Sixth Packet Cases - Fair Housing Act

Ashbury v. Brougham, 866 F.2d 1276 (10th Cir. 1989)United States Court of Appeals, Tenth Circuit

PARKER, District Judge.Plaintiff Rosalyn Asbury brought suit under 42 U.S.C. § 19821 and the Fair Housing

Act, 42 U.S.C. § 3601 et seq (FHA),2claiming that the defendants refused to rent or to allow her to inspect or negotiate for the rental of an apartment or townhouse at Brougham Estates in Kansas City. Defendants Leo Brougham, individually and doing business as Brougham Estates and Brougham Management Company, and Wanda Chauvin, his employee, appeal a jury verdict awarding Asbury compensatory

damages of $7,500 against them upon a finding that the defendants discriminated against her on the basis of race and/or sex. Leo Brougham appeals from the jury verdict awarding punitive damages in the amount of $50,000 solely against him.

. . . I. Sufficiency of Evidence Supporting a Finding of Racial Discrimination in

Violation of § 1982 and FHA.42 U.S.C. § 1982 and the FHA both prohibit discrimination on the basis of race. In

order to prevail on a claim made under these statutes, plaintiff must prove a discriminatory intent. A violation occurs when race is a factor in a decision to deny a minority applicant the opportunity to rent or negotiate for a rental, but race need not be the only factor in the decision. In addition, § 3604(d) of the FHA specifically prohibits dissemination of false information about the availability of housing because of a person's race. Accordingly, failure to provide a minority applicant with the same information about availability of a rental unit or the terms and conditions for rental as is provided to white “testers,” results in false information being provided and is cognizable as an injury under the FHA.

A. Asbury's Prima Facie Case under § 1982 and FHA.The three-part burden of proof analysis established in McDonnell Douglas Corp. v.

Green, 411 U.S. 792 (1973), a Title VII employment discrimination case, has been widely applied to FHA and § 1982 claims. Under the McDonnell Douglas analysis, plaintiff first must come forward with proof of a prima facie case of discrimination. Second, if plaintiff proves a prima facie case, the burden shifts to defendants to produce evidence that the refusal to rent or negotiate for a rental was motivated by legitimate, non-racial considerations. Third, once defendants by evidence articulate non-

1 42 U.S.C. § 1982 provides that “[a]ll citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, convey real and personal property.”2 42 U.S.C. § 3604 provides that... it shall be unlawful-(a) 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.(b) To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, or national origin....(d) To represent to any person because of race, color, religion, sex or national origin that any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available.

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discriminatory reasons, the burden shifts back to plaintiff to show that the proffered reasons were pretextual.

The proof necessary to establish a prima facie case under the FHA also establishes a prima facie case of racial discrimination under § 1982. In order to establish

her prima facie case, plaintiff had to prove that:(1) she is a member of a racial minority;(2) she applied for and was qualified to rent an apartment or townhouse in

Brougham Estates;(3) she was denied the opportunity to rent or to inspect or negotiate for the

rental of a townhouse or apartment; and

(4) the housing opportunity remained available.3

A review of the evidence in this case shows that plaintiff established her prima facie case. Defendants stipulated that Asbury is black. Plaintiff testified that on February 23, 1984, she went to Brougham Estates with her daughter to obtain rental housing. At the rental office at Brougham Estates, Asbury encountered Wanda Chauvin, the manager,4 and explained to Chauvin that she was being transferred to Kansas City and needed to rent housing. Asbury told Chauvin that she needed to secure housing by the middle of March or the beginning of April. In response, Chauvin said there were no vacancies but told Asbury she could call back at a later time to check on availability. Chauvin provided no information concerning availability of rental units that would assist Asbury in her efforts to rent an apartment or townhouse at Brougham Estates. Asbury asked for the opportunity to fill out an application, but Chauvin did not give her an application, again stating that there were no vacancies and that she kept no waiting list. Asbury also requested floor plans or the opportunity to view a model unit, and Chauvin refused. Instead, Chauvin suggested Asbury inquire at the Westminister Apartments an apartment complex housing mostly black families. Although Chauvin did not ask Asbury about her qualifications, plaintiff was employed with the Federal Aviation Authority at a salary of $37,599. Based on her salary, defendants concede that Asbury would likely be qualified to rent an apartment or townhouse at Brougham Estates. . . .

Although there was a conflict in the evidence as to the availability of housing at the time Asbury attempted to inspect and negotiate for rental, there was abundant evidence from which the jury could find that housing was available. Defendants testified that families with a child are housed exclusively in the townhouses at Brougham Estates, and that there were no townhouses available on the date Asbury inquired. Asbury introduced evidence suggesting that both apartments and townhouses were available and, in addition, that exceptions previously had been created to allow children to reside in the apartments.

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4 Although there is some dispute in the record concerning the precise relationship between Chauvin and Brougham, Chauvin worked for Brougham on a commission basis, and he specifically referred to her as his employee and rental agent. As discussed elsewhere in the opinion, Brougham's liability arises directly from establishing discriminatory policies and procedures. In addition, discriminatory conduct on the part of Chauvin in her capacity as Brougham's rental agent or employee is attributable to Brougham as owner and managing partner of Brougham Estates. Phiffer v. Proud Parrot Motor Hotel, Inc., 648 F.2d 548, 552 (9th Cir.1980) (“The duty of the owner ... to obey the laws relating to racial discrimination is non-delegable.”)

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On February 24, 1984, the day after Asbury inquired about renting, Asbury's sister-in-law, Linda Robinson, who is white, called to inquire about the availability of two-bedroom apartments. The woman who answered the telephone identified herself as

“Wanda” and invited Robinson to come to Brougham Estates to view the apartments. The following day, February 25, 1984, Robinson went to the rental office at Brougham Estates and met with Wanda Chauvin. Chauvin provided Robinson with floor plans of available one- and two-bedroom apartments at Brougham Estates. Robinson specifically asked Chauvin about rental to families with children, and Chauvin did not tell

Robinson that children were restricted to the townhouse units. Robinson accompanied Chauvin to inspect a model unit and several available two-bedroom apartments. Upon inquiry by Robinson, Chauvin indicated that the apartments were available immediately and offered to hold an apartment for her until the next week.

Asbury also provided evidence indicating that townhouses were available for rent. On February 1, 1984, Daniel McMenay, a white male, notified Brougham Estates that he intended to vacate his townhouse. On April 4, 1984, Brougham Estates rented the townhouse vacated by McMenay to John Shuminski, a white male. On March 10, 1984, Randall Hockett, a white male, also rented a townhouse at Brougham Estates. In addition, Asbury provided computer data sheets generated by Brougham Estates which indicated that a third townhouse was unoccupied at the time of her inquiry on February 23, 1984 and remained vacant as of April 10, 1984. There was also evidence that a building which included townhouse units had been closed for the winter but would be available for rent beginning in the spring. On February 22, 1984, one day prior to Asbury's inquiry into vacancies, James Vance, a white male, paid a deposit for a townhouse which he occupied when the building opened on April 10, 1984. Since Asbury testified that she told Chauvin she did not need to occupy a rental unit until the beginning of April, the jury could have concluded that at least one of the townhouses which was subsequently rented to the white males was available at the time Asbury inquired. Although defendants took the position at trial that the townhouses were closed or out of order for repair and therefore not available to rent, the jury was free to accept the evidence of availability presented by the plaintiff.

Since Asbury met her burden of proving a prima facie case of racial discrimination, the burden shifted to defendants to prove a legitimate, non-discriminatory reason for denial of housing.

B. Failure of Proof of Legitimate, Non-discriminatory Reason for Rejection.Defendants claimed their legitimate, nondiscriminatory reasons for rejecting Asbury

arose out of the policies at Brougham Estates that families with one child could rent townhouses but not apartments, and that families with more than one child were not permitted to move into Brougham Estates. Defendants further argued that they made no exceptions to these rules. Defendants contended that in accordance with these rental policies, no appropriate housing was available for Asbury when she inquired. However, plaintiff introduced evidence indicating that exceptions to these rules had been made on several occasions; families with children had rented apartments, and families with more than one child had been permitted to move into Brougham Estates. Asbury was not provided information about the terms and conditions that gave rise to an exception to

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the policy concerning children being restricted to the townhouses. The jury could therefore find that defendants' reasons for denying Asbury the opportunity to negotiate for rental were not legitimate and nondiscriminatory.

Defendants also argue that evidence of a high percentage of minority occupancy in

Brougham Estates conclusively rebuts the claim of intentional racial

discrimination.5 Although such statistical data is relevant to rebutting a claim of discrimination, statistical data is not dispositive of a claim of intentional discrimination. Moreover, there was other evidence from which the jury could have determined that race was a motivating factor in defendants' decision to refuse to negotiate with Asbury for a rental unit.

II. Sufficiency of Evidence Supporting Punitive Damages Award.Defendant Brougham contends that there was insufficient evidence supporting the

jury's award of punitive damages against him because he never met or dealt with the plaintiff, the actions of Chauvin should not be attributed to him, and he did not promulgate any discriminatory policies or procedures.

Punitive damages may be awarded against a defendant “when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.” (citation omitted) The jury has discretion to award punitive damages to punish outrageous conduct on the part of a defendant and to deter similar conduct in the future.

Plaintiff advanced two theories supporting Brougham's liability for punitive damages: (1) Brougham's own discriminatory conduct in establishing rental policies, procedures and rules; and (2) his authorization or ratification of discriminatory conduct by Chauvin, his employee. We find sufficient evidence to establish liability under either theory.

In this case, Asbury presented evidence that Leo Brougham was the managing partner of Brougham Estates and Brougham Management Company. Brougham established all policies, rules and rental procedures for Brougham Estates. Chauvin worked for Brougham who instructed her about the rental policies and procedures. Among the policies and procedures implemented by Brougham were the requirements that Chauvin routinely and untruthfully tell people over the phone that there were no vacancies, whether or not vacancies existed, but that Chauvin then encourage the individuals to come in, inspect the premises and discuss upcoming vacancies. Brougham established the requirement of visual observation of a prospective tenant. Although a policy that prospective tenants must be visually scrutinized is not necessarily improper, under the circumstances of this case, the jury could have inferred that the policy operated to screen prospective tenants on the basis of race and that, at a minimum, Brougham was callously indifferent to this result of his policy. Indeed, this policy had given rise to several administrative complaints by single black females prior to Asbury's inquiry about a vacancy. Brougham was aware of previous claims of discriminatory practices in the rental of units at Brougham Estates.

Another policy established by Brougham was that a family with a child could occupy only a townhouse. Chauvin was advised of this policy. Brougham testified that he made

5 Defendants introduced evidence indicating that in 1983 total black occupancy was 20% and in 1984 total black occupancy was 25%.

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no exceptions to the policy, and he testified specifically that no tenant or prospective

tenant with a child could obtain permission to be excepted from the rule. Plaintiff, however, produced evidence that exceptions had been created on occasion. Those exceptions had been authorized by Brougham and had been made on an individual basis. The rental policies, procedures and rules, including criteria for

exceptions, were not kept in written form. From the evidence presented, the jury could have determined that the policies established and implemented by defendant Brougham directly fostered the discrimination which Asbury experienced, that Brougham should have been aware that this might occur, and that Brougham was recklessly or callously indifferent to it happening.

