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excerpted from: Bradley Pough, Neighborhood Upzoning and Racial Displacement: A Potential Target for Disparate Impact Litigation?, 21 University of Pennsylvania Journal of Law and Social Change 267 (2018) (197 Footnotes) (Full Document)


Bradley D PoughIn 2014, The New York Times profiled Tranquilina Alvillar, a 50-year old Brooklyn resident who, due to her landlord's avarice, was pushed out of her apartment in the borough's trendy Williamsburg neighborhood. Ms. Alvillar--a low-income Mexican immigrant with a poor command of English--stood by with little recourse as her landlord gradually nudged her apartment into a state of disrepair, “removing building walls and tearing up floors” in hopes that she would leave of her own volition. He soon got his wish, and quickly began renovating the building to make room for tenants able to pay thousands more for the space she once called home. It seems over the course of the decade prior, Williamsburg, once a haven for recent immigrants and lower-income minorities, had become a sought-after destination for young, highly educated, upwardly mobile professionals searching for homes close to Manhattan. As generally occurs during this process, landlords, developers, and investors took note of the neighborhood's changing demographics and capitalized on it. Residents like Alvillar were caught in their crosshairs.

However, The New York Times article depicts a bundled Alvillar standing triumphantly on the street in the heart of Williamsburg because, unlike most in her situation, Alvillar's story ended victoriously. After a protracted and contentious legal battle against the landlord, the Housing Court ruled that Alvillar had been “illegally locked out” and ordered that she be allowed to return. But for many in Alvillar's situation, their stories do not end positively. Theirs are stories of displacement; tales becoming more common in New York neighborhoods like Williamsburg, Harlem, and Chinatown. As residential patterns change, these once strong minority enclaves are growing whiter, richer, denser, and more expensive than at any point in recent history. With higher earners moving into these changing communities, long-time residents like Alvillar are being pushed out by forces that are not always as easily identified as an unscrupulous landlord. In those situations, little recourse exists to remedy their upheaval.

The literature on displacement--and its some-time precursor, gentrification voluminous. Countless scholars and social commentators have written about the recent wave of changing urban centers in cities like New York, Washington, D.C., Oakland, and Los Angeles. However, while commentary on this phenomenon abounds, little consensus exists on its precise causes. Some scholars present gentrification-fueled displacement as symptom of myriad economic forces that are hard to identify. Others instead focus on the actors most clearly at fault for particular instances of displacement, including landlords and the developers of new luxury residences that have quickly come to characterize gentrifying neighborhoods. Few scholars, however, have focused on the role that local governments can play in fueling gentrification and displacement. Cities, in their capacity as the chief architects of our country's zoning policy, certainly have an outsized role in shaping the development patterns of our urban centers. While much has been written about exclusionary zoning's ability to keep particular demographics out of neighborhoods, few have fully explored the way that liberal zoning policies (i.e. upzoning can precipitate a demographic influx into a neighborhood (as well as the resulting wave of displacement that comes afterward).

Similarly, while much has been written about the policy prescriptions for gentrification and displacement, little exists on legal solutions to these vexing challenges. Interestingly, several scholars and advocates are now looking to a recent Supreme Court decision, Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc. (Inclusive Communities Project), as one possible avenue for legal redress. In Inclusive Communities Project, the Court established that disparate impact claims were cognizable under the Fair Housing Act (FHA). Despite circuit court unanimity on the issue, until the Inclusive Communities Project decision, Supreme Court jurisprudence only recognized claims of housing discrimination grounded in actions that were on their face discriminatory. With this ruling, the Court affirmed that it would also recognize housing discrimination claims brought against facially neutral actions that, nevertheless, had disparate negative impacts on a protected class. In the wake of this decision, several housing discrimination cases have brought disparate impact claims using the Court's guidance on the issue. And yet, despite rumblings about the possibility of disparate impact litigation against municipal upzoning decisions, no litigant or scholar has explored this issue fully.

This paper aims to fill these existing gaps in the literature in two ways. First, this paper aims to tease out the relationship between liberal zoning policies and gentrification/displacement. By focusing on research done in several gentrifying New York neighborhoods, this paper looks to establish a framework of causality between upzoning decisions and displacement upon which a hypothetical disparate impact claim could rest. Second, this paper aims to explore the legal merits of such a claim. After outlining the Supreme Court's analysis in Inclusive Communities Project, this paper endeavors to show that, while potentially attractive, disparate impact claims against urban upzoning policies will likely not succeed, given the current state of Fair Housing jurisprudence.

Before proceeding, it is important to address why an ostensibly unsuccessful litigation strategy warrants such extensive academic analysis. First, as stated previously, housing advocates are currently looking to disparate impact theory as a possible vehicle for addressing issues with urban upzoning. This strategy therefore warrants a thorough vetting before public interest litigants expend considerable time, money, and energy into a case set for failure. Second, and perhaps most important, the urban upzoning hypothetical helps illustrate the ways in which the Court's decision in Inclusive Communities Project actually limits the reach of disparate impact claims under the FHA. By refining the test for how litigants prove disparate impact, the Court actually established how difficult a bar this is to clear. Urban upzoning presents a paradigmatic example of a policy that seems to cause a disparately discriminate impact, but does not reach the Court's strict requirements for what actually constitutes causation. In that way, this hypothetical could serve as a case study for all future disparate impact litigants interested in establishing a convincing prima facie showing of racial discrimination.

