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Bronson v. Crestwood Lake Section 1 Holding Corp. - 724 F. Supp. 148 (S.D.N.Y. 1989)

Rule:

Congress has made it unlawful to refuse to sell or rent after the making of a bona fide offer or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, or national origin. 42 U.S.C.S. § 3604. Housing practices unlawful under Title VIII of the Civil Rights Act of 1968, 42 U.S.C.S. § 3601 et seq., include not only those motivated by a racially discriminatory purpose, but also those that disproportionately affect minorities. Under this basis for liability, known as the disparate impact theory, a prima facie case is established by showing that the challenged practice of the defendant actually or predictably results in racial discrimination; in other words that it has a discriminatory effect. Accordingly, plaintiffs under Title VIII need not show that the policies complained of were fashioned with discriminatory intent. Once plaintiffs have succeeded in making a prima facie showing of discriminatory effect, the burden shifts to the defendants to present bona fide and legitimate justifications for their policies.

Facts:

Plaintiffs Bronson and Carter, both African-American, were recipients of public assistance and holders of Section 8 housing assistance vouchers. Plaintiffs applied to become lessees of Crestwood Lake Apartments, a housing development owned by defendant Crestwood Lake Section 1 Holding Corporation (Crestwood). Their respective applications were rejected because of Crestwood’s policy of “not accepting Section 8,” or not accepting people whose income was not at least three times the amount of the rent (the "triple income test”). Plaintiffs then sought for an order temporarily enjoining defendant from entering into a lease for the occupancy of two currently available two bedroom apartments which, plaintiffs claim, would have been made available to them but for the enforcement of defendant's allegedly discriminatory application policies. The judge granted plaintiffs’ application for the temporary restraining order. In their Complaint, plaintiffs allege that defendant's refusal to rent to Section 8 voucher holders or to applicants who do not meet the triple income test has a substantially disproportionate and adverse impact upon minority persons and is therefore violative of plaintiffs' rights under the Fair Housing Act, 42 U.S.C.S. §§ 3601 et seq., as well as under state law. Plaintiffs also claim that the aforementioned policies constitute an attempt to restrict the minority composition at Crestwood and, as such, have a racially discriminatory purpose.

Issue:

Did the defendants’ rental policy have a disparate impact upon racial minorities in violation of the Fair Housing Act and Title VIII of the Civil Rights Act of 1968?

Answer:

Yes.

Conclusion:

In considering plaintiffs' motion for preliminary injunction, the federal district court held that irreparable harm could be presumed from a showing of housing discrimination. The court found that statistical evidence offered by plaintiffs made a prima facie case of disparate impact. It then found that defendants had not met their burden to prove that the policies served a legitimate business goal. They had not offered any evidence to show that the polices were reasonably necessary to insure rent payment or that renting to Section 8 tenants or tenants who did not meet the triple income test had resulted in losses. According to the court, defendants' willingness to rent to tenants who participated in a program very similar to Section 8 was evidence against the necessity of the policy against Section 8 tenants. Further, plaintiffs had given various assurances that their rents would be paid.

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