Plaintiff also offered evidence tending to prove that Brougham ratified Chauvin's actions. In March, 1984, shortly after her encounter with Chauvin, Asbury filed a complaint with the Department of Housing and Urban Development (HUD) claiming discrimination on the basis of race and sex. Asbury requested a formal apology and that the discriminatory practices cease. Following notification by HUD that a complaint had been filed by Asbury, Brougham personally took steps to investigate the complaint. He drove through the neighborhood where Asbury had found a rental and observed several children in front of Asbury's home. In an attempt to confirm his assumption that Asbury had more than one child, Brougham acquired the unlisted phone number of a neighbor of Asbury, Judith Hunter, and asked Hunter questions about Asbury's living arrangements. Hunter told Brougham that to her knowledge Asbury had only one child. In addition, Brougham testified at trial that he had never gone to Asbury's place of employment to seek information about her. However, in rebuttal, one of Asbury's co-workers testified that Brougham had been at Asbury's place of employment and that Brougham had asked questions about her. After Brougham took these investigatory steps, he never apologized to Asbury, although it appears that he determined Asbury had only one child and therefore fit within the residential policies of Brougham Estates. . . . Furthermore, the jury could have drawn the inference that Brougham's failure to apologize or otherwise remedy the situation, after personally investigating Asbury's claim of discrimination at Brougham Estates, was an acceptance and ratification of Chauvin's treatment of Asbury. . . .

Having reviewed the record in this case, we find that there was substantial evidence supporting and a reasonable basis for the jury's verdict awarding both compensatory and punitive damages, and we affirm the district court's decision to deny defendants' motion for a new trial.

Query: What is the court talking about when it discusses the prima facie case? Is the housing policy discriminatory on its face or as applied? What’s the difference? Why isn’t it relevant that there are African-American residents in Brougham currently?

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United States v. Starrett City Associates, 840 F.2d 1096 (2d Cir. 1988)United States Court of Appeals, Second Circuit

MINER, Circuit Judge: . . . Appellants [Starrett City Associates, Starrett City, Inc., and Delmar Management

Company (“Starrett”)] constructed, own and operate “Starrett City,” the largest housing development in the nation, consisting of 46 high-rise buildings containing 5,881 apartments in Brooklyn, New York. . . . The United Housing Foundation abandoned a project to build a development of cooperative apartments at the Starrett City site in 1971. Starrett proposed to construct rental units on the site on the condition that the New York City Board of Estimate approve a transfer to Starrett of the city real estate tax abatement granted to the original project. The transfer created “substantial community opposition” because “the neighborhood surrounding the project and past experience with subsidized housing” created fear that “the conversion to rental apartments would result in Starrett City's becoming an overwhelmingly minority development.” United States v. Starrett City Assocs., 660 F. Supp. 668, 670 (E.D.N.Y.1987). The transfer was approved, however, “upon the assurance of Starrett City's developer that it was intended to create a racially integrated community.” Id.

Starrett has sought to maintain a racial distribution by apartment of 64% white, 22% black and 8% hispanic at Starrett City. Starrett claims that these racial quotas are necessary to prevent the loss of white tenants, which would transform Starrett City into a predominantly minority complex. Starrett points to the difficulty it has had in attracting an integrated applicant pool from the time Starrett City opened, despite extensive advertising and promotional efforts. Because of these purported difficulties, Starrett adopted a tenanting procedure to promote and maintain the desired racial balance. This procedure has resulted in relatively stable percentages of whites and minorities living at Starrett City between 1975 and the present.

The tenanting procedure requires completion of a preliminary information card stating, inter alia, the applicant's race or national origin, family composition, income and employment. The rental office at Starrett City receives and reviews these applications. Those that are found preliminarily eligible, based on family composition, income, employment and size of apartment sought, are placed in “the active file,” in which separate records by race are maintained for apartment sizes and income levels. Applicants are told in an acknowledgement letter that no apartments are presently available, but that their applications have been placed in the active file and that they will be notified when a unit becomes available for them. When an apartment becomes available, applicants are selected from the active file for final processing, creating a processed applicant pool. As vacancies arise, applicants of a race or national origin similar to that of the departing tenants are selected from the pool and offered apartments.

In December 1979, a group of black applicants brought an action against Starrett in the United States District Court for the Eastern District of New York. The district court certified the plaintiff class in June 1983. Plaintiffs alleged that Starrett's tenanting procedures violated federal and state law by discriminating against them on the basis of race. The parties stipulated to a settlement in May 1984, and a consent decree was entered subsequently. The decree provided that Starrett would, depending on

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apartment availability, make an additional 35 units available each year for a five-year period to black and minority applicants.

The government commenced the present action against Starrett in June 1984, “to place before the [c]ourt the issue joined but left expressly unresolved” in the . . .

consent decree: the “legality of defendants' policy and practice of limiting the number of apartments available to minorities in order to maintain a prescribed degree of racial balance.” United States v. Starrett City Assocs., 605 F. Supp. 262, 263 (E.D.N.Y.1985). The complaint alleged that Starrett, through its tenanting policies, discriminated in violation of the Fair Housing Act. Specifically, the government maintained that Starrett violated the Act by making apartments unavailable to blacks

solely because of race, 42 U.S.C. § 3604(a) ; by forcing black applicants to wait significantly longer for apartments than whites solely because of race, id. § 3604(b); by enforcing a policy that prefers white applicants while limiting the numbers of minority applicants accepted, id. § 3604(c); and by representing in an acknowledgement letter that no apartments are available for rental when in fact units are available, id. § 3604(d). . . .

Starrett maintained that the tenanting procedures “were adopted at the behest of the [s]tate solely to achieve and maintain integration and were not motivated by racial animus.” To support their position, appellants submitted the written testimony of three housing experts. They described the “white flight” and “tipping” phenomena, in which white residents migrate out of a community as the community becomes poor and the minority population increases, resulting in the transition to a predominantly minority community. Acknowledging that “ ‘the tipping point for a particular housing development, depending as it does on numerous factors and the uncertainties of human behavior, is difficult to predict with precision,’ ” one expert stated that the point at which tipping occurs has been estimated at from 1% to 60% minority population, but that the consensus ranged between 10% and 20%. Another expert, who had prepared a report in 1980 on integration at Starrett City for the New York State Division of Housing and Community Renewal, estimated the complex's tipping point at approximately 40% black on a population basis. A third expert, who had been involved in integrated housing ventures since the 1950's, found that a 2:1 white-minority ratio produced successful integration.

Title VIII of the Civil Rights Act of 1968 (“Fair Housing Act” or “the Act”), 42 U.S.C. §§ 3601-3631 (1982), was enacted pursuant to Congress' thirteenth amendment powers, “to provide, within constitutional limitations, for fair housing throughout the United States.” 42 U.S.C. § 3601. Section 3604 of the statute prohibits discrimination because of race, color or national origin in the sale or rental of housing by, inter alia: (1) refusing to rent or make available any dwelling, id. § 3604(a); (2) offering discriminatory “terms, conditions or privileges” of rental, id. § 3604(b); (3) making, printing or publishing “any notice, statement, or advertisement ... that indicates any preference, limitation, or discrimination based on race, color ... or national origin,” id. § 3604(c); and (4) representing to any person “that any dwelling is not available for ... rental when such dwelling is in fact so available,” id. § 3604(d).

Housing practices unlawful under Title VIII include not only those motivated by a racially discriminatory purpose, but also those that disproportionately affect minorities.

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Section 3604 “is designed to ensure that no one is denied the right to live where they choose for discriminatory reasons.” Although “not every denial, especially a temporary denial, of low-income public housing has a discriminatory impact on racial minorities” in violation of Title VIII, an action leading to discriminatory effects on the availability of housing violates the Act.

Starrett's allocation of public housing facilities on the basis of racial quotas, by denying an applicant access to a unit otherwise available solely because of race, produces a “discriminatory effect ... [that] could hardly be clearer[]” (citation omitted). . . .

Both Starrett and the government cite to the legislative history of the Fair Housing Act in support of their positions. This history consists solely of statements from the floor of Congress. These statements reveal “that at the time that Title VIII was enacted, Congress believed that strict adherence to the anti-discrimination provisions of the [A]ct” would eliminate “racially discriminatory housing practices [and] ultimately would result in residential integration.” Thus, Congress saw the antidiscrimination policy as the means to effect the antisegregation-integration policy. While quotas promote Title VIII's integration policy, they contravene its antidiscrimination policy, bringing the dual goals of the Act into conflict. The legislative history provides no further guidance for resolving this conflict.

We therefore look to analogous provisions of federal law enacted to prohibit segregation and discrimination as guides in determining to what extent racial criteria may be used to maintain integration. . . .

Although any racial classification is presumptively discriminatory, a race-conscious affirmative action plan does not necessarily violate federal constitutional or statutory provisions. However, a race-conscious plan cannot be “ageless in [its] reach into the past, and timeless in [its] ability to affect the future.” (citation omitted) A plan employing racial distinctions must be temporary in nature with a defined goal as its termination

point. Moreover, we observe that societal discrimination alone seems “insufficient and over expansive” as the basis for adopting so-called “benign” practices with discriminatory effects “that work against innocent people,” in the drastic and burdensome way that rigid racial quotas do. (citation omitted) Furthermore, the use of quotas generally should be based on some history of racial discrimination or imbalance within the entity seeking to employ them. Finally, measures designed to increase or ensure minority participation, such as “access” quotas, have generally been upheld. However, programs designed to maintain integration by limiting minority participation, such as ceiling quotas, are of doubtful validity, see Jaimes, 833 F.2d at 1207 (invalidating public housing authority integration plan to the extent it acts as strict racial quota), because they “ ‘single[ ] out those least well represented in the political process to bear the brunt of a benign program,’ ” Fullilove, 448 U.S. at 519 (Marshall, J., concurring).

Starrett's use of ceiling quotas to maintain integration at Starrett City lacks each of these characteristics. First, Starrett City's practices have only the goal of integration maintenance. The quotas already have been in effect for ten years. Appellants predict that their race-conscious tenanting practices must continue for at least fifteen more years, but fail to explain adequately how that approximation was reached. In any event, these practices are far from temporary. Since the goal of integration maintenance is purportedly threatened by the potential for “white flight” on a continuing basis, no

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definite termination date for Starrett's quotas is perceivable. Second, appellants do not assert, and there is no evidence to show, the existence of prior racial discrimination or discriminatory imbalance adversely affecting whites within Starrett City or appellants' other complexes. On the contrary, Starrett City was initiated as an integrated complex, and Starrett's avowed purpose for employing race-based tenanting practices is to maintain that initial integration. Finally, Starrett's quotas do not provide minorities with access to Starrett City, but rather act as a ceiling to their access. Thus, the impact of appellants' practices falls squarely on minorities, for whom Title VIII was intended to open up housing opportunities. Starrett claims that its use of quotas serves to keep the numbers of minorities entering Starrett City low enough to avoid setting off a wave of “white flight.” Although the “white flight” phenomenon may be a factor “take[n] into account in the integration equation,” it cannot serve to justify attempts to maintain integration at Starrett City through inflexible racial quotas that are neither temporary in nature nor used to remedy past racial discrimination or imbalance within the complex. (citation omitted) . . .

