By Thomas Silverstein (Click here to view the entire P&R issue)
In recent years, there has been a concerted effort by well-funded conservative interests, led by the American Legislative Exchange Council (ALEC), to pass state laws that preempt local governments from engaging in a broad range of regulatory activity and, at times, the provision of public services. The breadth of these laws is staggering, covering topics ranging from hydraulic fracturing (fracking) to ridesharing to municipal broadband. Significantly, some types of blocked ordinances attempt to address social equity issues for marginalized communities, either directly or indirectly. State legislatures have stepped in to stop localities from broadening non-discrimination protections to include sexual orientation, gender identity, and source of income, and have barred living wage ordinances, inclusionary zoning ordinances, and other policies designed to increase access to opportunity for low-income people of color. When state legislatures have taken the step of expressly preempting progressive local laws, they have often targeted cities that are more heavily Black and Latino than their encompassing states. It is clear that, as practiced in 2018, many state legislatures are exercising their power to preempt local laws in a manner that frustrates racial justice goals and reduces the political self-determination of people of color.
The Perils of Local Control
For those familiar with civil rights history, however, the need for constraints on local control is equally clear. Although state laws often mandated segregation at the local level under Jim Crow, we remember the Montgomery Bus Boycott, not the Alabama Bus Boycott, and Brown v. Topeka Board of Education, not Brown v. Kansas Board of Education. To this day, the municipalities play at least as central a role as, and perhaps a larger role than, states in perpetuating and exacerbating segregation and racial disparities in housing, education, employment, and criminal justice. The exclusionary zoning that keeps affordable housing out of predominantly white communities is largely the product of city councils and county boards of supervisors, not state legislatures. Police chiefs hired by local officials establish policing priorities and strategies that fuel mass incarceration. State legislation can, at times, be an effective tool for limiting the ability of local governments to adopt policies that generate inequality. The New Jersey Fair Housing Act, for example, pushes municipalities to adopt inclusionary zoning as a means of allowing a reasonable opportunity for the development of their fair share of the regional need for affordable housing. That law is every bit as much of a constraint on local authority to regulate land use as laws in Indiana, Kansas, and other states which prohibit local inclusionary zoning.
The civil rights movement simply cannot embrace local control without conditions. The challenge for racial justice advocates is differentiating between the increasingly common state preemption laws that undermine racial justice goals and those that do the opposite. In deciding whether to support or oppose individual bills in state legislatures, there is no quandary here. Advocates and committed legislators can easily commit to preempting exclusionary and discriminatory local policies and practices while opposing the preemption of policies and practices that break down barriers and increase access to opportunity. From time to time, there may be disagreement about which category a bill falls into, but the normative consequences of such disputes are not inherently farreaching.
For legal advocates, deciding whether to advance interpretations of state law that invalidate state preemption is entirely more complicated. The state law doctrines that can support challenges to state preemption laws can, almost without exception, support challenges to good state laws just as readily as attacks on bad state laws. For example, state constitutional home rule protections can shield discriminatory at-large systems of election that may limit political representation for people of color from state regulation. Restrictions on legislation that targets only one municipality may stymie attempts to address racial equity problems that arise in specific localities, which may include both communities with racially biased leaders and large, diverse cities that adopt counterproductive and discriminatory responses to crime.
Anti-Discrimination Law Strikes the Balance
Under certain circumstances, federal anti-discrimination laws may have the best potential for overturning preemption laws that undermine racial equity, and with fewer unintended consequences. Yet prevailing in cases using these theories raises significant challenges, as discussed below.
For example, the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution prohibits states from adopting laws where intentional discrimination is a motivating factor for passage. In some instances, there may be evidence, including circumstantial evidence, that state legislatures acted with discriminatory intent in adopting preemption laws. Equal Protection Clause challenges to preemption laws typically rely on the framework for inferring discriminatory intent from circumstantial evidence enunciated by the U.S. Supreme Court in 1977 in Metropolitan Housing Development Corp. v. Village of Arlington Heights. In that seminal case, which involved a challenge to exclusionary zoning in a predominantly white Chicago suburb, the Court looked to the disparate impact of the zoning decision, the village’s history of discrimination, departures from procedural and substantive norms in the zoning process, and contemporaneous statements by local officials. Though the Court ultimately concluded that the plaintiffs had not proven that discriminatory intent was a motivating factor for the zoning decision, the Village of Arlington Heights factors have guided the adjudication of cases of this type ever since.
