PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 11-1159
_____________
MT. HOLLY GARDENS CITIZENS IN ACTION, INC., a
New Jersey non-profit corporation; PEDRO AROCHO;
REYNALDO AROCHO; ANA AROCHO; CHRISTINE
BARNES; BERNICE CAGLE; LEON CALHOUN;
GEORGE CHAMBERS; DOROTHY CHAMBERS;
SANTOS CRUZ; ELIDA ECHEVARIA; NORMAN
HARRIS; MATTIE HOWELL; NANCY LOPEZ; VINCENT
MUNOZ; ELMIRA NIXON; LEONARDO PAGAN;
ROSEMARY ROBERTS; WILLIAM ROBERTS; EFRAIM
ROMERO; HENRY SIMONS; JOYCE STARLING;
TAISHA TIRADO; VIVIAN BROOKS; ANGELO NIEVES;
DOLORES NIXON; ROBERT TIGAR; JAMES POTTER;
RADAMES TORRES-BURGOS; LILLIAN TORRES-
MORENO; DAGMAR VICENTE; CHARLIE MAE
WILSON; LEONA WRIGHT; MARIA AROCHO;
PHYLLIS SINGLETON; FLAVIO TOBAR; MARLENE
TOBAR; SHEILA WARTHEN; ALADIA WARTHEN,
Appellants,
v.
TOWNSHIP OF MOUNT HOLLY, a municipal corporation
of the State of New Jersey; TOWNSHIP COUNCIL OF
TOWNSHIP OF MOUNT HOLLY, as governing body of the
1
Township of Mount Holly; KATHLEEN HOFFMAN, as
Township Manager of the Township of Mount Holly;
KEATING URBAN PARTNERS L.L.C., a company doing
business in New Jersey; TRIAD ASSOCIATES, INC., a
corporation doing business in New Jersey; JULES K.
THIESSEN, as Mayor of the Township of Mount Holly.
_____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 1:08-02584)
District Judge: The Honorable Noel L. Hillman
_____________
Argued July 14, 2011
_____________
Before: SLOVITER, FUENTES, and FISHER, Circuit
Judges
(Opinion Filed: September 13, 2011)
Olga D. Pomar, Esq. (Argued)
South Jersey Legal Services, Inc.
745 Market Street
Camden, NJ 08102
Susan Ann Silverstein, Esq.
AARP Foundation Litigation
601 E Street, NW
Washington, DC 20049
William R. Potter, Esq.
2
Potter & Dickson
194 Nassau Street
Princeton, NJ 08542
Counsel for Appellants
M. James Maley, Jr., Esq. (Argued)
Emily K. Givens, Esq.
Erin E. Simone, Esq.
M. Michael Maley, Esq.
Maley & Associates, P.C.
931 Haddon Avenue
Collingswood, NJ, 08108
Counsel for Appellees, Township of Mount Holly, Township
Counsel of Mount Holly, Kathleen Hoffman, and Jules
Thiessen
Gaetano Mercogliano, Esq.
Neal A. Thakkar, Esq.
Sweeney & Sheehan, P.C.
216 Haddon Avenue, Suite 500
Westmont, NJ 08108
Counsel for Appellee, Triad Associates, Inc.
William J. DeSantis, Esq.
Ballard Spahr
210 Lake Drive East
Cherry Hill, NJ 08002
Counsel for Appellee, Keating Urban Partners, L.L.C.
3
Thomas E. Perez, Esq.
Dennis J. Dimsey, Esq.
April J. Anderson, Esq.
Department of Justice
Civil Rights Division
Appellate Section
Ben Franklin Station
P.O. Box 14403
Washington, DC 20044-4403
Counsel for Amicus Curiae United States of America
_____________
OPINION OF THE COURT
_____________
FUENTES, Circuit Judge.
Mount Holly Township (the “Township”) has
proposed a redevelopment plan that would eliminate the
existing homes in its Gardens neighborhood, occupied
predominantly by low-income residents, and replace them
with significantly more expensive housing units. Appellants,
an association of Gardens residents organized under the name
Mt. Holly Gardens Citizens in Action, and 23 current and
former residents of the neighborhood (collectively the
“Residents”) filed suit against the Township alleging
violations of various anti-discrimination laws.
Before the Township filed an Answer or discovery on
these allegations had taken place, the District Court granted
summary judgment to the Township. Because the District
4
Court misapplied the standard for deciding whether the
Residents could establish a prima facie case under Title VIII
and because it did not draw all reasonable inferences in the
Residents’ favor, we will reverse.