We do not intend to imply that race is always an inappropriate consideration under Title VIII in efforts to promote integrated housing. We hold only that Title VIII does not allow appellants to use rigid racial quotas of indefinite duration to maintain a fixed level of integration at Starrett City by restricting minority access to scarce and desirable rental accommodations otherwise available to them. We therefore affirm the judgment of the district court.

JON O. NEWMAN, Circuit Judge, dissenting:Congress enacted the Fair Housing Act to prohibit racial segregation in housing.

Starrett City is one of the most successful examples in the nation of racial integration in housing. I respectfully dissent because I do not believe that Congress intended the Fair Housing Act to prohibit the maintenance of racial integration in private housing.

I.Starrett City is a privately owned apartment complex in Brooklyn. It consists of 46

high-rise buildings containing 5,881 rental units. Nearly 17,000 people live there. From its inception Starrett City has been planned and operated to achieve and maintain racial integration.

The complex was originally to have been built as a cooperatively owned housing development by the sponsor of Co-Op City in the Bronx. When financing was not obtained, the project was taken over by the current owner, whose business was rental

housing. Because New York City had given the previous developer substantial tax abatements, the City's approval was necessary if Starrett City was to have the benefit of these tax abatements. The prospect of a large, low-income rental housing complex generated considerable political opposition within the City from those who feared that the project would attract only minority tenants. The new owner and the New York State Division of Housing and Community Renewal (DHCR) gave assurances that affirmative steps would be taken to maintain Starrett City as an integrated community. On these assurances, the New York City Board of Estimate approved the construction of Starrett City as a rental development.

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At that time, DHCR policy called for an integration goal of 70% majority and 30% minority tenants in state-sponsored projects. The defendants adopted this goal for

Starrett City. Since the size of tenants' families varied, the target percentages reflected the anticipated racial distribution of rental units, rather than of persons living in the complex. To reach its target of racial balance, Starrett City explicitly declined to rent on a first-come, first-served basis. Instead, reacting to the fact that Blacks and other minorities applied for apartments at Starrett City in far greater numbers than Whites, the management imposed ceilings on the number of apartments of various sizes that would be rented to Blacks and other minorities. As the number of tenants of each minority reached the ceiling for a particular size of apartment, subsequent applicants from that minority were placed on a waiting list until sufficient vacancies occurred to permit a rental to a member of that minority without exceeding the established ceiling.

As experience with this rental policy developed, Starrett City decided that it would permit the percentage of apartments rented to minorities to move above 30% and to reach approximately 35%. The components of this aggregate figure are 21% Black, 8% Hispanic, 4.5% Oriental, and 2% other or mixed. These figures have been fairly constant since 1976. During that period the minority percentage of the Starrett City population has been approximately 45%. In 1984, Starrett City agreed, as part of a settlement of a lawsuit brought by a class of Black applicants, to raise the minority rental unit percentage to 38% over five years.

The consequence of Starrett's policy of maintaining racial balance has been that Black applicants constitute a disproportionately larger share of the waiting list for apartments than do Whites, and remain on the list for considerably longer periods of time than do Whites. As of November 1985, Blacks made up approximately 54% of the waiting list while Whites filled approximately 22% of the places on the list. For a two-bedroom apartment, the average waiting time on the list for qualified applicants was twenty months for Blacks and two months for Whites; for a one-bedroom apartment, the comparable figures were eleven months and four months.6

The development of Starrett City as an apartment complex committed to a deliberate policy of maintained racial integration has at all times occurred with the knowledge, encouragement, and financial support of the agency of the United States directly concerned with housing, the Department of Housing and Urban Development (HUD). Under a contract between HUD and Starrett City, the federal government pays all but one percent of the debt service of the mortgage loan extended to Starrett City by the New York State Housing Finance Agency (HFA). By March 1986 HUD had paid HFA more than $211 million on Starrett City's behalf. In exchange for this interest subsidy, Starrett City agreed to limit the rent for eligible tenants to a monthly figure specified by HUD or to a stated percentage of the tenant's monthly income (initially 25%, now 30%),

whichever is greater. In addition, HUD has provided rental subsidies for tenants with low incomes. Since 1981 these rental subsidies have been nearly $22 million a year.

6 Occasionally, the burden of Starrett City's rental policy falls on Whites. The complex designates certain buildings for senior citizens and, during periods when White seniors have applied for these units in greater numbers than Black seniors, White seniors have waited for apartments longer than Black seniors.

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Despite its close cooperation in the development of Starrett City as an integrated housing complex, the United States now sues Starrett City to force it to abandon the rental policies that have enabled it to maintain racial integration. The bringing of the suit raises a substantial question as to the Government's commitment to integrated housing.

7 . . . . Though the terms of the statute literally encompass the defendants' actions, the

statute was never intended to apply to such actions. This statute was intended to bar perpetuation of segregation. To apply it to bar maintenance of integration is precisely contrary to the congressional policy “to provide, within constitutional limitations, for fair housing throughout the United States.” 42 U.S.C. § 3601.

We have been wisely cautioned by Learned Hand that “[t]here is no surer way

to misread a document than to read it literally.” (citation omitted) That aphorism is not always true with respect to statutes, whose text is always the starting point for analysis and sometimes the ending point. But literalism is not always the appropriate approach even with statutes, as the Supreme Court long ago recognized: “It is a familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intent of its makers.” (citation omitted)

Title VIII bars discriminatory housing practices in order to end segregated housing. Starrett City is not promoting segregated housing. On the contrary, it is maintaining integrated housing. It is surely not within the spirit of the Fair Housing Act to enlist the Act to bar integrated housing. Nor is there any indication that application of the statute toward such a perverse end was within the intent of those who enacted the statute. It is true that there are some statements in the legislative history that broadly condemn discrimination for “any” reason. Senator Mondale, the principal sponsor of Title VIII, said that “we do not see any good reason or justification, in the first place, for permitting discrimination in the sale or rental of housing.” 114 Cong.Rec. 5642 (1968). But his context, like that in which the entire debate occurred, concerned maintenance of segregation, not integration. His point was that there was no reason for discriminating against a Black who wished to live in a previously all-White housing project. He explicitly decried the prospect that “we are going to live separately in white ghettos and Negro ghettos.” Id. at 2276. The purpose of Title VIII, he said, was to replace the ghettos “by truly integrated and balanced living patterns.” Id. at 3422. As he pointed out, “[O]ne of the biggest problems we face is the lack of experience in actually living next to Negroes.” Id. at 2275. Starrett City is committed to the proposition that Blacks and Whites shall live next to each other. A law enacted to enhance the opportunity for people of all races to live next to each other should not be interpreted to prevent a landlord from maintaining one of the most successful integrated housing projects in America.

None of the legislators who enacted Title VIII ever expressed a view on whether they wished to prevent the maintenance of racially balanced housing. Most of those who passed this statute in 1968 probably could not even contemplate a private real estate owner who would deliberately set out to achieve a racially balanced tenant population.

7 Though no applicants have been barred from housing because of their race, it is admitted that minority applicants, because of their race, remain on the Starrett City waiting list longer than White applicants.

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Had they thought of such an eventuality, there is not the slightest reason to believe that they would have raised their legislative hands against it. . . .

Congress' desire in providing fair housing throughout the United States was to

stem the spread of urban ghettos and to promote open, integrated housing, even though the effect in some instances might be to prevent8some9members of a racial minority from residing in publicly assisted housing in a particular location. . . .10

Whether integration of private housing complexes should be maintained through the use of race-conscious rental policies that deny minorities an equal opportunity to rent is a highly controversial issue of social policy. There is a substantial argument against imposing any artificial burdens on minorities in their quest for housing. On the other hand, there is a substantial argument against forcing an integrated housing complex to become segregated, even if current conditions make integration feasible only by means of imposing some extra delay on minority applicants for housing. Officials of the Department of Justice are entitled to urge the former policy. Respected civil rights advocates like the noted psychologist, Dr. Kenneth Clark, are entitled to urge the latter policy, as he has done in an affidavit filed in this suit. That policy choice should be left to the individual decisions of private property owners unless and until Congress or the New York legislature decides for the Nation or for New York that it prefers to outlaw maintenance of integration. I do not believe Congress made that decision in 1968, and it is a substantial question whether it would make such a decision today. Until Congress acts, we should not lend our authority to the result this lawsuit will surely bring about. In the words of Dr. Clark:

[I]t would be a tragedy of the highest magnitude if this litigation were to lead to the destruction of one of the model integrated communities in the United States.

Because the Fair Housing Act does not require this tragedy to occur, I respectfully dissent.

Query: What does it mean to say that the FHA is committed to non-discrimination rather than to integration? Whose position do you think best respects the intentions of the legislation? What are the specific situations in which race can be a factor in determining rights to housing? Should it ever be allowed? What role does a prior history of discrimination play, or should it play?

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9

10 The Court faults Starrett City for not adequately explaining the basis for its estimate of the time during which its rental policies would have to be retained in the future in order to avoid segregation. If such an explanation is needed, the Court should remand for a trial so that witnesses can be called to provide it. In any event, the issue is whether Title VIII prohibits what Starrett City is doing today, not whether Starrett City has made an incorrect estimate of what it will have to do sometime in the future to maintain integration.

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City of Memphis v. Greene, 451 U.S. 100 (1981)Supreme Court of the United States

Justice STEVENS delivered the opinion of the Court.The question presented is whether a decision by the city of Memphis to close the

north end of West Drive, a street that traverses a white residential community, violated § 1 of the Civil Rights Act of 1866, Rev. Stat. § 1978, 42 U.S.C. § 1982. . . . The city's action was challenged by respondents, who resided in a predominantly black area to the north. The Court of Appeals ultimately held the street closing invalid because it adversely affected respondents' ability to hold and enjoy their property. 6th Cir., 610 F.2d 395. We reverse because the record does not support that holding.

IMost of the relevant facts concerning the geography, the decision to close the street,

and the course of the litigation are not in dispute. The inferences to be drawn from the evidence, however, are subject to some disagreement.

A. GeographyHein Park, a small residential community in Memphis, Tenn., is bounded on three

sides by thoroughfares and on the west by the campus of Southwestern University. West Drive is a two-lane street about a half-mile long passing through the center of Hein Park. Its southern terminus is a short distance from an entrance to Overton Park, a

large recreation area containing, among other facilities, the municipal zoo.

Its northern terminus is at the intersection of Jackson Ave. and Springdale St., two heavily traveled four-lane avenues. West Drive is one of three streets that enter Hein Park from the north; two streets enter from the east.

