QUESTION TYPE 2: CRITIQUE OF STATUTE

QUESTION 2A: COMMENTS

On this question, I was looking for three things: substantive analysis of the provision as written, suggested substantive changes and suggested technical changes. Nobody did all three well. The model answers make some pretty good points but are not exceptional.

A number of students got led astray by the mention of quotas. The official line by many conservatives about disparate impact analysis is that it creates “quotas,” by which they mean mandatory miniminum numbers of members of protected classes. The type of quotas at issue in the Question are not the kind raised by StarrettCity. The suggested amendment has nothing to do with StarrettCity. The amendment deals with disparate impact analysis. StarrettCity is a Disparate Treatment case: the policy is not facially neutral, but rather facially discriminatory.

QUESTION 2A: STUDENT ANSWER #1

This proposed bill is an unsurprising attempt to reconcile the doctrines of discriminatory intent vs. discriminatory effect tests. The problem with intent is that it is too narrow a test and the problem with effects is that it is too broad. The substance of the bill is understandable, but not the best solution to the problem. The attempt to compromise and limit effects test to government entities ignores the fact that equally egregious actions are often committed by non-government entities. Proving intent is always going to be difficult because (1) it is very easy to successfully conceal intent, and (2) it is now becoming not politically correct or fashionable to discriminate overtly.

Consider the effect of this bill on future victims of housing discrimination who are blatantly victimized by facially neutral practices (like the all adult conversion of a building with predominantly black mothers). Also neutral practices like private advertisements using all-white models would no longer be actionable with the new amendment. Practices like this are contrary to the sprit of the legislation and victims should not be precluded from stating a cause of action because they can’t show intent. This change might encourage private entities to discriminate and simply cover their tracks.

Proponents of the bill may have valid arguments based on over-broad effects tests and judicial efficiency. Although efficiency of process and ease of administration are valid concerns, they don’t outweigh the need to provide a remedy to victims of subtle but devastating discriminatory housing practices.

I would suggest the following substantive changes to the bill: Allow intent test to be met if a reasonable person in the minority’s position would consider the defendant’s practice to be racially offensive. Although this leaves some room for judicial discretion that may be problematic, it is a more favorable alternative than this bill. Judges and fact-finders are capable of assessing “average person” standard as evidenced by various tort principles, so this test will be relatively successful in striking a more appropriate balance between the effect vs. intent test. Subjectivity won’t undermine the effectiveness of this test.

Drafting:-- too wordy. Clarity is sacrificed

-- sections more clearly delineated

-- listing might cause confusion

QUESTION 2A: STUDENT ANSWER #2

A. Pros and Cons of Bill: Disparate Impact Analysis (DIA) has mainly been used for class action suits (Betsy, Huntington,) where the defendant has been a government-run organization. In Huntington a municipality was defendant (Zoning in a white suburb; did not want to sell land to public housing.) In this case DIA is useful because its easier to conceal motivation of discrimination when dealing with big bureaucracies. The bad intent might not be there (as is required for disparate treatment claims) but the result could be the same -- policies that have a negative impact on minorities or protected class members. The main source of evidence in a DIA is statistics which can easily be done with local/state/federal government because of records kept. So by limiting DIA to governments, DIA claim will survive or not too much will be excluded. DIA was intended for the type of bureaucracies that could discriminate unintentionally but still have negative effects because of underlying facially neutral policies. Huntington

But bureaucratic hidden discrimination is not only limited to governmental entities. In Betsy, it was a Turtle Creek Association that discriminated against families with children. They were a 3-story high rise apartment building which tried to confine families (and race) to a particular area. Even larger corporations that own buildings would not be subject to a DIA. Even though DIA would apply to government entities, it still leaves out private large entities that also could not intentionally discriminate but have a negative impact such as in Betsy.

However, seeing how the Republicans want to get rid of DIA altogether, something is better than nothing.

Drafting changes: (1) Let’s take out §2 altogether. There is little confusion re: DIS/impact and DIS/treatments analysis. DIA deals with no intent /statistics/class action suits, other deals with bad intent. They are very different approaches; to put in §2 would be redundant, waste of space and unnecessary.

(2) On §1 “In determining ... has occurred” is too wordy. Take it all out. Start with “Disparate Impact Analysis...” Since 3604(g)(1) is at end of section it is assumed it refers to violations of 3604. If that is not clear say: “Pertaining to violations in this section, disparate... Also in (1) a problem could arise with phrase “shall only be applied”: ‘shall’ denotes no discretion = DIA that will be used. Could other approaches be used, besides DIA? What if you don’t want to use DIA? Shall should be replaced by may “may be” implied discretion and flexibility. People like that. Also, DIA should be defined DIA: involves differential treatment of similarly situated persons or groups that fall into protected class status defined by FHA.