I. 1
The homes in this dispute are located in a 30-acre
neighborhood called the Gardens in the Township of Mount
Holly in Burlington County, New Jersey. The Gardens is the
only neighborhood in the Township comprised predominantly
of African-American and Hispanic residents. It is poor—
almost all of its residents earn less than 80% of the area’s
median income; with most earning much less.
The 329 2 homes in the Gardens are predominantly
two-story buildings made out of solid brick. Built in the
1950s, the homes are attached in rows of 8 to 10 and are set
back from the curving streets to allow for front and back
yards, with alleys running behind each housing block. Two
major commercial districts abut opposite sides of the
neighborhood, which is only a mile away from the major
1
Because this is an appeal from a motion granting
summary judgment, we examine the record evidence in the
light most favorable to the non-moving parties, here the
Residents, while resolving all reasonable inferences in their
favor. Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir. 2007).
2
The record inconsistently describes the number of
homes as 327 or 329. (JA 61, 776, 1114).
5
downtown business district. Until 2004, the neighborhood
was also home to a playground and a community center.
The 2000 census provides a snapshot of the
neighborhood. 3 According to that data, the Gardens
neighborhood was split evenly between rental properties
(with a median rental price of $705 per month) and
homeowners (the median cost of homeownership was $969
per month). Eighty-one percent of the homeowners had lived
in their homes for at least 9 years; 72% of renters had lived
there for at least five years. Of the 1,031 4 residents living in
the neighborhood, 203, or 19.7%, were non-Hispanic Whites;
475, or 46.1% were African-Americans; and 297, or 28.8%
were Hispanic, the highest concentration of minority residents
within Mt. Holly. Almost all of these residents were
classified as “low income”; indeed, most were classified as
having “very low” or “extremely low” incomes.
3
The parties dispute the utility of data from the 2000
census. However, none of the parties has briefed or even
asked the question of when precisely the violations at issue in
this case began. This issue is important because the
redevelopment process began in 2002 and, as a result, the
demographics of the township have changed. Disputes over
which census numbers to use thus create a moving target;
however, the 2000 census data appears to provide the most
accurate demographic data at the inception of the
redevelopment process.
4
This is an approximate number provided by the
Residents’ expert. Elsewhere in the record, the neighborhood
is described as home to 1,605 people. (JA 1114).
6
The neighborhood was not perfect. For one, it was
crowded. This created a parking shortage, which led
residents to pave their backyards for use as driveways, which,
in turn, led to drainage problems. In addition, the fact that the
homes were owned in fee simple meant there was no one with
a vested interest in maintaining common spaces, such as the
alleys. Some of the owners were nothing more than absentee
landlords, renting to individuals with little interest in
maintaining the properties. Over the years, many of the
properties fell into disrepair. Vacant properties were boarded
up, some yards filled with rubbish, and parts of the area
became blighted. Because the houses were connected to one
another, the dilapidation of one house could and sometimes
did lead to the decay of the adjoining houses. Finally, the
dense population, narrow streets, and vacant properties
facilitated crime. In 1999, 28% of crimes in the Township
occurred in the Gardens, even though that neighborhood
covers only 1.5% of the Township’s land area.
These many problems were not ignored. Local
community activists and business leaders worked to revitalize
the Gardens through a private initiative that eventually came
to be known as “Mt. Holly 2000.” This community endeavor
sought to reverse the neighborhood’s decline by rehabilitating
properties and increasing social services. Despite sporadic
achievements—ten homes were renovated and a community
policing center was established—the neighborhood’s
problems continued.
In the year 2000, the Township commissioned a study
to determine whether the Gardens should be designated as an
“area in need of redevelopment” under New Jersey’s
redevelopment laws. The resulting report, issued on
7
November 8, 2000 concluded that the area offered a
“significant opportunity for redevelopment” because of
blight, excess land coverage, poor land use, and excess crime.
(JA 699). That same year, the Township began to acquire
properties in the Gardens. Those properties were left vacant.