Two important current challenges to state preemption laws attempt to utilize the Village of Arlington Heights framework to prove violations of the Equal Protection Clause. First, in Lewis v. Governor of Alabama, lowincome African-American workers and civil rights groups are challenging a 2016 Alabama statute that expressly preempts municipalities from adopting minimum wages that are higher than the federal minimum wage. The legislature enacted the law in response to the City of Birmingham’s passage of a living wage ordinance that would have incrementally raised the minimum wage within the city to $10.10 per hour. Following the Village of Arlington Heights’ factors, the plaintiffs marshaled statistical evidence showing that African-American workers were disproportionately likely to benefit from the city’s ordinance; cited Alabama’s recent discriminatory enactment of a restrictive immigration law (which shared co-sponsors with the living wage preemption bill); pointed out that legislative process was rushed and that the legislature failed to provide required notice of the bill to Birmingham residents; noted that the legislature did not consider any studies or expert testimony relating to the subject of the bill; and referenced statements by legislators that were coded references to people of color. Despite this substantial evidence of discriminatory intent, the U.S. District Court for the Northern District of Alabama granted the state’s motion to dismiss. The plaintiffs appealed that decision to the U.S. Court of Appeals for the Eleventh Circuit, where the Lawyers’ Committee for Civil Rights Under Law filed an amicus curiae brief underscoring this evidence, alongside other key arguments.
Second, in City of El Cenizo v. State of Texas, several municipalities, elected officials, and civil rights groups are challenging a 2017 Texas statute that purports to preempt municipalities and other public entities with law enforcement functions, such as public universities, from adopting sanctuary policies that limit the role of local law police in the enforcement of federal immigration laws. The plaintiffs have raised a variety of claims in their complaints, including federal preemption, Due Process Clause, and First Amendment arguments, in addition to a claim that Texas intentionally discriminated against Latinos by enacting the law in violation of the Equal Protection Clause. The evidence that the Texas Legislature acted with discriminatory intent includes the disparate impact of the law on Latinos; the state’s recent history of intentionally discriminating against Latinos through racial gerrymandering in the drawing of legislative districts; the legislature’s consideration of the bill in a context marked by a virulent anti-immigrant backlash fueled by the campaign of President Donald J. Trump; coded language used by legislators who supported the bill; and irregularities in the legislative process such as the bulk consideration of amendments.
In August 2017, the U.S. District Court for the Western District of Texas granted a preliminary injunction barring enforcement of many aspects of the statute but did not address the Equal Protection Clause claims in its decision. Texas appealed that decision to the U.S. Court of Appeals for the Fifth Circuit, which issued a stay allowing the state to enforce parts of the law pending appeal. The Lawyers’ Committee filed an amicus curiae brief in support of those challenging the law, elaborating on the Equal Protection Clause claim.
At the time of writing, each of these cases remained pending in the Courts of Appeals
Leveraging Disparate Impact
Depending on the nature of the preempted local ordinances, federal civil rights statutes may provide a more effective line of attack on these pernicious state laws than Equal Protection claims do. That is so because, under some federal civil rights laws, plaintiffs can prove violations through evidence of the unjustified disparate impact of a policy or practice (even if they could not prevail on an intentional discrimination theory). Under the disparate impact framework, a plaintiff can challenge neutral policies or practices that cause a disproportionate adverse effect or disparate impact and either are not justified or have justifications that could be served through less discriminatory alternative policies. The disparate impact rule of the U.S. Department of Housing and Urban Development sets forth a burden shifting framework under which the plaintiff must show that the challenged policy or practice has a disparate impact or perpetuates segregation, the defendant then has the opportunity to show that the policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest, and, lastly, the plaintiff has the chance to show that a less discriminatory alternative policy or practice could serve the defendants’ interest (24 C.F.R. § 100.500).
