The Supreme Court, Disparate Impact and Property Management

Well, in the opinion of this author, we’ve moved yet another step closer to hell.  Today the Supreme Court ruled that Disparate Impact lawsuits for discrimination can move forward and are part of the fair housing acts enacted in the 1960s. This is a HUGE expansion of fair housing and I’m not really sure it can be defined.  And that is what make me nervous.

I am all for the seven protected classes that fair housing protects.  No question. And we are very careful to not violate those classes.  But now the definition of discrimination has grown so broad that I don’t know when we’ll be discriminating and when we wont.

See this link for an example.
http://www.kentucky.com/2015/06/25/3917235_supreme-court-opens-door-to-housing.html?rh=1

Here is the important paragraph:

A “disparate impact” arises when a practice produces different effects across racial groups, even if the practice wasn’t racially motivated. For instance, if a mortgage lender establishes borrowing standards based on income and net worth, and some racial groups are less likely than others to qualify for loans under those standards, this could result in a disparate impact

And I had a Kansas City housing official tell me about a year ago that in his opinion (now green-lighted by the Supreme Court) that because I refuse to lease homes to people with violent criminal pasts and that disproportionally people of color go to jail because of violent criminal behavior that I am discriminating against people of color under the broad definition of “disparate impact.”

Here is the scary, scary thing. It doesn’t have to intentional.  And we all know it doesn’t have to be really even proven in civil court.  So regardless of the fact that I won’t rent to a white guy with a criminal past I may still be discriminating under disparate impact because I won’t rent to a person of color with a criminal past.

Where does this stop?  Read carefully and think about the two examples given. Then take time to shiver.  Government has taken another step into allowing housing to become a populist right.

Again, to answer some of the arguments I can already hear, I am not discriminatory. Not in my nature.  But I’m not stupid, either.  This will be used against property managers, landlords, realtors and lenders to the tune of hundreds of millions (billions) of dollars in lawsuits.  And that will “trickle down” into your expenses, too.

1 Comment

Filed under Property Management, Real Estate Investing, Social Issues

One response to “The Supreme Court, Disparate Impact and Property Management

  1. jkane74606@aol.com

    Thanks for this information. I new it as coming and it sucks. Thx-Jay

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