A series of redevelopment plans followed. In 2003,
the Township issued the Gardens Area Redevelopment Plan
(“GARP”). This plan called for the demolition of all of the
homes in the neighborhood and the permanent or temporary
relocation of all of its residents. In their place, the plan
provided for the construction of 180 new market-rate housing
units, thirty of which would be available only to senior
citizens. The plan was changed in 2005 to include a parcel of
land immediately north of the Gardens. This plan, the West
Rancocas Redevelopment Plan, also called for the destruction
of most of the original Gardens homes, to be replaced with
228 new residential units composed of two-family dwellings
and townhouses. Unlike the GARP, the West Rancocas plan
provided for the optional rehabilitation of some of the original
Gardens homes and allowed for the residents of those
rehabilitated units to be temporarily relocated in phases so
that they could remain in the neighborhood. The West
Rancocas plan also contemplated that 10% of the 228 units
would be designated as affordable housing. Finally, in 2008,
the plan was changed again. This time, the Revised West
Rancocas Redevelopment Plan called for construction of up
to 520 houses, 75% of which could be townhouses and 50%
of which could be apartments. The revised plan called for
only 56 deed-restricted affordable housing units, 11 of which
would be offered on a priority basis to existing Gardens
residents. This revised plan did not include any rehabilitation
of existing units.
8
At each stage of the process, many Gardens residents
objected to the redevelopment, complaining about the
destruction of their neighborhood and expressing fear that
they would not be able to afford to live anywhere else in the
Township. One resident complained that the house next to
hers was torn down and that a bulldozer had hit her home,
tearing the wall, cracking the ceiling, and shifting her roof.
(JA 577-78, 1001). Another resident, a 70-year-old disabled
homeowner, told the Township’s Planning Board that, were
he displaced, he would be unable to work and unable to
afford a new home. (JA 1002). At one meeting in 2005, a
planning expert testified that the West Rancocas plan was
deficient because it only allowed rehabilitation as an option,
without requiring or even encouraging it. He also said that
90% of the Gardens’ existing residents would not be able to
afford the newly-constructed homes and complained that the
plan did not provide an estimate of affordable housing in the
existing market for displaced residents. (JA 990, 1117).
Despite these complaints, work on the development
continued. In February 2006 Keating Urban Partners, LLC,
was chosen as the plan developer. Keating, in turn, hired
Triad to develop a relocation plan. That plan, the Workable
Relocation Assistance Plan (“WRAP”), was submitted to the
New Jersey Department of Community Affairs on September
28, 2006 and provided that all residents living in the Gardens
on August 1, 2006 would receive relocation assistance.
Qualified homeowners would receive $15,000 and a $20,000
no-interest loan to assist in the purchase of a replacement
home. The Township offered to buy homes for between
9
$32,000 and $49,000. 5 The estimated cost of a new home in
the development was between $200,000 and $275,000, well
outside the range of affordability for a significant portion of
the African-American and Hispanic residents of the
Township.
Renters were authorized to receive up to $7,500 of
relocation assistance, but were not eligible for relocation
funds to return to the Gardens. In any case, the vast majority
of those renters would be unable to afford the proposed
market-rate rent of $1,230 per month. Eventually, the
Township paid to relocate 62 families, 42 of which moved
outside of Mt. Holly Township. Renters who moved often
had to pay more in rent at their new homes.
Although the redevelopment plan called for building in
phases, the Township began to acquire and demolish all of the
homes in the Gardens, thereby displacing many residents and
creating conditions that encouraged the remaining residents to
leave. By August 2008, 75 homes had been destroyed and
148 homes had been acquired and left vacant. Later that fall,
the Township demolished 60 more homes. And, in the
summer of 2009, 50 more homes were knocked down.
Residents living amongst the destruction were forced to cope
with noise, vibration, dust, and debris. Worse, the
interconnected nature of the houses triggered a cascading
array of problems. Uninsulated interior walls were exposed
to the outside and covered with unsightly stucco or tar. But
these coatings did not extend below grade, allowing moisture
to seep into subterranean crawl spaces, creating an
5
One home sold for $64,000 and another sold for
$81,000.
10
environment for mold problems. Above, the demolitions
opened the roofs of adjoining homes. Those openings were
patched with plywood, which was insufficient to stop water
leaks. Around the neighborhood, homes bore the scars of
demolition: hanging wires and telephone boxes, ragged brick
corners, open masonry joints, rough surfaces, irregular
plywood patches, and damaged porches, floors and railings.
Destruction of the sidewalks outside demolished homes
further contributed to the disarray by making it difficult to
navigate through the neighborhood. By June 2011, only 70
homes remained under private ownership and the Township
was in the process of demolishing 52 properties that it had
acquired. These conditions discouraged any attempt at
rehabilitating the neighborhood and encouraged existing
residents to sell their homes for less than they otherwise
might have been worth.
In October 2003, Citizens in Action filed a suit in state
court alleging violations of New Jersey’s redevelopment laws
and procedures, and various anti-discrimination laws.