One such case is Inclusive Communities Project v. Abbott, a lawsuit filed in the U.S. District Court for the Northern District of Texas in February 2017 by the Inclusive Communities Project (ICP), a Dallas-based organization that provides mobility counseling to Housing Choice Voucher holders seeking to move to high opportunity neighborhoods within the Dallas-Fort Worth area. The lawsuit claims that a 2015 Texas statute preempting municipalities from adopting protections against housing discrimination on the basis of source of income, except for local ordinances that narrowly apply to veterans, violates the federal Fair Housing Act. ICP, previously the successful plaintiff in the case in which the U.S. Supreme Court upheld the viability of disparate impact claims under the Fair Housing Act, is alleging that the state law violates the Fair Housing Act on both intentional discrimination and disparate impact theories. ICP included the City of Dallas as a defendant, as well, because it had adopted a source of income ordinance consistent with the restrictions in the state statute.
The Texas Legislature passed the preemption law at issue in response to two local developments. First, the City of Austin adopted an ordinance protecting voucher holders from discrimination. Second, the City of Dallas entered into a voluntary compliance agreement with the U.S. Department of Housing and Urban Development resolving allegations of violations of civil rights and fair laws, including the duty to affirmatively further fair housing. As a part of that agreement, the city committed to introducing a proposed ordinance in the Dallas City Council that would protect voucher holders from discrimination. The council adopted a narrow source of income ordinance solely protecting veterans in a purported effort to comply with the state law barring source of income protections.
In support of its disparate impact claim, ICP argues that in the context of Dallas where over 86% of voucher holders were African American as of 2013, the state law and the city’s adoption of an ordinance consistent with that law would have a disparate impact on African Americans and would perpetuate segregation in light of the greater incidence of source of income discrimination in predominantly white areas. The state’s primary justification for the law is weak: ensuring that municipalities not require participation by landlords in a voluntary federal program. This justification is flawed for, as ICP argues, it may be a plausible interest for a landlord, but not for a government entity. Moreover, that the law also effectively allows localities to require participation in the Veterans Affairs Supportive Housing Voucher program, which is also voluntary, is inconsistent with this justification. ICP further observed that there are alternative policies that a municipality could incorporate into a source of income discrimination ordinance in order to address landlord concerns, such as providing compensation for delays in lease-up due to the Housing Quality Standards inspection process for the utilization of vouchers. A state law requiring local governments to include similar types of provisions could be a less discriminatory alternative to Texas’s sweeping approach. A motion to dismiss the case is pending.
Safeguarding Inclusionary Zoning
Inclusive Communities Project v. Abbott has the potential to serve as a guide for challenges to a broader range of preemption laws than just source of income protections. Yet the threshold requirement of establishing statistical proof of disparate impact may be more difficult to meet in connection with other equitable local housing policies.
Specifically, state laws that preempt inclusionary zoning may be susceptible to challenge. In theory, the same statistical framework as in Inclusive Communities Project v. Abbott could apply to such a case. The hypothetical argument would be that residents of affordable units in otherwise market rate inclusionary developments are disproportionately people of color and, because new market rate development is disproportionately likely to be located in predominantly white communities, a law blocking inclusionary zoning perpetuates segregation. The design of the inclusionary zoning program matters a great deal for how compelling these arguments would be. Most inclusionary zoning programs do not serve extremely low-income and very low-income tenants, and low, moderate, and sometimes middle-income households served by inclusionary zoning are not always disproportionately people of color. Thus, local context is important, and the preemption of an ordinance that reaches deeper levels of affordability may be a stronger jumping off point for this kind of a disparate impact claim.
Another obstacle in using the Fair Housing Act’s disparate impact standard to overcome the preemption of inclusionary zoning is that data on the actual inhabitants of affordable units produced through inclusionary zoning generally is not available, unlike data on the residents of subsidized housing. Accordingly, in order to construct a disparate impact claim, it would be necessary to project likely occupancy based on the percentage of households within certain income ranges by race or ethnicity. Doing so will often result in a projection of African-American and Latino occupancy that is below what would occur in practice. One way to counteract this issue through inclusionary zoning program design would be to follow the example of Montgomery County, Maryland and provide for the local housing authority to purchase some percentage of affordable inclusionary units to operate as public housing. That would allow the use of data on the actual demographic composition of public housing residents and individuals on the waiting list to project the occupancy of those units.