The closing will have some effect on both through traffic and local traffic. Prior to the closing, a significant volume of traffic southbound on Springdale St. would continue south on West Drive and then-because of the location of Overton Park to the south of Hein Park-make either a right or a left turn to the next through street a few blocks away, before resuming the southerly route to the center of the city. The closing of West Drive will force this traffic to divert to the east or west before entering Hein Park, instead of when it leaves, but the closing will not make the entire route any longer. With respect to local traffic, the street closing will add some distance to the trip from Springdale St. to the entrance to Overton Park and will make access to some homes in Hein Park slightly less convenient.

The area to the north of Hein Park is predominantly black. All of the homes in Hein Park were owned by whites when the decision to close the street was made.

B. City ApprovalIn 1970, residents of Hein Park requested the city to close four streets leading into

the subdivision. After receiving objections from the police, fire, and sanitation departments, the city denied the request. In its report regarding the application

the city's Traffic Engineering Department noted that much of the traffic through the subdivision could be eliminated by closing West Drive at Jackson Ave.

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Thereafter, on July 9, 1973, members of the Hein Park Civic Association filed with the Memphis and Shelby County Planning Commission a formal “Application to Close Streets or Alleys” seeking permission to close West Drive for 25 feet south of Jackson Ave. The application was signed by the two property owners abutting both Jackson Ave. and West Drive and all but one of the other West Drive homeowners on the block immediately south of Jackson Ave. The stated reasons for the closing were:

“(1) Reduce flow of through traffic using subdivision streets.“(2) Increase safety to the many children who live in the subdivision

and those who use the subdivision to walk to Snowden Junior High School.

“(3) Reduce ‘traffic pollution’ in a residential area, e.g., noise, litter, interruption of community living.”

After receiving the views of interested municipal departments, the County Planning Commission on November 1, 1973, recommended that the application be approved with the conditions that the applicants provide either an easement for existing and

future utility company facilities or the funds to relocate existing facilities and that the closure provide clearance for fire department vehicles. The City Council held a hearing at which both proponents and opponents of the proposal presented their

views, and the Council adopted a resolution authorizing the closing subject to the conditions recommended by the Planning Commission. The city reconsidered its action and held additional hearings on later dates but never rescinded its resolution.

[T]hree individuals and two civic associations, suing on behalf of a class of residents north of Jackson Ave. and west of Springdale St., alleged that the closing [violated § 1982] and prayed for an injunction requiring the city to keep West Drive open for through traffic. . . .

The Court of Appeals recognized that a street closing may be a legitimate and effective means of preserving the residential character of a neighborhood and protecting it from the problems caused by excessive traffic. The Court of Appeals concluded, however, that relief under § 1982 was required here by the facts: (1) that the closing would benefit a white neighborhood and adversely affect blacks; (2) that a “barrier was to be erected precisely at the point of separation of these neighborhoods and would undoubtedly have the effect of limiting contact between them”; (3) that the closing was not part of a city wide plan but rather was a “unique step to protect one neighborhood from outside influences which the residents considered to be ‘undesirable’ ”; and (4) that

there was evidence of “an economic depreciation in the property values in the predominantly black residential area.” . . .

[T]he threshold inquiry under § 1982 must focus on the relationship between the street closing and the property interests of the respondents. As the Court of Appeals correctly noted[,] the statute would support a challenge to municipal action benefiting white property owners that would be refused to similarly situated black property owners. For official action of that kind would prevent blacks from exercising the same property rights as whites. But respondents' evidence failed to support this legal theory. Alternatively, . . . the statute might be violated by official action that depreciated

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the value of property owned by black citizens. But this record discloses no effect on the value of property owned by any member of the respondent class. Finally, the statute might be violated if the street closing severely restricted access to black homes, because blacks would then be hampered in the use of their property. Again, the record discloses no such restriction.

The injury to respondents established by the record is the requirement that one public street rather than another must be used for certain trips within the city. We need not assess the magnitude of that injury to conclude that it does not involve any impairment to the kind of property interests that we have identified as being within the reach of § 1982. . . .

Justice MARSHALL, with whom Justice BRENNAN and Justice BLACKMUN join, dissenting.

[The majority’s] analysis ignores the plain and powerful symbolic message of the “inconvenience.” Many places to which residents of the area north of Hein Park would logically drive lie to the south of the subdivision.11 Until the closing of West Drive, the most direct route for those who lived on or near Springdale St. was straight down West Drive. Now the Negro drivers are being told in essence: “You must take the long way around because you don't live in this ‘protected’ white neighborhood.” Negro residents of the area north of Hein Park testified at trial that this is what they thought the city was telling them by closing West Drive. Even the District Court, which granted judgment for petitioners, conceded that “[o]bviously, the black people north of [Hein Park] ... are being told to stay out of the subdivision.” In my judgment, this message constitutes a far greater adverse impact on respondents than the majority would prefer to believe.

The majority also does not challenge the Sixth Circuit's second finding, that the barrier is being erected at the point of contact of the two communities. Nor could it do so, because the fact is not really in dispute. The Court attempts instead to downplay the significance of this barrier by calling it “a curb that will not impede the passage of municipal vehicles.” But that is beside the point. Respondents did not bring this suit to challenge the exclusion of municipal vehicles from Hein Park. Their goal is to preserve access for their own vehicles. But in fact, they may not even be able to preserve access for their own persons. The city is creating the barrier across West Drive by deeding public property to private landowners. Nothing will prevent the residents of Hein Park from excluding “undesirable” pedestrians as well as vehicular traffic if they so choose. What is clear is that there will be a barrier to traffic that is to be erected precisely at the point where West Drive (and thus, all-white Hein Park) ends and Springdale St. (and the mostly Negro section) begins.

The psychological effect of this barrier is likely to be significant. In his unchallenged expert testimony in the trial court, Dr. Marvin Feit, a professor of psychiatry at the University of Tennessee, predicted that the barrier between West Drive and Springdale 11 . . . Hein Park is bordered on the south by Overton Park, which contains numerous municipally owned outdoor attractions. In fact, the entire central city lies south of Hein Park. Negro residents drive down West Drive for purposes as diverse as going to visit friends and just looking at the scenery.

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St. will reinforce feelings about the city's “favoritism” toward whites and will “serve as a

monument to racial hostility.” The testimony of Negro residents and of a real estate agent familiar with the area provides powerful support for this prediction. As the District Court put it: “[Y]ou are not going to be able to convince

those black people out there that they didn't do it because they were black. They are helping a white neighborhood. Now, that is a problem that somebody is going to have to live with....” I cannot subscribe to the majority's apparent view that the city's erection of this “monument to racial hostility” amounts to nothing more than a “slight inconvenience.” . . .

. . . It is simply unrealistic to suggest, as does the Court, that the harm suffered by

respondents has no more than “symbolic significance,” and it defies the lessons of history and law to assert that if the harm is only symbolic, then the federal courts cannot recognize it. Compare Plessy v. Ferguson, 163 U.S. 537, 551, 16 S.Ct. 1138, 1143, 41 L.Ed. 256 (1896) (“We consider the underlying fallacy of the plaintiff's argument to consist in the assumption that the enforced separation of the two races stamps the colored race with a badge of inferiority. If this be so, it is not by reason of anything found in the act, but solely because the colored race chooses to put that construction upon it”), with Brown v. Board of Education, 347 U.S. 483, 494, 74 S.Ct. 686, 691, 98 L.Ed. 873 (1954) (“To separate them from others ... solely because of their race generates a feeling of inferiority as to their status in the community that may affect their hearts and minds in a way unlikely ever to be undone.... Whatever may have been the extent of psychological knowledge at the time of Plessy v. Ferguson, this finding is amply supported by modern authority”). The message the city is sending to Negro residents north of Hein Park is clear, and I am at a loss to understand why the majority feels so free to ignore it.

Indeed, until today I would have thought that a city's erection of a barrier, at the behest of a historically all-white community, to keep out predominantly Negro traffic, would have been among the least of the statute's prohibitions. Certainly I suspect that the Congress that enacted § 1982 would be surprised to learn that it has no application to such a case. Even the few portions of debate that I have cited make clear that a major concern of the statute's supporters was the elimination of the effects of local prejudice on Negro residents. In my view, the evidence before us supports a strong inference that the operation of such prejudice is precisely what has led to the closing of West Drive. And against this record, the government should be required to do far more than it has here to justify an action that so obviously damages and stigmatizes a racially identifiable group of its citizens. . . .

Query: What do you think motivated the closing of this street? If it was not racial animus, what was it? This case was brought under §1982. Why? What limits does §1982 impose? Why wasn’t this brought under the FHA? Could it have been? What are the differences between the two? Who is engaging the allegedly discriminatory activity here?

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Huntington Branch, NAACP v. Town of Huntington, 844 F.2d 926 (2d Cir.)United States Court of Appeals, Second Circuit, aff’d sub nom. Town of Huntington

v. Huntington Branch, NAACP, 488 U.S. 15 (1988)IRVING R. KAUFMAN, Circuit Judge:Twenty years ago, widespread racial segregation threatened to rip civil society

asunder. In response, Congress adopted broad remedial provisions to promote integration. One such statute, Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3601-3631 (1982 & Supp. III 1985) (“Fair Housing Act”), was enacted “to provide, within

constitutional limitations, for fair housing throughout the United States.” 42 U.S.C. § 3601. Today, we are called upon to decide whether an overwhelmingly white suburb's zoning regulation, which restricts private multi-family housing projects to a largely minority “urban renewal area,” and the Town Board's refusal to amend that ordinance to allow construction of subsidized housing in a white neighborhood violates the Fair Housing Act.

The Huntington Branch of the National Association for the Advancement of Colored People (NAACP), Housing Help, Inc. (HHI), and two black, low-income residents of Huntington appeal from an adverse judgment of the United States District Court for the Eastern District of New York (Glasser, J.), following a bench trial, in their suit against the Town of Huntington (the Town) and members of its Town Board. Appellants allege that the Town violated Title VIII by restricting private construction of multi-family housing to a narrow urban renewal area and by refusing to rezone the parcel outside this area where appellants wished to build multi-family housing. Specifically, appellants sought to construct an integrated, multi-family subsidized apartment complex in Greenlawn/East Northport, a virtually all-white neighborhood. The Town's zoning ordinance, however, prohibited private construction of multi-family housing outside a small urban renewal zone in the Huntington Station neighborhood, which is 52% minority. Thus, appellants petitioned the Town to revise its code to accommodate the project. When the Town refused, appellants brought this class-action to compel the change under Title VIII. . . .

Huntington is a town of approximately 200,000 people located in the northwest corner of Suffolk County, New York. In 1980, 95% of its residents were white. Blacks comprised only 3.35% of the Town's population and were concentrated in areas known as Huntington Station and South Greenlawn. Specifically, 43% of the total black population lived in four census tracts in Huntington Station and 27% in two census tracts in the South Greenlawn area. Outside these two neighborhoods, the Town's

population was overwhelmingly white. Of the 48 census tracts in the Town in 1980, 30 contained black populations of less than 1%.

The district court found that the Town has a shortage of affordable rental housing for low and moderate-income households. The Town's Housing Assistance Plan (HAP), which is adopted by the Town Board and filed with HUD as part of Huntington's application for federal community development funds, reveals that the impact of this shortage is three times greater on blacks than on the overall population. Under the 1982-1985 HAP, for example, 7% of all Huntington families required subsidized housing, while 24% of black families needed such housing.