(3) Another problem with 3804(g)(1) is what about organizations which the government has contracted out to some housing. Are they included?

QUESTION 2B: SAMPLE ONLY; NO MODELS

QUESTION 2C: COMMENTS

Almost everyone who answered this question made some interesting points, and a few of you had a lot of good ideas. I rewarded people who tried to address all four questions asked, who tried to see arguments on both sides of the first two questions, who read the amendment carefully, and who provided some thoughtful analysis or suggested changes.

On the question of legality under federal law, I was looking for recognition that any race-conscious remedy might be considered illegal, but that this remedy might pass muster because it didn’t directly exclude anyone from housing and applied to people of any race. In short, the amendment is more likely to pass muster than the program StarrettCity, but is arguably somewhat more exclusionary than the program in South Suburban.

Among the technical changes I thought might be needed were definitions of “race” and of “areas.” The structure of the amendment is also a bit peculiar in that Asian-Americans in Missouri might be eligible for the additional subsidy in every single neighborhood in the state, which may not be the intended result.

The model answers do a good job suggesting some of the pros and cons and some possible substantive changes. Some of you got into trouble by raising complaints or suggesting changes that seemed to misunderstand what the amendment is trying to do. Several of you, for example, suggested eliminating all reference to race. Who then receives the additional subsidy? Everyone? Then you have just increased the amount you are spending statewide without doing anything about segregation. If you mean the additional subsidy only goes to some people, you have to make clear who they are. Several others suggested the importance of putting time limits on the transfer payments so the recipients don’t become dependent. However, the subsidy is going to pay the downpayment on a house. The recipients only get it once. You hardly need to worry that they’ll become dependent. Moral of the story is read more carefully and think about what I’m asking. Those of you who started writing right away and left early may have hurt yourselves with errors like these.

QUESTION 2C: STUDENT ANSWER #1

I. FHA: The proposed amendment conforms with the goals and spirit of the FHA which is to prohibit discrimination and promote integration. The amendment’s awarding of additional percentages of money based on a two tiered race analysis helps to achieve this. Even though the awards are based on race, which would be prohibited under a literal reading of the act, this affirmative marketing with race conscious efforts to promote integration of the area is within the scope and spirit of the ad. The amendment seems to have the effect of “steering” certain races to particular areas, an act prohibited under §3604(a) & (d) of the act. It is not rejecting these people, though; and the end result is a more integrated area. There is a history of hypersegregation in the area which justifies taking an affirmative marketing approach to eradicate it. The awards act as remedies to the past history of discrimination of minorities financially. These incentives to purchase homes in the areas, based on your race, may not be as neutral a policy such as the deduction of mortgage interest for homeowners, but it pursues a noble goal too, and doesn’t indirectly exclude people with such damaging results. People who are of the rate that is more than 30% of the area are still entitled to a subsidy. The ten and five percent additional amounts are not unreasonable or grossly disproportional to the social harm. They are meant to cure. (Milliken)

II. Pros & Cons: The obvious “pro” of the amendment is that it tries to affirmatively address and cure a pervasive and devastating social ill. It is a creative approach to creating an integrated balanced community in a state with hypersegregation plaguing its major cities. The effect of this hypersegregation damages the state’s people and economy. Enacting this amendment would benefit people of all races and socio-economic backgrounds. The cycle of keeping segregated neighborhoods that abound with crime, unemployment, single parenthood, drugs, etc. would be attacked and broken.

There are some negative aspects of the amendment. If, through the program there becomes a population of 30% of a particular minority, so subsidies stop for that race, will additional members of that race be discouraged from living there? Does the subsidy system create an unfair advantage for the first come, first serve people that take advantage of the program first? This “problem” can be viewed another way in that the later parties will be forced to seek out a new community where they will add to the minority base -- a possible “pro.”

Another con is that it discourages whites from moving into most communities because they will always be the majority. We have learned that most whites have indicated they would not be comfortable living in an area where they would be a 30% minority. Realistically then, you are not going to increase the number of whites that more to an all black area. The result may tend to be a “white flight” reaction to the integration of their existing neighborhoods.

III & IV. Substantive Changes/Drafting: There definitely needs to be a specific time period articulated to maintain control over the program. A second change would be a very expanded definition of the “area” in which the program would be in effect. As the “quotas” are filled the program should be discontinued so that it does not have an adverse effect of keeping out non-minorities that want both a particular area with the integrated result. Furthermore, I would replace the very forceful words “are entitled to” to a more flexible, “may be eligible for.” This could prevent fraudulent claims and allow to government a mechanism to deny certain groups who would try to take advantage or scam the program.