Ultimately, the New Jersey Superior Court dismissed some
counts and granted summary judgment to the Township on
the others, concluding that there was no violation of New
Jersey law, that the area was blighted, and that the anti-
discrimination claims were not ripe because the plan had not
yet been implemented. The Appellate Division affirmed, and
the New Jersey Supreme Court denied a petition for
certiorari.
The Residents filed suit in the District Court on May
27, 2008, raising the anti-discrimination claims that had not
been ripe in their state suit. The federal complaint alleged,
among other things, violations of the Fair Housing Act (the
11
“FHA”), Title VIII of the Civil Rights Act of 1968; the Civil
Rights Act of 1866, as codified at 42 U.S.C. § 1982 6; and the
Equal Protection Clause of the Fourteenth Amendment to the
United States Constitution. 7 The Residents asked for
declaratory and injunctive relief to stop the redevelopment
plan, as well as damages or compensation that would allow
Gardens residents to obtain housing in the Township. The
Residents’ motion for a preliminary injunction was denied.
After they filed an Amended Complaint, the Township, along
with the other named defendants, filed motions to dismiss.
The District Court converted these into motions for summary
judgment and, after allowing the parties time to brief the
motions, granted summary judgment to the Township
defendants. The District Court ruled that there was no prima
facie case of discrimination under the FHA and that, even if
there was, the Residents had not shown how an alternative
course of action would have had a lesser impact.
The Residents filed a timely appeal and we granted the
Residents’ motion to stay redevelopment pending this appeal.
We have jurisdiction under 28 U.S.C. § 1291.
II.
6
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, and convey real and personal
property.”
7
Section 1 of the Fourteenth Amendment provides in
pertinent part that “[n]o State shall . . . deny to any person
within its jurisdiction the equal protection of the laws.”
12
We exercise plenary review over a District Court’s
ruling on summary judgment. See Disabled in Action of
Pennsylvania v. Se. Pennsylvania Transp. Auth., 635 F.3d 87,
92 (3d Cir. 2011). “Summary judgment is appropriate only
where, drawing all reasonable inferences in favor of the
nonmoving party, there is no genuine issue as to any material
fact . . . and the moving party is entitled to judgment as a
matter of law.” Id. (quoting Melrose, Inc. v. City of
Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010)).
The FHA makes it unlawful to “refuse to sell or rent . .
. or otherwise make unavailable or deny, a dwelling to any
person because of race, color, religion, sex, familial status, or
national origin.” 42 U.S.C. § 3604(a). A dwelling can be
made otherwise unavailable by, among other things, action
that limits the availability of affordable housing. See, e.g.,
Huntington Branch, NAACP v. Town of Huntington, 844 F.2d
926, 928-29, 938-39 (2d Cir. 1988); Smith v. Town of
Clarkton, 682 F.2d 1055, 1059, 1062-64 (4th Cir. 1982);
Resident Advisory Bd. v. Rizzo, 564 F.2d 126, 130 (3d Cir.
1977). The FHA can be violated by either intentional
discrimination or if a practice has a disparate impact on a
protected class. Cmty. Serv., Inc. v. Wind Gap Mun. Auth.,
421 F.3d 170, 176 (3d Cir. 2005).
Disparate impact claims, which do not require proof of
discriminatory intent, see Rizzo, 564 F.2d at 147-48, permit
federal law to reach “[c]onduct that has the necessary and
foreseeable consequence of perpetuating segregation[, which]
can be as deleterious as purposefully discriminatory conduct
in frustrating the national commitment to replace the ghettos
by truly integrated and balanced living patterns.” Metro.
13
Hous. Dev. Corp. v. Vill. of Arlington Heights, 558 F.2d
1283, 1289-90 (7th Cir. 1977). In order to determine whether
action of this sort was “because of race” we look to see if it
had a “racially discriminatory effect,” i.e., whether it
disproportionately burdened a particular racial group so as to
cause a disparate impact. Rizzo, 564 F.2d at 146-48; see also
Lapid-Laurel, LLC v. Zoning Bd. of Adjustment of Twp. of
South Plains, 284 F.3d 442, 466-67 (3d Cir. 2002) (featuring
claims of a disparate impact on handicapped persons in
violation of 42 U.S.C. § 3604(f)). This is called a prima facie
case of discrimination. Rizzo, 564 F.2d at 148 & n.31. If
such a case is established, then we look to see whether the
defendant has a legitimate, non-discriminatory reason for its
actions. Id. at 148. If it does, the defendant must then also
establish that “no alternative course of action could be
adopted that would enable that interest to be served with less
discriminatory impact.” Id. at 149. Finally, if the defendant
makes this showing, the burden once again shifts to those
challenging the action, who must demonstrate that there is a
less discriminatory way to advance the defendant’s legitimate
interest. Id. at 149 n.37.