In addition, a disproportionately large percentage of families in existing subsidized projects are minority. In Gateway Gardens, a public housing project built in 1967, 38 of

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40 units were occupied by blacks and Hispanics in 1984. Seventy-four percent of those on the project's waiting list were minority. In Whitman Village, a 260-unit HUD subsidized development built in 1971, 56% of the families were minority in 1984. Lincoln Manor, which was built in 1980, is a 30-unit HUD Section 8 project. Thirty percent of the households and 45% of those on the waiting list were minority in 1984. Under a HUD Section 8 program, lower income families can obtain certificates to supplement their rent. Each family, however, must locate its own apartment. In January 1984, 68% of families holding certificates and 61% of those on the waiting list were minority.

Although a disproportionate number of minorities need low-cost housing, the Town has attempted to limit minority occupancy in subsidized housing projects. Michael Miness, the Director of Huntington's Community Development agency and responsible for developing the Town's low-cost housing, and Angela Sutton, Executive Director of the Huntington Housing Authority, repeatedly told whites opposing the Lincoln Manor project that they would impose a racial quota on occupancy. When HUD reviewed the project's management plan which established 5% minority occupancy, however, it advised the Huntington Housing Authority that it would not permit a racial quota at Lincoln Manor. The Town similarly attempted to impose racial quotas on occupancy at a proposed 150-unit subsidized housing project in Huntington Station on the Melville Industrial Associates (MIA) site. When Alan H. Wiener, HUD's Area Director, wrote Kenneth C. Butterfield, Town Supervisor, that “limitations on minority occupancy of housing on the Huntington Station site are not justifiable and will not be permitted,” (Letter of June 19, 1981, E-18), the Town Board unanimously passed a resolution withdrawing its support for the project because they could not “ensure a particular ethnic mix.” (Huntington Town Board Resolution re: Huntington Station Urban Renewal Project, June 23, 1981, E-17.)

Under the Town's zoning ordinance, multi-family housing is permitted only in an “R-3M Apartment District.” The relevant portion of section 198-20(A) . . . limits private construction of multi-family housing to the Town's urban renewal area, where 52% of the residents are minority. . . .

The Town's zoning ordinance also includes a special category for multi-family housing for senior citizens called “R-RM Retirement Community District.” Only one such development-Paumanack Village-has been built in Huntington. It is the only multi-family housing for low income people which is situated in an overwhelmingly white neighborhood. The development itself is largely white, having a black occupancy of 3%.

Only one vacant parcel of land in Huntington currently is zoned R-3M and thus would be eligible for the appellants' proposed development: the MIA site, which is at the northeast corner of Broadway and New York Avenue, is partially zoned C-6 and partially zoned R-3M. . . .

In response to the great need for subsidized housing in the Town, HHI decided to sponsor an integrated housing project for low-income families. HHI determined that the project could foster racial integration only if it were located in a white neighborhood outside the Huntington Station and South Greenlawn areas. This decision eliminated consideration of the MIA site, the only vacant R-3M property located in the urban renewal area.

In its effort to create racially integrated, low-cost housing, HHI actively sought the assistance of Town officials. Specifically, HHI's Executive Director, Marianne Garvin,

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and HHI Board members met repeatedly with Michael Miness. In response to Miness's suggestion that HHI pursue rehabilitating existing structures before focusing on new construction, HHI commissioned a study in 1979 to assess whether any of the vacant schools were suitable for the housing project. After narrowing the possibilities to the Green Meadow School, HHI determined that this location was inappropriate for a low-cost housing development. Throughout 1979, Miness assured HHI representatives that existing zoning should not impede their efforts because the Town Board would amend the zoning ordinance if it supported the organization's project.

After a lengthy search, HHI determined that a 14.8 acre parcel located at the corner of Elwood and Pulaski Roads in the Town was well suited for a 162-unit housing project. This flat, largely cleared and well-drained property was near public transportation, shopping and other services, and immediately adjacent to schools.

Ninety-eight percent of the population within a one-mile radius of the site is white. HHI set a goal of 25% minority occupants. The district court found that “a significant percentage of the tenants [at Matinecock Court] would have belonged to minority groups.” HHI officials determined that the property was economically feasible and offered a lengthy option period. . . .

HHI obtained its option to purchase the Elwood-Pulaski parcel on January 23, 1980. . . .

Throughout 1980, HHI sought to advance its project by gaining the approval of the Town Board to rezone the property to R-3M from its R-40 designation. . . . Robert Ralph, a director of HHI, addressed the Town Board on February 26, 1980, at a public hearing. The district court found that he filed a document requesting “a commitment by the Town to amend the zoning ordinance to allow multi-family rental construction by a private developer.” In August 1980, HHI and National Housing Partnership, an owner-manager of federally subsidized housing, filed a joint application with HUD for Section 8 funding for the project.

At the time HHI applied for the Section 8 funding, Huntington had a Housing Assistance Plan, which had been approved by HUD. Pursuant to the provisions of the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301-20 (1982 & Supp. III 1985), when a town has such a plan, HUD must refer a Section 8 application to the Town for comment. In an October 14, 1980, letter to Alan H. Weiner, HUD Area Manager, Town Supervisor Kenneth C. Butterfield set forth seven reasons why Huntington opposed the project. It reads, in pertinent part, as follows:

The Town's professional staff in the Planning, Legal and Community Development Departments have reviewed the proposal and have submitted the following comments:

1. The HUD-approved Housing Assistance Plan (both the three-year goal submitted with the Community Development Block Grant 1979-80 application and the annual goal submitted with the 1980-1981 Community Development Block Grant) contains no “new construction” units as a program goal.

2. The plan for development cannot be carried out within the existing single family R-40 (1 acre) zoning.

3. The development is located at the intersection of two heavily trafficked streets.

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4. The site plan presents a poor parking plan in terms of location with respect to the units, substandard in size and the lack of streets results in very poor fire protection access.

5. The development is located adjacent to both the Long Island Railroad as well as a LILCO substation. This is in addition to the heavy traffic conditions.

6. The site plan shows recreation and/or play areas very inadequate for the number and type of dwelling units being proposed.

7. The three and four-bedroom units are quite undersized; have

poor layout; bedrooms are much too small; living space is unrealistic; no storage; one full and two half-baths for a family of 6 to 8 is not realistic.

In conclusion, I do not recommend HUD approval of this proposal based on the

material reviewed and the comments presented above.When the proposal became public, substantial community opposition developed. A

group called the Concerned Citizens Association was formed, and a petition containing 4,100 signatures against the proposal was submitted to the Town Board. A protest meeting in November drew about 2,000 persons. Supervisor Butterfield was the principal speaker and assured the audience of his opposition to the project. Matinecock Court came before the Town Board at a meeting on January 6, 1981. The Board rejected the proposed zoning change and adopted the following resolution:

WHEREAS, it has been proposed by HOUSING HELP, INC., a private non-profit group, that Huntington's zoning code be changed in order to build 162 federally-subsidized apartments for low to moderate income people at Elwood and Pulaski Roads in the Elwood section of the Town of Huntington; and

WHEREAS, the Town Board has studied the various aspects of the proposal for a zoning change for 162 apartments at the said location of Elwood and Pulaski Roads;

NOW, THEREFORE,THE TOWN BOARD finds that although favoring housing for the senior

citizens and others, in appropriate areas, that the location referred to herein is not an appropriate location due to lack of transportation, traffic hazard and disruption of the existing residential patterns in the Elwood area and requests that the Department of Housing and Urban Development (HUD) reject the application by HOUSING HELP, INC.

Huntington Town Board Resolution re: Housing at Elwood and Pulaski Roads (January 6, 1981).

[T]his case requires what has been called “disparate impact” or “disparate effects” analysis, not “disparate treatment” analysis. A disparate impact analysis examines a facially-neutral policy or practice, such as a hiring test or zoning law, for its differential impact or effect on a particular group. Disparate treatment analysis, on the other hand,

involves differential treatment of similarly situated persons or groups. The line is not always a bright one but does adequately delineate two very different kinds of discrimination claims. . . .

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The prima facie standard for Title VIII disparate impact cases involving public defendants is a question of first impression in this circuit. . . .

Under disparate impact analysis, as other circuits have recognized, 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.” (citation omitted) The plaintiff need not show that the decision complained of was made with discriminatory intent. . . .

Practical concerns . . . militate against inclusion of intent in any disparate impact analysis. [A]s this court noted in Robinson, “clever men may easily conceal their

motivations.” 610 F.2d at 1043 . This is especially persuasive in disparate impact cases where a facially neutral rule is being challenged. Often, such rules bear no relation to discrimination upon passage, but develop into powerful discriminatory mechanisms when applied.

Once a prima facie case of adverse impact is presented, as occurred here, the inquiry turns to the standard to be applied in determining whether the defendant can nonetheless avoid liability under Title VIII. The Third Circuit in Rizzo and the Seventh Circuit in Arlington Heights II have both made useful contributions to this inquiry. Both circuits essentially recognize that in the end there must be a weighing of the adverse impact against the defendant's justification. As phrased by the Third Circuit, the defendant must prove that its actions furthered, in theory and in practice, a legitimate, bona fide governmental interest and that no alternative would serve that interest with

less discriminatory effect. We agree with that formulation. . . . The Seventh Circuit adds two other factors that can affect the ultimate determination on the merits. One factor is whether there is any evidence of discriminatory intent on the part of the defendant. Though we have ruled that such intent is not a requirement of the plaintiff's prima facie case, there can be little doubt that if evidence of such intent is presented, that evidence would weigh heavily on the plaintiff's side of the ultimate balance. The other factor is whether the plaintiff is suing to compel a governmental defendant to build housing or only to require a governmental defendant to eliminate some obstacle to housing that the plaintiff itself will build. In the latter circumstance, a defendant would normally have to establish a somewhat more substantial justification for its adverse action than would be required if the defendant were defending its decision not to build. . . .

The discriminatory effect of a rule arises in two contexts: adverse impact on a particular minority group and harm to the community generally by the perpetuation of segregation. Arlington Heights II, 558 F.2d at 1290. In analyzing Huntington's restrictive zoning, however, the lower court concentrated on the harm to blacks as a group, and failed to consider the segregative effect of maintaining a zoning ordinance that restricts private multi-family housing to an area with a high minority concentration. . . .

Seventy percent of Huntington's black population reside in Huntington Station and South Greenlawn. Matinecock Court, with its goal of 25% minorities, would begin desegregating a neighborhood which is currently 98% white. Indeed, the district court found that a “significant percentage of the tenants” at Matinecock Court would belong to minority groups. The court, however, failed to take the logical next step and find that the refusal to permit projects outside the urban renewal area with its high concentration of

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minorities reinforced racial segregation in housing. This was erroneous. Similarly, the district court found that the Town has a shortage of rental housing affordable for low and moderate-income households, that a “disproportionately” large percentage of the households using subsidized rental units are minority citizens, and that a disproportionately large number of minorities are on the waiting lists for subsidized housing and existing Section 8 certificates. But it failed to recognize that Huntington's zoning ordinance, which restricts private construction of multi-family housing to the largely minority urban renewal area, impedes integration by restricting low-income

housing needed by minorities to an area already 52% minority. We thus find that Huntington's refusal to amend the restrictive zoning ordinance to permit privately-built multi-family housing outside the urban renewal area significantly perpetuated segregation in the Town.

