The writer, a Democrat from Massachusetts, is a member of the U.S. Senate.
The Supreme Court appears poised to continue its systematic assault on our core civil rights laws. After gutting the Voting Rights Act just two years ago, the court set its sights on our country’s fair housing laws when it heard oral arguments today in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. As with the voting rights decision, a decision limiting the scope of the housing laws would ignore the will of Congress and undermine basic principles of racial equality. But there is even more at stake in the fair housing case, because the wrong decision would reduce economic opportunities for working families and raise the risk of another financial crisis.
In 1968, Congress enacted the Fair Housing Act to combat segregation in housing. Congress drafted the act to give families two options to challenge discrimination: a claim that someone intentionally discriminated against them on the basis of race and a separate claim that someone adopted a policy or practice that had a disparate discriminatory impact on minority families.
Intentional discrimination cases are notoriously hard to prove because they require evidence of a person’s state of mind. As a result, most housing segregation cases are brought on the second basis: disparate impact. Those cases are no easy lift either. To find a disparate-impact violation, a court must conclude that a challenged practice has a disproportionately negative effect on otherwise similar racial groups and that there is no nondiscriminatory explanation for the practice. Despite that high bar, disparate-impact claims have been the main tool for attacking some of the most persistent practices contributing to housing segregation.
Congress clearly intended to create two paths to challenge housing discrimination. For the past 47 years, appellate courts across the country have uniformly upheld the existence of Fair Housing Act disparate-impact claims. When it amended the law in 1988, Congress did nothing to question that settled understanding. In fact, with overwhelming majorities in both houses, it made the opposite decision, expanding the act to cover additional types of claims. Yet experienced watchers of the Supreme Court believe it is ready to defy Congress and ignore the country’s appellate courts by eliminating the disparate-impact test altogether.
Such a ruling would inevitably result in far more segregated communities. Seventeen states, with both Democratic and Republican governors — from Massachusetts and California to North Carolina and Utah — have joined to warn that jettisoning disparate-impact claims would eliminate “an especially important tool to combat the kinds of discrimination that perpetuate segregation.” That is deeply troubling on its face, but the economic effects are even broader.
Housing segregation has a powerful impact on opportunities to build economic security. Data show that lower- and middle-income families living in more segregated communities have a harder time climbing the economic ladder. A group of researchers from Harvard University and the University of California at Berkeley studied cities across the United States to assess what factors helped those in the lowest income bracket reach the highest income bracket later in life. They concluded that a lower level of housing segregation was one of only five factors consistently associated with upward mobility. Increasing segregation would just add to the troubles facing today’s middle class.
Undercutting our fair housing laws also would increase the risk of another financial crisis. In the wake of the 2008 economic collapse, the Justice Department found that several big banks and other mortgage lenders had violated the Fair Housing Act’s disparate-impact standard by steering borrowers of color into more expensive mortgages than white borrowers with similar financial profiles. While lenders profited in the short term, these families were unable to keep up with their payments when housing prices fell, contributing to the chain reaction throughout the financial system. As the crisis demonstrated, we need stronger fair housing laws, not weaker ones that allow lenders to return to the risky — but lucrative — practices that set the stage for the last crash.
But the big financial institutions want access to those profits — no matter the risks. That’s why the American Financial Services Association, the American Insurance Association and the American Bankers Association are all pressing the court to eliminate disparate-impact claims. The giant corporations that these groups serve are hoping that limiting a basic civil rights law will give them new ways to tilt the playing field even more steeply against hardworking families.
The promise of our country is our commitment to build opportunities — not just for some of our families, but for all of our families. We’ve seen what happens when the narrow, short-term interests of the financial industry take precedence over this basic commitment. We can only hope the Supreme Court has learned that lesson, too.
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