This paper will proceed in four parts.

Part I explores the relationship between zoning and racial exclusion, briefly discussing the more traditional ways in which zoning policy has disadvantaged low income minorities (i.e. exclusionary zoning and expulsive zoning), before turning to a more in-depth discussion of the ways upzoning policies can potentially cause racially discriminatory displacement.

Part II then turns to the existing case law on the subject, recounting the ways that federal courts have historically viewed the relationship between zoning and racial discrimination, before shifting to a discussion of how that landscape has changed (or not changed) in a post-Inclusive Communities world.

Part III bridges the content of the two previous sections by taking a hypothetical case against urban upzoning through the Supreme Court's current test for disparate impact discrimination. This Part will argue that, given the current case law on the topic, resting this kind of discrimination claim on disparate impact theory will likely prove unsuccessful.

Part IV concludes with possible alternative mechanisms for addressing urban displacement, specifically focusing on potential policy changes to municipal zoning processes that might result in a more sensible and equitable housing landscape.

. . .

Just because the City's upzoning policy would likely survive a disparate impact claim does not diminish the very real inequities these policies can cause for many of New York's most vulnerable citizens. The law is often an unfortunately blunt tool, and is not necessarily the best mechanism for effecting change in every case. Instead, lawmakers and housing advocates should focus their attention on creative policy solutions to the multifaceted problems of gentrification and displacement. By championing reforms that reframe the way we think about housing and encourage neighborhood-level development decisions, concerned policymakers may be able to inject a modicum of equity into our otherwise unequal national housing policy.

One potential reform, championed by authors Angotti and Morse, is an unequivocal reaffirmation of housing as a public good. Historically, for example, the primary mechanism for providing affordable housing in cities like New York was through units owned, operated, and maintained by the public. Municipal housing authorities across the country each housed tens of thousands of people in units that were permanently affordable for low-income and working-class residents. Changes in neighborhood demographics or land use designations did not threaten that permanence--those units were guaranteed by the government and therefore largely insulated from any economic tumult occurring in the traditional housing market.

Today the distinction between public and private housing is falling apart. Many of the substantive reforms in the affordable housing world are occurring under the guise of “public-private partnerships.” These privately facilitated policies, like inclusionary zoning, lack many of the protections and advantages inherent in a more traditional public housing regime. For example, while inclusionary zoning programs aim to counteract the lack of new affordable public housing units, in practice they often end up serving a demographic noticeably wealthier than the intended recipients of the original public housing programs. While the lack of affordable middle-income housing is certainly an issue in places like New York, simply replacing much needed low-income units with middle-income units does little to stem the tide of displacement blanketing many urban neighborhoods.

Skeptics will no doubt argue that truly affordable public housing is simply not a financial reality for most cities. With federal and state governments curbing many of their traditional investments in those types of programs, cities have no choice but to turn to the private sector for a suboptimal alternative. However, this ostensibly pragmatic resignation ignores many of the encouraging innovations succeeding at securing permanently affordable housing around the country. For example, community land trusts in cities like Boston, Durham, and Albuquerque have illustrated that local, pubic control of traditionally private assets can go a long way to providing meaningful homeownership opportunities for low-income Americans. Under this model, locally managed community organizations retain ownership of neighborhood land that they then use to build and sell homes at significantly lower-than-market prices. By removing the cost of land from the construction equation, these organizations have been able to develop an ecosystem of truly affordable housing in some of the most desirable urban locations. Community land trusts have shown that by returning to a model centered on public ownership, cities are still making good on the promise of economic inclusivity.

Another potential avenue for reform seeks to empower local voices in the zoning process. At its core, the community-based planning movement simply asserts that residents living in areas slated for change ought to have some real say in how their neighborhoods develop. Achieving this admittedly modest goal requires two formal concessions from city governments. First, it requires that large city governments create neighborhood planning councils with real power to drive zoning change. Although some form of neighborhood planning council exists in most major American cities, these bodies often exercise little more than advisory powers in the zoning process. While full veto power almost certainly is not appropriate, the ability to cast votes of consequence over the changes occurring in their neighborhoods is necessary for ensuring that municipal policies do not completely trample local considerations.

Second, true community-based planning requires community plans with actual teeth. New York is one of the few major American cities without an overarching comprehensive plan. While many neighborhoods have local plans for how they want to structure future development, these plans do not carry the force of law and amount to little more than “wish lists” for policymakers to ignore. For community-based plans to carry any real consequence, courts and city leaders should follow Professor Haar's advice and treat them as “impermanent constitution[s]” that trump parcel-level zoning designations when conflicts arise. This ensures that the overarching vision for a neighborhood (and a city) remains intact as policymakers go about the business of making isolated zoning decisions.

Neither of these changes will, by themselves, be able to reshape our unequal and unstable housing market. Nor will securing either of these changes prove easy. Enacting change through the political branches invariably requires time, money, and energy for the mere hope of success. Part of the seduction of sweeping judicial decisions is that they allow us to avoid the messiness of politics: crafting a sound argument, presenting it to the right judge, and waiting for change to follow. But, as I hope this paper illustrates, not all change is best served by judicial action. While addressing the inequities in urban land use policy through disparate impact litigation may seem attractive, that vehicle is not likely to secure the kind of changes we seek. Instead, lawmakers and housing advocates should prepare to put in the hard work of effecting political change in our cities' zoning systems. We should not settle for anything less.