A.
When viewed in the light most favorable to the
Residents, the evidence submitted by the Residents was
sufficient to establish a prima facie case. “[N]o single test
controls in measuring disparate impact,” but the Residents
must offer proof of disproportionate impact, measured in a
plausible way. Hallmark Developers, Inc. v. Fulton Cnty.,
466 F.3d 1276, 1286 (11th Cir. 2006). Typically, “a disparate
impact is demonstrated by statistics,” id. at 1286, and a prima
facie case may be established where “gross statistical
14
disparities can be shown.” Hazleton Sch. Dist. v. United
States, 433 U.S. 299, 307-08 (1977). According to the data in
the 2000 census conducted before the redevelopment plan
began, 22.54% of African-American households and 32.31%
of Hispanic households in Mount Holly will be affected by
the demolition of the Gardens. The same is true for only
2.73% of White households. In short, the Residents’
statistical expert has calculated that African-Americans would
be 8 times more likely to be affected by the project than
Whites, and Hispanics would be 11 times more likely to be
affected. Furthermore, the 2000 data showed that only 21%
of African-American and Hispanic households in Burlington
County would be able to afford new market-rate housing in
the Gardens, compared to 79% of White households.
The District Court’s first error was in rejecting the
Residents’ statistical submissions, which should have been
taken in the light most favorable to them at this stage in the
proceedings. These statistics, like those presented in Rizzo
and other prominent housing discrimination cases, show a
disparate impact. In Rizzo, the plaintiffs presented evidence
that, of the 14,000-15,000 people on a waiting list for public
housing, 85% were black and 95% were of a minority
background. 564 F.2d at 142. Under these circumstances, we
concluded that the cancellation of a public housing project
had a “racially disproportionate effect, adverse to Blacks and
other minorities in Philadelphia.” Id. Similarly, the plaintiffs
in the Second Circuit case of Huntington Branch used
statistics showing that while only 7% of the residents in a
town required subsidized affordable housing, 24% of that
town’s Black residents required such housing, which meant
that Black residents were three times more likely to be
affected by a shortage of affordable housing. 844 F.2d at
15
929. And in Keith v. Volpe, the Ninth Circuit concluded that
the FHA was violated where a blocked housing project had
twice the adverse impact on minorities. 858 F.2d 467, 484
(9th Cir. 1988). The disparate impact here, while not as
extreme as the impact in Rizzo, is similar to or greater than
the disparate impact found sufficient to establish a prima
facie case elsewhere. Under these circumstances, the District
Court erred in granting summary judgment to the Township.
Further, the District Court’s challenge to these
statistics in a footnote did not make the appropriate
inferences. (JA 15-16 n.9). Instead, the District Court
challenged the statistical analysis underlying the 21% figure
of Burlington County minority residents who could afford
units the redeveloped Gardens as both too broad, because it
took account of the entire population of Burlington County,
and too narrow because it failed to consider minorities
outside the county who might move in.
In addition, the District Court said the 21% figure did
not take into account the fact that 56 of the units in the
Revised West Rancocas Plan would be designated as
affordable housing. But the District Court’s analysis failed to
take into account the Residents’ evidence that these units,
although labeled “affordable,” would be out of reach for
almost all of the Gardens residents.
The District Court also said that the statistics failed to
take into account non-minority purchasers who might rent to
minorities. But, unless those purchasers offered below-
market rents, this would not affect the inference that the
project had a disproportionate effect on Blacks and Hispanics
who would be unable to afford market-rate units.
16
As to the District Court’s concern that the statistics did
not take into account minorities who might move elsewhere
in Mount Holly, the Residents’ expert opined that affordable
housing in the Township was scarce, and that most Gardens
residents would not be able to afford market-rate units
elsewhere in the Township.
Lastly, the District Court erred when it rejected a
reasonable inference in favor of the Residents by looking at
the absolute number of African-American and Hispanic
households in Burlington County that could afford homes.
Instead, the District Court should have looked to see whether
the African-American and Hispanic residents were
disproportionately affected by the redevelopment plan. See
Huntington, 844 F.2d at 938 (“By relying on absolute
numbers rather than on proportional statistics, the district
court significantly underestimated the disproportionate impact
of the Town’s policy.”); Hallmark Developers, 466 F.3d at
1286 (“[I]t may be inappropriate to rely on absolute numbers
rather than on proportional statistics.”) (quoting Huntington,
844 F.3d at 928.). 8
There is another problem. The District Court’s most
troubling error is its conflation of the concept of disparate
treatment with disparate impact. The District Court
essentially agreed with the Township that because 100% of
minorities in the Gardens will be treated the same as 100% of
non-minorities in the Gardens, the Residents failed to prove
8
The Department of Justice filed an amicus curiae
brief agreeing that the District Court erred in its disparate
impact prima facie case analysis.