With respect to possible state justifications for preempting inclusionary zoning and less discriminatory alternatives to preemption, many of the arguments marshaled by ICP in its challenge to the state preemption of local source of income laws appear relevant. Avoiding the perceived burden of having to provide affordable Poverty & Race • Vol. 26, No. 4 • October-December 2017 • 11 (Please turn to page 12) units would seem to be more properly the interest of a developer and not the state, particularly in light of states’ affirmatively furthering fair housing obligations as HUD grantees. Additionally, state legislation requiring municipalities to provide incentives to developers to offset the costs of providing affordable units would be a logical less discriminatory alternative to broad preemption. A potentially thornier justification for preemption would leverage strategically chosen studies that claim that inclusionary zoning is ineffective and has unintended consequences for housing affordability. Although competing studies may credibly rebut those assertions, Professor Stacy Seicshnaydre of Tulane University Law School has written about how difficult it is for plaintiffs to prevail in disparate impact claims, and convincing a court to credit one study over another would be difficult. The more likely route to success would be arguing, similar to the response to the first justification, that the state can guard against any potential unintended consequences by requiring municipalities to provide for adequate incentives.
The State’s Obligation to Affirmatively Further Fair Housing
A final possible avenue for arguing that preemption violates federal civil rights laws has great normative appeal but poses challenges with respect to enforceability. The Fair Housing Act requires recipients of federal housing funds to affirmatively further fair housing. Every state in the U.S. receives housing and community development funds from HUD, as well as similar funds from other federal agencies, and, as a result, has a duty to affirmatively further fair housing. In various contexts, HUD has held out both source of income discrimination protections and inclusionary zoning as best practices for affirmatively furthering fair housing. HUD’s 2015 Affirmatively Furthering Fair Housing rule requires states, among other HUD grantees, to certify that they will not take action that is materially inconsistent with the duty to affirmatively further fair housing (Affirmatively Furthering Fair Housing, 80 Fed Reg. 42272, 42350 (July 16, 2015). It is clear that prohibiting local governments from adopting HUD-endorsed best practices for affirmatively furthering fair housing is materially inconsistent with the duty to affirmatively further fair housing. Two possible avenues arise from this situation: a private right of action to enforce the duty against HUD grantees, or a False Claims Act lawsuit.
Each of these avenues presents challenges. Unfortunately, although the ultimate issue of whether there is a private right of action to enforce the duty against HUD grantees remains unsettled, lower court precedent is not conducive to claims that there is such a private right of action. Despite showing some potential in U.S. ex rel. AntiDiscrimination Center of Metro New York, Inc. v. Westchester County, the federal False Claims Act has proved to be a limited tool for enforcing the duty in subsequent cases. It may be possible to argue that preemption laws are, in turn, preempted under the Supremacy Clause of the U.S. Constitution in light of their conflict with the duty to affirmatively further fair housing, but the U.S. Supreme Court made claims of that ilk more difficult in its 2015 decision in Armstrong v. Exceptional Child Center, Inc., in which it established a new and more stringent test for evaluating whether judicial enforcement of federal statutes is appropriate.
If, in the future, there are shifts in the jurisprudence governing the enforceability of federal statutory obligations or Congress amends the Fair Housing Act to create an express private right of action to enforce the duty, the duty to affirmatively further fair housing may emerge as a stronger bulwark against state preemption laws that target equitable local housing policies. In an administration committed to robust civil rights enforcement, administrative complaints alleging that preemption laws violate the duty to affirmatively further fair housing may get some traction and present a viable nonlitigation route to preserving the ability of local governments to adopt housing policies that advance racial justice goals.
As advocates seek to stem the tide of state preemption laws blocking a wide range of equitable policies, the political process is and will remain the primary venue for fighting back. For some types of laws, however, there are legal theories grounded in both the Equal Protection Clause of the U.S. Constitution and federal civil rights statutes that could provide a litigation option when legislative advocacy is unsuccessful. The potential for success of these theories is uncertain, but the adjudication of pending cases over the coming years will be highly informative. Where preemption targets types of local policies that implicate federal civil rights statutes that allow for disparate impact claims, the potential to fight back through the courts is at its greatest. These types of theories avoid the pitfalls of embracing local control when the past and present contain countless examples of discriminatory exercises of local control.
“Thomas Silverstein, firstname.lastname@example.org, is a Counsel at the Lawyers’ Committee for Civil Rights Under Law.