On the question of harm to blacks as a group, the district court emphasized that 22,160 whites and 3,671 minorities had incomes below 200% of the poverty line, a cutoff close to the Huntington Housing Authority's qualification standards. Thus, the district court focused on the greater absolute number of poor whites compared with indigent minorities in Huntington. . . . By relying on absolute numbers rather than on proportional statistics, the district court significantly underestimated the disproportionate

impact of the Town's policy. . . . The parties have stipulated that 28% of minorities in Huntington and 11% of whites

have incomes below 200% of the poverty line. What they dispute is the meaning of these statistics. Judge Glasser found that, as the Town contends, there is no showing of discriminatory effect because a majority of the victims are white. We disagree . . . . Under the Huntington HAP for 1982-1985, 7% of all Huntington families needed subsidized housing, while 24% of the black families needed such housing. In addition, minorities constitute a far greater percentage of those currently occupying subsidized rental projects compared to their percentage in the Town's population. Similarly, a disproportionately high percentage (60%) of families holding Section 8 certificates from the Housing Authority to supplement their rents are minorities, and an equally disproportionate percentage (61%) of those on the waiting list for such certificates are minorities. Therefore, we conclude that the failure to rezone the Matinecock Court site had a substantial adverse impact on minorities.

In sum, we find that the disproportionate harm to blacks and the segregative impact on the entire community resulting from the refusal to rezone create a strong prima facie showing of discriminatory effect. . . . Thus, we must consider the Town's asserted justifications.

Once a plaintiff has made a prima facie showing of discriminatory effect, a defendant must present bona fide and legitimate justifications for its action with no less discriminatory alternatives available. . . . For analytical ease, the second prong

should be considered first. Concerns can usually be divided between “plan-specific” justifications and those which are “site-specific.” “Plan-specific” problems can be resolved by the less discriminatory alternative of requiring reasonable design modifications. “Site-specific” justifications, however, would usually survive this prong of the test. Those remaining reasons are then scrutinized to determine if they are

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legitimate and bona fide. By that, we do not intend to devise a search for pretext. Rather, the inquiry is whether the proffered justification is of substantial concern such that it would justify a reasonable official in making this determination. Of course, a concern may be non-frivolous, but may not be sufficient because it is not reflected in the record.

Appellants challenge both the ordinance which restricts privately-built multi-family housing to the urban renewal area and the Town Board's decision to refuse to rezone the Elwood-Pulaski site. All the parties and the district court judge, however, focused on the latter issue. Indeed, appellees below simply relied on the existence of the Housing Assistance Plan and the zoning ordinance and failed to present any substantial evidence indicating a significant interest in limiting private developers to the urban renewal area. On appeal, appellees now contend that the ordinance is designed to encourage private developers to build in the deteriorated area of Huntington Station. . . . The Town asserts that limiting multi-family development to the urban renewal area will encourage restoration of the neighborhood because, otherwise, developers will choose to build in the outlying areas and will bypass the zone. The Town's goal, however, can be achieved by less discriminatory means, by encouraging development in the urban renewal area with tax incentives or abatements.

Developers are not wed to building in Huntington; they are filling a perceived economic void. Developments inside the urban renewal area and outside it are not fungible. Rather, developers prevented from building outside the urban renewal area will more likely build in another town, not the urban renewal area. Huntington incorrectly assumes that developers limit their area of interest by political subdivision. In fact, the decision where to build is much more complex. Hence, if the Town wishes to encourage growth in the urban renewal area, it should do so directly through incentives which would have a less discriminatory impact on the Town.

We turn next to the Town's reasons rejecting the Elwood-Pulaski site. The

1980 letter written by Town Supervisor Butterfield detailed seven justifications for the Town's refusal to rezone: (1) inconsistency with the Town's Housing Assistance Plan; (2) inconsistency with zoning; (3) traffic considerations; (4) parking and fire protection problems; (5) proximity to the railroad and Long Island Lighting Company substation; (6) inadequate recreation and play areas; and (7) undersized and unrealistic units. As the judge below noted, the first two beg the question because appellants are challenging the Town's zoning ordinance. More significantly, as we have already indicated, the Town simply relied on the existence of the Housing Assistance Plan and the zoning ordinance and failed to present any substantial evidence indicating why precluding plaintiff from building a multi-family housing project outside the urban renewal area would impair significant interests sought to be advanced by the HAP and

the ordinance. The fourth, sixth and seventh problems are “plan-specific” issues which could presumably have been solved with reasonable design modifications at the time appellants applied for rezoning of the parcel. The fifth concern also is largely plan-specific because proper landscaping could shield the project from the railroad and substation.

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Thus, only the traffic issue and health hazard from the substation are site-specific. At trial, however, none of Huntington's officials supported these objections. . . . Accordingly, we find the reasons asserted are entirely insubstantial.

The sewage problem was first raised at trial by appellees' expert Portman. Appellees now advance it as an additional concern. The district court, however, chose not to consider it. We agree. Post hoc rationalizations by administrative agencies should be afforded “little deference” by the courts and therefore cannot be a bona fide reason for the Town's action. Moreover, the sewage concern could hardly have been significant if municipal officials only thought of it after the litigation began. If it did not impress itself on the Town Board at the time of rejection, it was obviously not a legitimate problem. In sum, the only factor in the Town's favor was that it was acting within the scope of its zoning authority, and thus we conclude that the Town's justifications were weak and inadequate.

In balancing the showing of discriminatory effect against the import of the Town's justifications, we note our agreement with the Seventh Circuit that the balance should be more readily struck in favor of the plaintiff when it is seeking only to enjoin a municipal defendant from interfering with its own plans rather than attempting to compel the defendant itself to build housing. As the Arlington Heights II court explained, “courts are far more willing to prohibit even nonintentional action by the state which interferes with an individual's plan to use his own land to provide integrated housing.” Bearing in mind that the plaintiffs in this case seek only the freedom to build their own project, we conclude that the strong showing of discriminatory effect resulting from the Town's adherence to its R-3M zoning category and its refusal to rezone the Matinecock Court

site far outweigh the Town's weak justifications. Accordingly, to recapitulate, we find that the Town violated Title VIII by refusing to amend the zoning ordinance to permit private developers to build multi-family dwellings outside the urban

renewal area. We also find that the Town violated Title VIII by refusing to rezone the Matinecock Court site. We thus reverse the district court and direct entry of judgment in appellants' favor. . . .

Ordinarily, HHI would not be automatically entitled to construct its project at its preferred site. The Town might well have legitimate reasons for preferring some alternative site to the one preferred by HHI. . . .

This case, however, is not ordinary. First, we recognize the protracted nature of this litigation, which has spanned over seven years. Further delay might well prove fatal to this private developer's plans. Second, other than its decision in December 1987 to build 50 units of low-income housing in the Melville section, the Town has demonstrated little good faith in assisting the development of low-income housing. After the Town

began receiving federal community development funds, HUD found it necessary to pressure the Town continually to include commitments for construction of subsidized family housing in the Town's HAPs. Because of the Town's lack of progress in constructing such housing, HUD imposed special conditions on the Town's community development grants for the 1978 fiscal allocation. Thereafter, HUD continued to express its dissatisfaction with the Town's performance. This history, while it does not rise to a showing of discriminatory intent, clearly demonstrates a pattern of stalling efforts to build low-income housing.

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. . . We therefore refuse to remand this case to the district court to determine the suitability of the 63 sites outside the urban renewal area. Rather, we find that site-specific relief is appropriate in this case.

Accordingly, we direct the district court to include in its judgment provision ordering the Town to rezone the 14.8 acre Matinecock Court site located at the corner of Elwood and Pulaski Roads in Huntington Township to R-3M status. The judgment should also order the Town to strike from its R-3M zoning ordinance that portion which limits private multi-family housing projects to the urban renewal area.

Query: What did the Town do wrong here? How was it discriminatory? Is this a facial or an as applied challenge? What laws are alleged to have been broken here? This case is about disproportionate impact. How is that different from discriminatory treatment claims?

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Southern Burlington County NAACP v. Township of Mount Laurel, 336 A.2d 713 (N.J. 1975)Supreme Court of New Jersey

HALL, J.This case attacks the system of land use regulation by defendant Township of Mount

Laurel on the ground that low and moderate income families are thereby unlawfully excluded from the municipality. . . .

There is not the slightest doubt that New Jersey has been, and continues to be, faced with a desperate need for housing, especially of decent living accommodations economically suitable for low and moderate income families. . . .

Plaintiffs represent the minority group poor (black and Hispanic) seeking such quarters. But they are not the only category of persons barred from so many municipalities by reason of restrictive land use regulations. We have reference to young and elderly couples, single persons and large, growing families not in the poverty class, but who still cannot afford the only kinds of housing realistically permitted in most places-relatively high-priced, single-family detached dwellings on sizeable lots and, in some municipalities, expensive apartments. We will, therefore, consider the case from the wider viewpoint that the effect of Mount Laurel's land use regulation has been to prevent various categories of persons from living in the township because of the limited extent of their income and resources. In this connection, we accept the representation of the municipality's counsel at oral argument that the regulatory scheme was not adopted with any desire or intent to exclude prospective residents on the obviously illegal bases of race, origin or believed social incompatibility.

I. The FactsMount Laurel is a flat, sprawling township, 22 square miles, or about 14,000 acres,

in area, on the west central edge of Burlington County. . . . In 1950, the township had a population of 2817, only about 600 more people than it

had in 1940. It was then, as it had been for decades, primarily a rural agricultural area with no sizeable settlements or commercial or industrial enterprises. The populace generally lived in individual houses scattered along country roads. There were several pockets of poverty, with deteriorating or dilapidated housing (apparently 300 or so units of which remain today in equally poor condition). After 1950, as in so many other municipalities similarly situated, residential development and some commerce and industry began to come in. By 1960 the population had almost doubled to 5249 and by 1970 had more than doubled again to 11,221. These new residents were, of course, ‘outsiders' from the nearby central cities and older suburbs or from more distant places

drawn here by reason of employment in the region. The township is now definitely a part of the outer ring of the South Jersey metropolitan area, which area we define as those portions of Camden, Burlington and Gloucester Counties within a semicircle having a radius of 20 miles or so from the heart of Camden city. And 65% Of

the township is still vacant land or in agricultural use.The growth of the township has been spurred by the construction or improvement of

main highways through or near it. The New Jersey Turnpike, and now route I-295, a freeway paralleling the turnpike, traverse the municipality near its base, with the main Camden-Philadelphia turnpike interchange at the corner nearest Camden. State route

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73 runs at right angles to the turnpike at the interchange and route 38 slices through the northeasterly section. Routes 70 and U.S. 130 are not far away. This highway network gives the township a most strategic location from the standpoint of transport of goods and people by truck and private car. There is no other means of transportation. . . .