17
there is a greater adverse impact on minorities. This was in
error. We need not simply ask whether the White residents at
the Gardens are treated the same as the minority residents at
the Gardens. The logic behind the FHA is more perceptive
than that. It looks beyond such specious concepts of equality
to determine whether a person is being deprived of his lawful
rights because of his race. Rather, a disparate impact inquiry
requires us to ask whether minorities are disproportionately
affected by the redevelopment plan. Thus the Residents can
establish a prima facie case of disparate impact by showing
that minorities are disproportionately burdened by the
redevelopment plan or that the redevelopment plan “[falls]
more harshly” on minorities. Doe v. City of Butler, 892 F.2d
315, 323 (3d Cir. 1989).
The Township asserts that a disparate impact approach
would result in the unintended consequence of halting the
redevelopment of minority neighborhoods and that it is
foreclosed by the Supreme Court’s decision in City of
Memphis v. Greene, which states that
[b]ecause urban neighborhoods are so
frequently characterized by a common ethnic or
racial heritage, a regulation’s adverse impact on
a particular neighborhood will often have a
disparate effect on an identifiable ethnic or
racial group. To regard an inevitable
consequence of that kind as a form of stigma so
severe as to violate the Thirteenth Amendment
would trivialize the great purpose of that charter
of freedom.
451 U.S. 100, 128 (1981).
18
There are three problems with the Township’s
position. First, City of Memphis was concerned with the
standard for establishing a violation of the Thirteenth
Amendment’s ban on the “badges and incidents of slavery in
the United States.” Id. at 125-26. Whatever that standard
might be—a question left open by the Supreme Court’s ruling
in that case, see id. at 130 (White, J., concurring)—City of
Memphis did not consider the FHA. All of the courts of
appeals that have considered the matter, including this one,
have concluded that plaintiffs can show the FHA has been
violated through policies that have a disparate impact on a
minority group. See Greater New Orleans Fair Housing
Action Center v. HUD, 639 F.3d 1078, 1085 (D.C. Cir. 2011)
(acknowledging the majority view but declining to take a
position on the matters); Simms v. First Gibraltar Bank, 83
F.3d 1546, 1555 (5th Cir. 1996); Mountain Side Mobile
Estates P'ship v. HUD, 56 F.3d 1243, 1250-51 (10th Cir.
1995); Jackson v. Okaloosa County, 21 F.3d 1531, 1543
(11th Cir. 1994); Casa Marie, Inc. v. Superior Court of
Puerto Rico, 988 F.2d 252, 269 n.20 (1st Cir. 1993); Keith,
858 F.2d at 482-84; United States v. Starrett City Assocs., 840
F.2d 1096, 1100 (2d Cir. 1988); Arthur v. City of Toledo, 782
F.2d 565, 574-75 (6th Cir. 1986); Smith, 682 F.2d at 1065;
United States v. Mitchell, 580 F.2d 789, 791-92 (5th Cir.
1978); Rizzo, 564 F.2d at 147-48; Metro. Hous. Dev. Corp.,
558 F.2d at 1290; United States v. City of Black Jack, 508
F.2d 1179, 1184 (8th Cir. 1974).
Second, the Township’s approach urges us to conclude
that the FHA is violated only when a policy treats each
individual minority resident differently from each individual
White resident. Under our precedent, a plaintiff may
19
establish a prima facie case of discrimination by
demonstrating that the policy disproportionately affects or
impacts one group more than another—facially disparate
treatment need not be shown. For instance, in Rizzo, the
waiting list for public housing comprised 85% African-
Americans and 95% minorities, meaning that 5% were White.
564 F.2d at 142. The White residents on the list were treated
the same as the minority residents on the list—each was hurt
by Philadelphia’s decision to block a public housing
project—but we nevertheless found a violation of the FHA
because cancelling the project had a “racially disproportionate
effect” on African-Americans. Id. at 149 (“Nor can there be
any doubt that the impact of the governmental defendants’
termination of the project was felt primarily by blacks, who
make up a substantial proportion of those who would be
eligible to reside there.”) (emphasis added).
