Mount Holly v. Mount Holly Gardens Citizens in Action, Inc.

Date Filed: 05/27/2008

Click here to read LDF’s amicus brief. 

Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., which the Supreme Court agreed to hear in 2013, would have tested whether our nation’s commitment to ensuring that all families have a fair opportunity to find a good place to call home will continue.

In Mount Holly, the Court would have reviewed a key provision of the Fair Housing Act, which is our nation’s key tool to eradicate housing discrimination and promote more inclusive neighborhoods. 

Yet, as our recent economic crisis has starkly revealed, predatory lending and other discriminatory practices continue to deny housing opportunities to people of color and isolate minority communities.  This case came at a particularly critical time as African-American families struggle to overcome the devastating effects of the recession on homeownership and wealth. 

In its amicus brief, LDF urged the Court to endorse the long-standing consensus that the “disparate impact” standard can be used to enforce the Fair Housing Act.  “Disparate impact” occurs when government or private actors unjustifiably pursue practices that have a disproportionately harmful effect on communities of color and other groups protected by the Fair Housing Act.  This standard is often used in challenging discrimination in mortgage lending, homeowners’ insurance, exclusionary zoning, redevelopment, and demolition of public housing.   

If all plaintiffs had to prove discriminatory intent, the majority of housing practices that disadvantage African Americans and Latinos would be left unchallenged. By focusing on the consequences of unfair housing practices, the disparate impact standard often helps screen out discrimination that is intentional, yet pernicious.  Equally important, it eliminates practices that may be neutral on their face but nevertheless make the effects of prior racial discrimination durable.  

As the United States has emphasized in a brief filed in this case, all eleven federal appellate courts that have addressed the issue have concluded that the Fair Housing Act prohibits public and private housing practices that have an unjustified and disproportionately harmful effect on racial minorities.  In February 2013, the U.S. Department of Housing and Development issued final regulations that similarly confirm the long-standing understanding among federal agencies that the Fair Housing Act does not require proof of intent to discriminate.  For LDF’s statement applauding HUD for issuing these regulations, see here.

Despite the consensus among federal courts and federal agencies, the Township of Mount Holly, New Jersey claimed that Congress intended for the Fair Housing Act to prohibit only actions that were proven to be intentionally motivated by racial discrimination.  The Township sought to overturn a ruling of the U.S. Court of Appeals for the Third Circuit that a group of residents, called Mount Holly Gardens Citizens in Action, could proceed with their fair housing suit against the Township. 

The residents challenged the Township’s plan to demolish all of the existing homes in the only neighborhood in the Township that was predominantly occupied by African Americans and Latinos.  Many neighborhood residents are homeowners who have lived in their homes for years.  The Township proposed to replace those homes with more expensive housing that the neighborhood’s current homeowners and renters cannot afford.  The residents advocated that the Township should adopt a less heavy-handed alternative strategy of neighborhood improvement that would not entail the wholesale destruction and redevelopment of a once-stable minority community. 

The parties reached a settlement agreement before the Supreme Court heard oral argument in this case.  The case was dismissed on November 15, 2013