The Fair Housing Act prohibits discrimination on the basis of protected classes. Fair housing discrimination is equally prohibited if it has the functional effect of discriminating, even if the express intent was non-discriminatory, what is known as “disparate impact.” For years, there had been roundabout discussion about whether the Fair Housing Act would prohibit gentrification of a predominantly minority neighborhood or community, as the disparate impact of the gentrification would be on minority populations pushed out of the region. Gentrification is largely defined as the process of modifying a neighborhood through the influx of affluent residents and businesses. It tends to be voluntary at first, with developers offering higher than market value for properties, but eventually leads to involuntary movement as prices rise and elbow the holdouts from their homes. Depending on who you ask, gentrification is either a process of revitalization and urbanization or a process of discrimination and forcible displacement.
In 2022, with Crenshaw Subway Coalition v. City of Los Angeles,75 Cal. App. 5th 917 (2022), the question of gentrification as a form of discrimination was put to the test. A development in South LA was proposed and claimed its benefits as increasing the density of housing and commercial space in a 43-acre zone. The Subway Coalition, a neighborhood advocacy group, sued to stop the project on the basis that it would gentrify the area and result in pushing low-income residents out of the neighborhood in a predominantly African-American and Hispanic region, thereby causing a disparate impact. The court found that gentrification was not a valid theory of discrimination because it would create an unequal remedy where city officials would be required to restrict gentrification in minority communities but not majority-white communities. The California court’s opinion is in line with an earlier decision by the Supreme Court in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015) that prohibited application of the Fair Housing Act in a way that “’cause[s] race to be used and considered in a pervasive and explicit manner [in deciding whether] to justify governmental or private actions’ because doing so ‘inject[s] racial considerations into [the] decision’” (Crenshaw at 75 Cal. App. 5th 921). The gist of the court opinion was that injecting racial consideration into governmental or private action forces the city to make local planning decisions based on race, and therefore demands discrimination on the basis of race wherever gentrification could occur, where previous policy was neutral on its face.
The Crenshaw case was a California Appeals court case, which means the holding is only valid in California at present, but the same reasoning and same Texas Dept. of Housing and Community Affairs caselaw can apply in Oregon as well. The holding should be understood narrowly as preventing a city from being forced to consider gentrification in its land development approval procedures. The holding means a client should not be worried that the city will get sued for its development procedures, even if they appear to have a disparate impact through gentrification. It should not be taken as approval to ask ChatGPT “My client wants to get the most from their money, where are property values going up the fastest, and what neighborhoods are gentrifying?”