The Township may be correct that a disparate impact
analysis will often allow plaintiffs to make out a prima facie
case when a segregated neighborhood is redeveloped in
circumstances where there is a shortage of alternative
affordable housing. But this is a feature of the FHA’s
programming, not a bug. The FHA is a broadly remedial
statute designed to prevent and remedy invidious
discrimination on the basis of race, see Havens Realty Corp.
v. Coleman, 455 U.S. 363, 380 (1982), that facilitates its anti-
discrimination agenda by encouraging a searching inquiry
into the motives behind a contested policy to ensure that it is
not improper. See Christine Jolls, Antidiscrimination and
Accommodation, 115 Harv. L. Rev. 642, 652 (2001)
(remarking that a “leading gloss” on the Supreme Court’s
decision in Griggs v. Duke Power Co., 401 U.S. 424 (1971),
is that “disparate impact functions as a means of smoking out
20
subtle or underlying forms of intentional discrimination on
the basis of group membership.”). We need not be concerned
that this approach is too expansive because the establishment
of a prima facie case, by itself, is not enough to establish
liability under the FHA. It simply results in a more searching
inquiry into the defendant’s motivations—precisely the sort
of inquiry required to ensure that the government does not
deprive people of housing “because of race.”
Finally, the Township seems to argue that its
redevelopment plan does not violate Title VIII unless the
statistics show that it increases segregation in the Township.
(Twp. Br. at 18.). Showing that a policy has a segregative
effect is one way to establish a violation of Title VIII, but it is
not the only way. See Huntington Branch, 844 F.2d at 937
(observing that a policy often discriminates in one of two
ways: having a disparate impact or perpetuating segregation).
The Township is free to argue that its plan is less
discriminatory than all of the available alternatives because it
does the best job of integrating the neighborhood. However,
those arguments are properly considered in the context of the
last steps of the Title VIII analysis, not as a requirement of
the prima facie case.
In reality, the District Court’s decision was based on a
valid and practical concern, which appears to drive its
reasoning throughout the opinion. It feared that finding a
disparate impact here would render the Township powerless
to rehabilitate its blighted neighborhoods. This underlying
rationale distorts the focus and analysis of disparate impact
cases under the FHA. In disparate impact cases, “[e]ffect, not
motivation, is the touchstone because a thoughtless housing
practice can be as unfair to minority rights as a willful
21
scheme.” Smith v. Anchor Bldg. Corp., 536 F.2d 231, 233
(8th Cir. 1977). Once the Residents established a prima facie
case of disparate impact, the District Court’s inquiry must
continue to determine whether a person is being deprived of
his lawful rights because of his race. It must ask whether that
Township’s legitimate objectives could have been achieved in
a less discriminatory way.
B.
Once the plaintiffs establish a prima facie case, the
defendants must offer a legitimate reason for their actions. In
this case, everyone agrees that alleviating blight is a
legitimate interest. The core of the dispute between the
parties is over the next step of the FHA’s burden-shifting
analysis: whether the defendants have shown that there is no
less discriminatory alternative. Rizzo, 564 F.2d at 149. Only
when the defendants make this showing does the burden shift
back to the plaintiffs—where it ultimately remains—to
provide evidence of such an alternative. Id. at 149 n.37. The
test for whether there is no alternative is “similar to the test of
whether the defendant has demonstrated that the requested
accommodation is ‘unreasonable’ for the purposes of
rebutting a claim under § 3604(f)(3)(B).” Lapid-Laurel, 284
F.3d at 468. Section 2604(f)(3)(B) of the FHA requires that
reasonable housing accommodations be made for individuals
with disabilities. In other words, the defendant must show
that the alternatives impose an undue hardship under the
circumstances of this specific case. See US Airways v.
Barnett, 535 U.S. 391, 401-02 (2002) (discussing the term
“unreasonable accommodation” under the Americans with
Disabilities Act).
22
The District Court characterized the Residents’
proposed alternative as follows:
[E]ffectively, plaintiffs are seeking to remain
living in the blighted and unsafe conditions
until they are awarded money damages for their
claims and sufficient compensation to secure
housing in the local housing market. Although
couched at times like an effort to have the
development go up around them, like a highway
built around a protected tree, or to have their
units rehabilitated, this makes little if no
practical sense after years of litigation,
approved redevelopment plans, and the
expenditure of significant public resources. At
this late stage, the only real practical remedy is
for plaintiffs to receive the fair value for their
home as well as proper and non-discriminatory
relocation procedures and benefits . . . . The
relief they are seeking is inconsistent with
proving the fourth element of their FHA claim-
namely, that an alternative course of action to
eminent domain and relocation is viable.
