NIMBYism: Using the Fair Housing Act to Overcome Municipal Opposition
By Caitlin Jones & A. J. Johnson
6 min read
By Michael Allen, Esq., Relman & Dane, PLLC
Tax Credit Advisor April 2009: Developers using the low- income housing tax credit (LIHTC) are no strangers to the NIMBY (“Not In My Back Yard”) syndrome. In some communities, the mere hint of an affordable housing proposal generates a kind of massive resistance reminiscent of the worst, old Jim Crow days. And that is no historical accident, because it is often the apprehension that new tenants will be people of color (or families with children) that gives rise to NIMBYism. In response, municipal officials often require developers to consult with opponents before seeking zoning and land use approval. The ensuing delay is often fatal to affordable housing development.
Such municipal practices may violate the federal Fair Housing Act (FHA).
What are the Fair Housing Act (FHA) provisions of greatest use to developers facing municipal opposition? Two lawsuits being litigated by my firm highlight ways to enforce FHA rights in creative ways.
Enacted in 1968, the FHA broadly prohibits housing discrimination on the basis of race, color, religion and national origin (the original “protected classes”).1 It applies to all kinds of housing (whether federally funded or not) and prohibits both intentional discrimination and neutral policies and practices that have a harsher effect on members of a protected class. The FHA permits any party affected by discrimination à including developers à to sue for monetary damages and injunctive relief. Developers around the country have successfully challenged discriminatory barriers to the expansion of affordable housing.
The FHA also requires the U.S. Department of Housing and Urban Development (HUD) to administer its funding programs “in a manner affirmatively to further the policies of [the FHA].” The obligation to affirmatively further fair housing (AFFH) applies to every dollar of every HUD program, regardless of how many times it is passed on to another recipient. All 50 states and more than 1,150 local governments that are direct recipients of Community Development Block Grant and HOME funds have AFFH obligations, as do several thousand that receive such funds from state allocations or urban county consortia. The federal courts have repeatedly explained that the AFFH obligation requires recipients to take affirmative steps to identify and overcome all impediments to fair housing choice in their geographic boundaries, whether caused by government or by the private sector.
When developers are facing deadlines imposed by the LIHTC program or other funding sources, the legal leverage available through the FHA’s non-discrimination and AFFH provisions may be critical to dismantling municipal barriers. Because of ongoing work in the cases mentioned below, municipalities are much more concerned about their potential liability under the FHA for zoning and land use provisions that delay the development of affordable housing. Increasingly, LIHTC developers and their legal counsel will be able to build on the momentum of these cases to resolve development disputes without litigation.
Pending Litigation
My firm represents the plaintiffs in Greater New Orleans Fair Housing Action Center v. St. Bernard Parish,2 which began with an FHA challenge to an ordinance restricting rentals of single family homes to “blood relatives” of the owner. Because the parish is 93% white, the ordinance had the effect of excluding people of color from the rental market. The matter was resolved in February 2008 by a consent order requiring the parish to repeal the ordinance and providing that the parish would not “otherwise make unavailable or deny a dwelling unit, to any person because of race or national origin” or “retaliate against Plaintiffs or any other person who alleges that Defendants have violated the Fair Housing Act.”
Five months later, in the face of strong community opposition, the parish adopted a moratorium on all multifamily housing developments. We were contacted by, and now represent, Provident Realty Advisors (PRA), whose four LIHTC projects were stopped in their tracks by the moratorium. PRA has intervened in the lawsuit to press its own claims under the FHA that the moratorium diminishes housing opportunities for African-Americans in greater New Orleans, who are more likely to live in rental housing on account of their lower incomes. PRA has asked the court to proceed directly to a determination of whether the moratorium is a violation of the consent order, which can be punished as contempt of court. By building on the legal platform constructed by an advocacy organization and its law firm, the developer has shaved at least a year off the time necessary to litigate its claims.
My firm is also litigating United States ex rel. Anti-Discrimination Center v. Westchester County, New York, 3 a civil rights case brought under the federal False Claims Act (FCA). In an opinion dated February 24, 2009, a federal judge determined that, during a six-year period, the county had falsely certified more than 1,000 times that it was in compliance with its obligation to analyze and overcome race-based impediments to fair housing choice when, in fact, the county ignored these impediments altogether. All that remains for a trial, currently scheduled for early May 2009, is the question whether the County “knowingly” made these false certifications. The FCA provides for treble damages, permits a private party to sue in the name of the United States, and awards up to 30% of the damages awarded to the private party that ferrets out the fraudulent behavior and litigates the case. The county took in $52 million over a six-year period, so the lawsuit seeks damages of $156 million plus attorney’s fees.
During the litigation, we have uncovered information about how the county perpetuated racial segregation by permitting wealthier, predominantly white towns and villages to impose zoning and land use policies and practices that made multifamily development impossible and effectively steered LIHTC developments to disadvantaged neighborhoods with high minority populations and diminished opportunities. As a result, the county has remained dramatically segregated on the basis of race, and millions in federal funds have been used to perpetuate, rather than dismantle, segregation.
The Westchester litigation has gotten the attention of thousands of municipal recipients of federal housing funds, who are concerned about their own potential liability for AFFH violations. Every one of these recipients is required to involve the public in an “Analysis of Impediments” to fair housing choice, and to take a hard look at how its own policies discourage such choice. Municipalities whose zoning, land use and building ordinances or practices discourage affordable housing for members of FHA protected classes are required to identify such impediments and take appropriate actions to overcome them. Those who fail to do so face suspension or termination of federal funds and potential liability under the FCA. LIHTC developers should benefit from this increased apprehension to secure municipal cooperation on affordable housing projects.
Michael Allen is Counsel with the civil rights law firm of Relman & Dane, PLLC. The firm specializes in fair housing and fair lending issues, and has extensive experience working with affordable housing developers to overcome community opposition and zoning and land use barriers. He may be reached at 202-728-1888, [email protected].