But, the most important substantive change I would suggest would be to expand the amount of the subsidy. I think that would have the most profound effect of ensuring the success of the program. The system is basically trying to pay off minorities to move into areas that may seem unfriendly, hostile and dangerous. So, make it really worth their while to do it. Increase the subsidies to 15 and 20 percent.

Then it would speed up the rate of integration, surely. The policies of the government, like allowing redlining, that created the situation must be redressed. Certainly enough money has historically been denied to minorities to more than justify an increase in these additional subsidies.

In terms of drafting, I would:

  • Eliminate #2, combining it into #1. The two of them are repetitious and verbose.
  • The order of the wording in #2 is also confusing. It is more clear to say more than 15% but less than 30%, not vice versa.
  • Need definitions of “area” and “population.” Does, for example, the population include people that commute to and from “The area for work or just home owners? What about apartment dwellers? Does their transient nature preclude them from being counted?”

All of these definitional issues need clarification. The last idea would be to add a length of residency requirement so minorities couldn’t just churn homes because of subsidies.

QUESTION 2C: STUDENT ANSWER #2

FHA: The proposed statute would likely pass FHA muster. A major purpose of the FHA is to affirmatively promote integration. (See also StarrettCity, Otero, & SSHC). This act does no harm to any party -- it only aids parties. Although its possible that a white party may claim harm to his property rights/values, its unlikely that the courts will give credence to such an argument.

1982: Unlike FHA, 1982 requires discriminatory intent (SeeArlington Heights). Similar to FHA, §1982 purpose was to extend rights to African American citizens. The proposed legislation appears consistent with that purpose.

Pros & Cons: The proposal is facially neutral -- a big plus. One scholar, Roisman, suggests that white integration of predominately black areas is an important step in addressing this segregation problem. The Act uses both class and race for its underpinnings. This is a critical link to achieving true success in the public policy efforts to promote integration according to American Apartheid. The program also is similar to the Gatreaux mobility program in the Chicago area. That program has been almost universally applauded by scholars.

On the con side some such as Roisman may criticize the program as not going far enough. Although ECHO may assist higher income African Americans who can qualify and afford mortgages the poor ghettoized areas would likely become further isolated and concentrated. Roisman would also argue that the subsidies should be deep. The ECHO plan, which only addresses the down payment, may be considered too shallow.

Also, ECHO does not include those who rent -- any significant impact on segregation would need to include rental housing as well. (See American Apartheid) Some of the other cons are those often heard on similar legislation - this is costing the taxpayers money -- too much -- or that this is nothing more than another liberal attempt at social engineering bound to fail. I suggest we look at ways to cost shift to builders and/or those who discriminate and ignore those who criticize without a better plan of action of their own.

Drafting Changes: I recommend that the “or” in #2 be changed to an “and.” A loophole would otherwise be created defeating the purpose of the act. Also, the term “area” should be defined narrowly with a relatively small unit to prevent sub-area segregation.

Substantive Changes: I would recommend the deeper subsidies (i.e. to mortgages payments.) and extending the program to renters. Also, you should consider adding specific protections to people who use vouchers and subsidies to pay for housing. Rosenbaum (cited in Roisman’s piece) recommends additional assistance with employment, educational or job counseling, childcare, transportation, etc. to produce even more encouraging results than Gautraux.

QUESTION 2D: STUDENT ANSWER #1

To begin with, as a legislative assistant, I would add a preamble to the proposed amendment re-asserting the goals of the FHA, and applying these goals to the proposed amendment (“P.A.”). This might soothe fears of a Republican bringing forth an amendment to the FHA.

There are a number of technical changes that the P.A. would benefit from. a) “It” should be replaced with “A significant financial cost to the defendant.” This change would provide clarity such that 1) would read “A sig. financial cost to the defendant may be a defense to an action against a non-government defendant.” The clarity helps establish an economic exception defense under the FHA for private defendants.

Of course, the words “significant,” will need a formal definition, as will “financial cost”. Financial cost may or may not include a decrease in property values -- a formal definition would help clarify. Further, “shall” should be changed to “may”, since the defense is a permissive defense and not a command from the legislature. To help clarify, examples of what this P.A. considers “significant” and “financial costs” would give courts guidance in the construction of this amendment. Further, amendments which provide exceptions to remedial statutes are generally interpreted in a limited fashion. The extent of the limitation of the exception should be included in the R.A., not just the situations of which this P.A. would apply.