(JA 17 n.12) (ellipsis in original).
The Residents’ evidence is susceptible to more
favorable inferences. The Residents are not asking for
permission to continue to live in “blighted and unsafe”
conditions. Instead, they argue that there is a feasible plan
that meets the Township’s goals and entails more substantial
rehabilitation. Taking the evidence in the light most
favorable to the Residents, one could credit the report of the
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Residents’ planning expert, which stated that the “blighted
and unsafe” conditions could be remedied in a far less heavy-
handed manner that would not entail the wholesale
destruction and rebuilding of the neighborhood.
The Residents’ expert pointed out that, although the
Revised West Rancocas Plan called for development in
stages, the Township began the development by aggressively
acquiring houses, which it left vacant and then destroyed. He
opined that a more gradual redevelopment plan would have
allowed existing residents to move elsewhere in the
neighborhood during one part of the redevelopment, and then
move back once the redevelopment was completed. The
Residents’ expert further noted that the Township had not
performed a comparative cost analysis showing that total
demolition, relocation, and new construction was less feasible
than an alternative focused on rehabilitation. Indeed, the
expert went on to propose an alternative redevelopment plan
that would rely on the targeted acquisition and rehabilitation
of some of the existing Gardens homes, the combination of
some houses to make larger homes, an initiative to make the
houses more attractive through the use of landscaping and
added amenities such as decks and porches, and selective
demolition and new construction, including the construction
of more affordable units. The Residents’ expert also provided
examples of previous alternatives—including one developed
as early as 1989—to show that the complete demolition of the
neighborhood was not the only possible solution to blight in
the Gardens. 9 Finally, he provided a non-exhaustive list of
9
The 1989 plan was not provided as the alternative but
only to show that less discriminatory alternatives had been
considered in the past and could serve as the basis for an
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state and federal funding programs that would support such a
redevelopment plan and observed that the Township had
failed to make an active effort to locate a developer with
experience in neighborhood rehabilitation.
The Township provided the contrasting statements of
its Township manager, who argued that a rehabilitation
program was not economically feasible. In support, she cited
the fact that one alternative, the Mt. Holly 2000 program,
demonstrated that rehabilitation of each unit would be
extremely costly. She also challenged the availability of
sources of funding for a rehabilitation. Lastly, she
emphasized the many problems that led the Township to
declare the Gardens an area in need of redevelopment and
asserted the belief of the Township Council and its planning
board that demolition and replacement is the most effective
and efficient approach to solving the neighborhood’s
problems.
These contrasting statements, as well as the parties’
continued arguments on appeal as to the cost and feasibility
of an alternative relying on rehabilitation, create genuine
issues of material fact that require further investigation. Once
the record on alternatives has been more fully developed, the
District Court may entertain renewed motions for summary
judgment, taking into account the Township’s initial burden
of showing that there are no less discriminatory alternatives,
as well as the standard advanced in Lapid-Laurel for
updated approach that would lessen the redevelopment’s
impact on minority residents of the Township.
25
ultimately determining whether an alternative is
unreasonable. 10
III.
The Residents are also seeking to recover under the
theory that the Township intentionally discriminated against
its minority residents when it adopted the redevelopment
plan. The District Court saw no evidence of intentional
discrimination and granted the Township’s motion for
summary judgment. After carefully considering the matter,
we discern no error in the District Court’s decision and will
thus affirm that ruling.
IV.
The Township has broad discretion to implement the
policies it believes will improve its residents’ quality of life.
But that discretion is bounded by laws like the FHA and by
the Constitution, which prevent policies that discriminate on
the basis of race. For this reason, “the federal courts must
10
Triad asserts that the portion of the District Court’s
order relating to its involvement should be affirmed because
the Residents, on appeal, have waived their claims against it.
We disagree. In their brief, the Residents argue that the
redevelopers, which include Triad, provided inadequate
relocation assistance, allowed residents to be improperly
pressured to leave, and that the redevelopment plan
essentially pushes minority residents out of Mount Holly. For
all of the reasons stated in this opinion, these are genuine
issues of material fact that must be resolved through further
discovery on remand.
26
stand prepared to provide ‘such remedies as are necessary to
make effective the congressional purpose.’” Rizzo, 564 F.2d
at 149 (quoting J.I. Case Co. v. Borak, 377 U.S. 426, 433
(1964)). A more developed factual record will assist the
District Court in crafting appropriate remedies, if necessary.
For all of the foregoing reasons, the District Court’s order
granting summary judgment is vacated and the case is
remanded for further proceedings.
27