis as articulated in Inclusive Communities11 and argues that the Second and Seventh Circuits' conclusion that a business practice cannot result in an impermissible disparate impact simply because the practice itself is a voluntary "business choice" directly conflicts with those standards.12 Fur- thermore, the courts' per se dismissal of disparate impact claims involving HCVs does not comport with established Title VII and FHA jurisprudence and is incompatible with the text of the FHA. Next, this Part argues that in accordance with Title VII and FHA disparate impact jurisprudence, defendants carry the burden of production and persuasion when asserting a "business necessity"-style affirmative defense to a prima facie showing of disparate impact. …

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