Under the present ordinance, 29.2% Of all the land in the township, or 4,121 acres, is zoned for industry. This amounts to 2,800 more acres than were so zoned by the 1954 ordinance. The industrial districts comprise most of the land on both sides of the turnpike and routes I-295, 73 and 38. Only industry meeting specified performance standards is permitted. The effect is to limit the use substantially to light manufacturing, research, distribution of goods, offices and the like. Some nonindustrial

uses, such as agriculture, farm dwellings, motels, a harness racetrack, and certain retail sales and service establishments, are permitted in this zone. At the time of trial no more than 100 acres . . . were actually occupied by industrial uses. They had been constructed in recent years, mostly in several industrial parks, and involved tax ratables of about 16 million dollars. The rest of the land so zoned has remained undeveloped. If it were fully utilized, the testimony was that about 43,500 industrial jobs would be created, but it appeared clear that, as happens in the case of so many municipalities, much more land has been so zoned than the reasonable potential for industrial movement or expansion warrants. At the same time, however, the land cannot be used for residential development under the general ordinance.

The amount of land zoned for retail business use under the general ordinance is relatively small-169 acres, or 1.2% Of the total. Some of it is near the turnpike interchange; most of the rest is allocated to a handful of neighborhood commercial districts. While the greater part of the land so zoned appears to be in use, there is no major shopping center or concentrated retail commercial area-‘downtown’-in the township.

The balance of the land area, almost 10,000 acres, has been developed until recently in the conventional form of major subdivisions. The general ordinance provides for four residential zones, designated R-1, R-1D, R-2 and R-3. All permit only single-family, detached dwellings, one house per lot-the usual form of grid development. Attached townhouses, apartments (except on farms for agricultural workers) and mobile homes are not allowed anywhere in the township under the general ordinance. . . . The dwellings are substantial; the average value in 1971 was $32,500 and is undoubtedly much higher today.

The general ordinance requirements, while not as restrictive as those in many similar municipalities, nonetheless realistically allow only homes within the financial reach of persons of at least middle income. The R-1 zone requires a mimimum lot area of 9,375 square feet, a minimum lot width of 75 feet at the building line, and a minimum dwelling floor area of 1,100 square feet if a one-story building and 1,300 square feet if one and one-half stories or higher. . . . The R-2 zone, comprising a single district of 141 acres in the northeasterly corner, has been completely developed. While it only required a minimum floor area of 900 square feet for a one-story dwelling, the minimum lot size was 11,000 square feet; otherwise the requisites were the same as in the R-1 zone.

The general ordinance places the remainder of the township, outside of the industrial and commercial zones and the R-1D district (to be mentioned shortly), in the R-3 zone.

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This zone comprises over 7,000 acres-slightly more than half of the total municipal area[.] Ordinance requirements are substantially higher, however, in that the minimum lot size is increased to about one-half acre (20,000 square feet). (We understand that sewer and water utilities have not generally been installed, but, of course, they can be.) Lot width at the building line must be 100 feet. . . . Presently this section is primarily in agricultural use; it contains as well most of the municipality's substandard housing.

The R-1D district [reduces] the minimum lot area from 20,000 square feet required in the R-3 zone to 10,000 square feet (12,000 square feet for corner lots) but with the proviso that one-family houses-the single permitted dwelling use-‘shall not be erected in excess of an allowable development density of 2.25 dwelling units per gross acre.’ The minimum lot width at the building line must be 80 feet and the minimum

dwelling floor area is the same as in the R-3 zone. . . .

A variation from conventional development has recently occurred in some parts of Mount Laurel, as in a number of other similar municipalities, by use of the land use regulation device known as ‘planned unit development’ (PUD). This scheme differs from the traditional in that the type, density and placement of land uses and buildings, instead of being detailed and confined to specified districts by local legislation in advance, is determined by contract, or ‘deal,’ as to each development between the developer and the municipal administrative authority, under broad guidelines laid down by state enabling legislation and an implementing local ordinance. The stress is on regulation of density and permitted mixture of uses within the same area, including various kinds of living accommodations with or without commercial and industrial enterprises. The idea may be basically thought of as the creation of ‘new towns' in virgin

territory, full-blown or in miniature, although most frequently the concept has been limited in practice, as in Mount Laurel, to residential developments of various sizes having some variety of housing and perhaps some retail establishments to serve the inhabitants.

New Jersey passed such enabling legislation in 1967 which closely follows a model act found in 114 U.Pa.L.Rev. 140 (1965), and Mount Laurel adopted the implementing enactment as a supplement to its general zoning ordinance in December of that year. While the ordinance was repealed early in 1971, the township governing body in the interim had approved four PUD projects, which were specifically saved from extinction by the repealer. . . .

While multi-family housing in the form of rental garden, medium rise and high rise apartments and attached townhouses is for the first time provided for, as well as single-family detached dwellings for sale, it is not designed to accommodate and is beyond the financial reach of low and moderate income families, especially those with young children. The aim is quite the contrary; as with the single-family homes in the older conventional subdivisions, only persons of medium and upper income are sought

as residents. . . . Still another restrictive land use regulation was adopted by the township through a

supplement to the general zoning ordinance enacted in September 1972 creating a new

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zone, R-4, Planned Adult Retirement Community (PARC). . . . The enactment recited a critical shortage of adequate housing in the township suitable ‘for the needs and desires of senior citizens and certain other adults over the age of 52.’ The permission was

essentially for single ownership development of the zone for multi-family housing (townhouses and apartments), thereafter to be either rented or sold as cooperatives or condominiums. The extensive development requirements detailed in the ordinance make it apparent that the scheme was not designed for, and would be beyond the means of, low and moderate income retirees. . . . 12131415161718

All this affirmative action for the benefit of certain segments of the population is in sharp contrast to the lack of action, and indeed hostility, with respect to affording any opportunity for decent housing for the township's own poor living in substandard accommodations, found largely in the section known as Springville (R-3 zone). The 1969 Master Plan Report recognized it and recommended positive action. The continuous official reaction has been rather a negative policy of waiting for dilapidated premises to be vacated and then forbidding further occupancy. An earlier non- governmental effort to improve conditions had been effectively thwarted. In 1968 a private non-profit association sought to build subsidized, multi-family housing in the Springville section with funds to be granted by a higher level governmental agency.

Advance municipal approval of the project was required. The Township Committee responded with a purportedly approving resolution, which found a need for ‘moderate’ income housing in the area, but went on to specify that such housing must be constructed subject to all zoning, planning, building and other applicable ordinances and codes. This meant single-family detached dwellings on 20,000 square foot lots.

(Fear was also expressed that such housing would attract low income families from outside the township.) Needless to say, such requirements killed realistic housing for this group of low and moderate income families.19

The record thoroughly substantiates the findings of the trial court that over the years Mount Laurel ‘has acted affirmatively to control development and to attract a selective type of growth’ and that ‘through its zoning ordinances has exhibited economic discrimination in that the poor have been deprived of adequate housing and the opportunity to secure the construction of subsidized housing, and has used federal, state, county and local finances and resources solely for the betterment of middle and upper-income persons.’12

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19 The record is replete with uncontradicted evidence that, factually, low and moderate income housing cannot be built without some form of contribution, concession or incentive by some level of government. Such, under various state and federal methods, may take the form of public construction or some sort of governmental assistance or encouragement to private building. Multi-family rental units, at a high density, or, at most, low cost single-family units on very small lots, are economically necessary and in turn require appropriate local land use regulations.

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There cannot be the slightest doubt that the reason for this course of conduct has been to keep down local taxes on Property (Mount Laurel is not a high tax municipality) and that the policy was carried out without regard for non-fiscal considerations with respect to People, either within or without its boundaries. This conclusion is demonstrated not only by what was done and what happened, as we have related, but also by innumerable direct statements of municipal officials at public meetings over the

years which are found in the exhibits. . . . This policy of land use regulation for a fiscal end derives from New Jersey's tax

structure, which has imposed on local real estate most of the cost of municipal and county government and of the primary and secondary education of the municipality's children. The latter expense is much the largest, so, basically, the fewer the school children, the lower the tax rate. Sizeable industrial and commercial ratables are eagerly sought and homes and the lots on which they are situate are required to be large enough, through minimum lot sizes and minimum floor areas, to have substantial value in order to produce greater tax revenues to meet school costs. Large families who cannot afford to buy large houses and must live in cheaper rental accommodations are definitely not wanted, so we find drastic bedroom restrictions for, or complete prohibition of, multi-family or other feasible housing for those of lesser income.

This pattern of land use regulation has been adopted for the same purpose in developing municipality after developing municipality. Almost every one acts solely in its own selfish and parochial interest and in effect builds a wall around itself to keep out those people or entities not adding favorably to the tax base, despite the location of the municipality or the demand for varied kinds of housing. There has been no effective intermunicipal or area planning or land use regulation. All of this is amply demonstrated by the evidence in this case as to Camden, Burlington and Gloucester counties. . . . One incongruous result is the picture of developing municipalities rendering it impossible for lower paid employees of industries they have eagerly sought and welcomed with open arms (and, in Mount Laurel's case, even some of its own lower paid municipal employees) to live in the community where they work.

The other end of the spectrum should also be mentioned because it shows the source of some of the demand for cheaper housing than the developing municipalities

have permitted. Core cities were originally the location of most commerce and industry. Many of those facilities furnished employment for the unskilled and semiskilled. These employees lived relatively near their work, so sections of cities always have housed the majority of people of low and moderate income, generally in old and deteriorating housing. Despite the municipally confined tax structure, commercial and industrial ratables generally used to supply enough revenue to provide and maintain municipal services equal or superior to those furnished in most suburban and rural areas.

The situation has become exactly the opposite since the end of World War II. Much industry and retail business, and even the professions, have left the cities. Camden is a typical example. The testimonial and documentary evidence in this case as to what has happened to that city is depressing indeed. For various reasons, it lost thousands of jobs between 1950 and 1970, including more than half of its manufacturing jobs (a reduction from 43,267 to 20,671, while all jobs in the entire area labor market increased

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from 94,507 to 197,037). A large segment of retail business faded away with the erection of large suburban shopping centers. The economically better situated city residents helped fill up the miles of sprawling new housing developments, not fully

served by public transit. In a society which came to depend more and more on expensive individual motor vehicle transportation for all purposes, low income employees very frequently could not afford to reach outlying places of suitable employment and they certainly could not afford the permissible housing near such locations. These people have great difficulty in obtaining work and have been forced to remain in housing which is overcrowded, and has become more and more substandard and less and less tax productive. There has been a consequent critical erosion of the city tax base and inability to provide the amount and quality of those governmental services-education, health, police, fire, housing and the like-so necessary to the very existence of safe and decent city life. This category of city dwellers desperately needs much better housing and living conditions than is available to them now, both in a rehabilitated city and in outlying municipalities. They make up, along with the other classes of persons earlier mentioned who also cannot afford the only generally permitted housing in the developing municipalities, the acknowledged great demand for low and moderate income housing.

