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Mhany Mgmt. v. Cty. Of Nassau - 819 F.3d 581 (2d Cir. 2016)

Rule:

Section 804(a) of the Fair Housing Act, also known as Title VIII of the Civil Rights Act of 1968, makes it unlawful to refuse to sell or rent or otherwise make unavailable or deny, a dwelling to any person because of race, color, or national origin. 42 U.S.C.S. § 3604(a). The phrase "otherwise make unavailable" has been interpreted to reach a wide variety of discriminatory housing practices, including discriminatory zoning restrictions, and its results-oriented language counsels in favor of recognizing disparate-impact liability. For this reason Sections 804(a) and 805(a) of the FHA provide for both discriminatory intent and disparate-impact liability.

Facts:

Defendant Village of Garden City began the process of rezoning the Social Services Site. Garden City retained the planning firm of Buckhurst Fish and Jacquemart (BFJ) to provide a recommendation with regard to the rezoning of the Social Services Site. BFJ proposed rezoning the vast majority of the Social Services Site “Residential-Townhouse” (R-T), an entirely new zoning classification. BFJ’s proposed description of the R-T zone defined “townhouse” as a “single-family dwelling unit.” Defendant Garden City Board of Trustees unanimously adopted the Local Law No. 2-2204 and the Social Services Site was rezoned R-T. The following month, Defendant County of Nassau issued a Request for Proposals (RFP) concerning the Social Services Site under the R-T zoning designation. The RFP stated that the County would not consider bids of less than $30 million. Plaintiffs, MHANY Management, Inc, as well as several fair housing advocate groups and two individuals, were unable to submit a bid meeting the specifications of the RFP. Ismene Speliotis, Executive Director of NYAHC/MHANY, analyzed the R-T zoning and concluded that it was not financially feasible to build affordable housing under R-T zoning restrictions at any acquisition price. The County ultimately awarded the contract to develop the Social Services Site to Fairhaven Properties, Inc. (Fairhaven), a developer of single-family homes, for $56.5 million, the highest bid. Plaintiffs then instituted the present complaint asserting discriminatory zoning under the Fair Housing Act. Following a bench trial, the federal district court found defendants liable under the Fair Housing Act, as well as Section 1981Section 1983, and the Equal Protection Clause. Plaintiff MHANY Management, Inc. and Intervenor-Plaintiff New York Communities for Change, Inc. filed cross-appeal from a February 15, 2012 grant of summary judgment by the same district court in favor of Defendants County of Nassau, County of Nassau Planning Commission, and County of Nassau Office of Real Estate and Development. 

Issue:

Did the district court err in finding that defendant Garden City violated the Fair Housing Act?

Answer:

No.

Conclusion:

The Court of Appeals for the Second Circuit affirmed in part, holding that the district court did not commit clear error in finding that the Village's decision to abandon multi-family residential group zoning in favor of residential-townhouse zoning was made with discriminatory intent, and that defendants failed to demonstrate they would have made the same decision absent discriminatory considerations. According to the Court, a plaintiff can establish a prima facie case of disparate treatment by showing that animus against the protected group was a significant factor in the position taken by the municipal decision-makers themselves or by those to whom the decision-makers were knowingly responsive. Here, the district court properly found plaintiffs had established liability under 42 U.S.C.S. § 3604(a) based on a theory of disparate treatment. Therefore, the Court vacated that part of the judgment, concluding that the district court had applied an incorrect standard in addressing the Plaintiff's FHA disparate impact claims, and remanded with instructions that the district court determine whether the Plaintiffs had proven that the "substantial, legitimate, non-discriminatory interests" proffered by defendant Garden City in support of its zoning shift "could be served by another practice that has a less discriminatory effect." 24 C.F.R. § 100.500(c)(3. The Second Circuit also vacated the federal district court's grant of summary judgment to Defendant County on the Plaintiffs' "steering" claims under Section 804(a) of the FHA and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, and remanded for reconsideration of those claims. 

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