II The Legal IssueThe legal question before us, as earlier indicated, is whether a developing

municipality like Mount Laurel may validly, by a system of land use regulation, make it physically and economically impossible to provide low and moderate income housing in the municipality for the various categories of persons who need and want it and thereby, as Mount Laurel has, exclude such people from living within its confines because of the

limited extent of their income and resources. . . . 20

We conclude that every such municipality must, by its land use regulations, presumptively make realistically possible an appropriate variety and choice of housing. More specifically, presumptively it cannot foreclose the opportunity of the classes of people mentioned for low and moderate income housing and in its regulations must affirmatively afford that opportunity, at least to the extent of the municipality's fair share of the present and prospective regional need therefor. These obligations must be met unless the particular municipality can sustain the heavy burden

of demonstrating peculiar circumstances which dictate that it should not be required so to do.21

We reach this conclusion under state law and so do not find it necessary to consider federal constitutional grounds urged by plaintiffs. We begin with some fundamental principles as applied to the scene before us.

Land use regulation is encompassed within the state's police power. It is elementary theory that all police power enactments, no matter at what level of

government, must conform to the basic state constitutional requirements of substantive 20

21 While, as the trial court found, Mount Laurel's actions were deliberate, we are of the view that the identical conclusion follows even when municipal conduct is not shown to be intentional, but the effect is substantially the same as if it were.

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due process and equal protection of the laws. . . . It is required that, affirmatively, a zoning regulation, like any police power enactment, must promote public health, safety, morals or the general welfare. . . .

[A central issue is whose] general welfare must be served or not violated in the field of land use regulation. Frequently the decisions in this state . . . have spoken only in terms of the interest of the enacting municipality, so that it has been thought, at least in some quarters, that such was the only welfare requiring consideration. It is, of course, true that many cases have dealt only with regulations having little, if any, outside impact where the local decision is ordinarily entitled to prevail. However, it is fundamental and not to be forgotten that the zoning power is a police power of the state and the local authority is acting only as a delegate of that power and is restricted in the same manner

as is the state. So, when regulation does have a substantial external impact, the welfare of the state's citizens beyond the borders of the particular municipality cannot be disregarded and must be recognized and served. . . .

This brings us to the relation of housing to the concept of general welfare just discussed and the result in terms of land use regulation which that relationship mandates. There cannot be the slightest doubt that shelter, along with food, are the most basic human needs. . . .

It is plain beyond dispute that proper provision for adequate housing of all categories of people is certainly an absolute essential in promotion of the general welfare required in all local land use regulation. Further the universal and constant need for such housing is so important and of such broad public interest that the general welfare which

developing municipalities like Mount Laurel must consider extends beyond their boundaries and cannot be parochially confined to the claimed good of the particular municipality. It has to follow that, broadly speaking, the presumptive obligation arises for each such municipality affirmatively to plan and provide, by its land use regulations, the reasonable opportunity for an appropriate variety and choice of housing, including, of course, low and moderate cost housing, to meet the needs, desires and resources of all categories of people who may desire to live within its boundaries.

Negatively, it may not adopt regulations or policies which thwart or preclude that opportunity.

It is also entirely clear, as we pointed out earlier, that most developing municipalities, including Mount Laurel, have not met their affirmative or negative obligations, primarily for local fiscal reasons. Governor Cahill summed it up in his 1970 special legislative message, A Blueprint for Housing in New Jersey, supra, at 10-11:

We have reached a point in the State where the zoning criteria in many municipalities is two-fold; dwelling units of all kinds must be curtailed; industrial development must be encouraged. This is a far cry from the original concept of municipal zoning and planning . . . .

The fundamental objective of (the) constitutional amendment and the implementing Municipal Zoning Enabling Act was local control of zoning and planning for the purpose of effecting the public good . . . . The original concept of local planning and zoning never contemplated prohibition in lieu of regulation nor the welfare of the few in place of the general welfare. . . .

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In sum, we are satisfied beyond any doubt that, by reason of the basic importance of appropriate housing and the longstanding pressing need for it, especially in the low and moderate cost category, and of the exclusionary zoning practices of so many municipalities, conditions have changed, and . . . judicial attitudes must be altered . . . to require, as we have just said, a broader view of the general welfare and the presumptive obligation on the part of developing municipalities at least to afford the opportunity by land use regulations for appropriate housing for all. . . .

We turn to application of these principles in appraisal of Mount Laurel's zoning ordinance, useful as well, we think, as guidelines for future application in other municipalities.

The township's general zoning ordinance (including the cluster zone provision) permits, as we have said, only one type of housing-single-family detached dwellings. This means that all other types-multi-family including garden apartments and other kinds housing more than one family, town (row) houses, mobile home parks-are

prohibited. Concededly, low and moderate income housing has been intentionally excluded. While a large percentage of the population living outside of cities prefers a one-family house on its own sizeable lot, a substantial proportion do not for various reasons. Moreover, single-family dwellings are the most expensive type of quarters and a great number of families cannot afford them. Certainly they are not pecuniarily feasible for low and moderate income families, most young people and many elderly and retired persons, except for some of moderate income by the use of low cost construction on small lots.

As previously indicated, Mount Laurel has allowed some multi-family housing by agreement in planned unit developments, but only for the relatively affluent and of no benefit to low and moderate income families. And even here, the contractual agreements between municipality and developer sharply limit the number of apartments having more than one bedroom. . . . The design of such limitations is obviously to restrict the number of families in the municipality having school age children and

thereby keep down local education costs. Such restrictions are so clearly contrary to the general welfare as not to require further discussion.

Mount Laurel's zoning ordinance is also so restrictive in its minimum lot area, lot frontage and building size requirements, earlier detailed, as to preclude single-family housing for even moderate income families. Required lot area of at least 9,375 square feet in one remaining regular residential zone and 20,000 square feet (almost half an

acre) in the other, with required frontage of 75 and 100 feet, respectively, cannot be called small lots and amounts to low density zoning, very definitely increasing the cost of purchasing and improving land and so affecting the cost of housing. As to building size, the township's general requirements of a minimum dwelling floor area of 1,100 square feet for all one-story houses and 1,300 square feet for all of one and one-half stories or higher is without regard to required minimum lot size or frontage or the number of occupants. . . . Again it is evident these requirements increase the size and so the cost of housing. The conclusion is irresistible that Mount Laurel permits only such middle and upper income housing as it believes will have sufficient taxable value to come close to paying its own governmental way.

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Akin to large lot, single-family zoning restricting the population is the zoning of very large amounts of land for industrial and related uses. Mount Laurel has set aside almost 30% Of its area, over 4,100 acres, for that purpose; the only residential use allowed is for farm dwellings. In almost a decade only about 100 acres have been developed industrially. Despite the township's strategic location for motor transportation purposes, as intimated earlier, it seems plain that the likelihood of anywhere near the whole of the zoned area being used for the intended purpose in the foreseeable future is remote indeed and that an unreasonable amount of land has thereby been removed from possible residential development, again seemingly for local fiscal reasons.

Without further elaboration at this point, our opinion is that Mount Laurel's zoning ordinance is presumptively contrary to the general welfare and outside the intended scope of the zoning power in the particulars mentioned. A facial showing of invalidity is thus established, shifting to the municipality the burden of establishing valid superseding reasons for its action and non-action. We now examine the reasons it advances.

The township's principal reason in support of its zoning plan and ordinance housing provisions, advanced especially strongly at oral argument, is the fiscal one previously adverted to, i.e., that by reason of New Jersey's tax structure which substantially

finances municipal governmental and educational costs from taxes on local real property, every municipality may, by the exercise of the zoning power, allow

only such uses and to such extent as will be beneficial to the local tax rate. In other words, the position is that any municipality may zone extensively to seek and encourage the ‘good’ tax ratables of industry and commerce and limit the permissible types of housing to those having the fewest school children or to those providing sufficient value to attain or approach paying their own way taxwise.

We have previously held that a developing municipality may properly zone for and seek industrial retables to create a better economic balance for the community Vis-a-vis educational and governmental costs engendered by residential development, provided that such was ‘. . . done reasonably as part of and in furtherance of a legitimate comprehensive plan for the zoning of the entire municipality.’ (citation omitted) We

adhere to that view today. But we were not there concerned with, and did not pass upon, the validity of municipal exclusion by zoning of types of housing and kinds of people for the same local financial end. We have no hesitancy in now saying, and do so emphatically, that, considering the basic importance of the opportunity for appropriate housing for all classes of our citizenry, no municipality may exclude or limit categories of housing for that reason or purpose. While we fully recognize the increasingly heavy burden of local taxes for municipal governmental and school costs on homeowners relief from the consequences of this tax system will have to be furnished by other branches of government. It cannot legitimately be accomplished by restricting types of housing through the zoning process in developing municipalities. . . .

By way of summary, what we have said comes down to this. As a developing municipality, Mount Laurel must, by its land use regulations, make realistically possible the opportunity for an appropriate variety and choice of housing for all categories of

people who may desire to live there, of course including those of low and

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moderate income. It must permit multifamily housing, without bedroom or similar restrictions, as well as small dwellings on very small lots, low cost housing of other types and, in general, high density zoning, without artificial and unjustifiable minimum requirements as to lot size, building size and the like, to meet the full panoply of these needs. Certainly when a municipality zones for industry and commerce for local tax benefit purposes, it without question must zone to permit adequate housing within the means of the employees involved in such uses. (If planned unit developments are authorized, one would assume that each must include a reasonable amount of low and moderate income housing in its residential ‘mix,’ unless opportunity for such housing has already been realistically provided for elsewhere in the municipality.) The amount of land removed from residential use by allocation to industrial and commercial purposes must be reasonably related to the present and future potential for such purposes. In

other words, such municipalities must zone primarily for the living welfare of people and not for the benefit of the local tax rate.

III The Remedy . . . The township is granted 90 days from the date hereof, or such additional time

as the trial court may find it reasonable and necessary to allow, to adopt amendments to correct the deficiencies herein specified. It is the local function and responsibility, in the first instance at least, rather than the court's, to decide on the details of the same within the guidelines we have laid down. If plaintiffs desire to attack such amendments, they may do so by supplemental complaint filed in this cause within 30 days of the final adoption of the amendments. . . .

. . . The municipality should first have full opportunity to itself act without judicial supervision. We trust it will do so in the spirit we have suggested, both by appropriate zoning ordinance amendments and whatever additional action encouraging the fulfillment of its fair share of the regional need for low and moderate income housing may be indicated as necessary and advisable. (We have in mind that there is at least a moral obligation in a municipality to establish a local housing agency pursuant to state law to provide housing for its resident poor now living in dilapidated, unhealthy quarters.) . . . Should Mount Laurel not perform as we expect, further judicial action may be sought by supplemental pleading in this cause.

The judgment of the Law Division is modified as set forth herein. No costs.

Query: What laws were alleged to have been broken here? What source of law did the court use to strike down the zoning ordinance here? Is this an as applied or a facial challenge? What does it mean to say the zoning is exclusionary? Is there an illegal discriminatory motive behind the Township’s zoning ordinances? Why did the Township pass this zoning ordinance? If there is no discriminatory motive, why is it still a violation of the law?

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