When the economy returns, when developers begin to develop and builders begin to build, local governments will wake up to fair housing legislation passed last August.  The bill created legislative handcuffs that will affect affordable housing zoning and land use decisions in interesting ways, and you won’t need to see Paul Revere’s lanterns hanging in the church belfry to tell you that the lawsuits are coming.

             The legislation was not without reason.  Anyone who has represented a developer before a city council that caves in when two neighbors appear to protest knows how difficult some types of projects can be to get approved. Housing for lower income citizens is one of those types of development, and the reason for the difficulty is, simply stated, prejudice. 

             Senate Bill 810, codified as amendments to N.C.G.S §41A-4 and 5, makes it illegal to discriminate against housing for families or individuals whose incomes are below 80% of the areas median income.  But that’s just the start. 

             Let’s look at this legislation.

 High-end developments might be included

             After August 4, 2009 it is considered a discriminatory housing practice to discriminate in land-use decisions based on “the fact that a development or proposed development contains affordable housing units for families or individuals with incomes below 80% of area median income.”

             A typical “affordable” development is comprised entirely of affordable units.  The wording of the statute, however, is “contains affordable housing units.”

            As we move towards more mixed-use and new urbanist growth models there will be increasingly more developments that “contain” a percentage of affordable units.  As councils and county commissions push developers to negotiate with neighbors on density, design, buffers and other issues, how the affordable component is treated becomes a serious matter.  Could litigation on the entire project’s denial rise and fall solely on the board’s view of the affordable units?  It is quite possible.  Whether it should rise and fall on that issue is a separate question.

             When statutes are clear and unambiguous, standard canons of construction allow no room for interpretation. The General Assembly is like Dr. Seuss’s Horton, the elephant, who famously intoned “I meant what I said and I said what I meant.”

 How low is a plaintiff’s burden of proof?

             Pretty low.  The outcome of many legal disputes is partially pre-determined by who has the burden of proof and how high – or, in this case, how low – the burden of proof is.

             Under G.S. 41A-5(a)(3), a local government will be found to have intended discrimination against affordable housing if “the government was motivated in full, or in any part at all, by the fact that the development contains affordable housing units . . .”

             If I were a city or county attorney advising my board, that language would make me nervous.

             Here is an important nuance.  In a civil case a jury is charged with deciding which party has established its case “by the greater weight of evidence.”  The common description is a set of scales that requires just one grain of sand to tip one way instead of the other.

             But when you then look at what it is that a plaintiff must prove (“or in any part at all”), finding that grain of sand has been made, arguably, rather simple.

             The “any part at all” standard suggests that if one board member is just a wee bit concerned about the affordable housing proposal, or expresses an honest hesitation about the housing but votes no based entirely on other factors, the local government will more likely be sued and very possibly found liable for discrimination.  In legal jargon the evidence needed to prove “any part at all” is referred to as “a mere scintilla” of evidence. In street lingo the more apt word is “gotcha.”

             The legislation also allows intent to be established by circumstantial evidence.  Circumstantial evidence does not directly demonstrate the causation of an event.  Rather it establishes a series of facts or observations that, through inference, would lead a reasonable person to conclude their causation of the event.  For example, the hypothetical board member referenced above may aggressively ask questions from the dais expressing concern about the effect of affordable housing on the community.  Even though those questions are answered in favor of the developer, the appearance of hostility would enable a jury to infer discriminatory thoughts, depending upon tone, number of questions, etc., especially if that  board member voted no.

             When viewed through a local government’s lens, the “any part at all” standard is draconian.  A board may vote unanimously to deny rezoning for an affordable housing complex on density, comprehensive plan inconsistency, traffic issues and any number of other legitimate issues, but if one of the nine votes is slightly tainted by improper considerations, the entire vote is tainted even if that one vote did not create or change the outcome.  In other words, the General Assembly has established a zero tolerance standard for thinking discriminatory thoughts.

             The “one tainted vote is enough” standard is not new.  Earlier cases have established that a petitioner’s rights of due process can be denied if just one board member is biased.

             But let’s look at it from the perspective of housing proponents.  Discrimination is typically quite difficult to prove.  It requires a plaintiff to peer into someone’s thoughts.  And we all know that the alleged discriminator, when asked in a deposition about his or her true intent, will vehemently deny having met a poor person or affordable housing development they didn’t like.

             The same is  true for neighborhood opponents in zoning cases who will argue that their concerns are traffic and the environment when their real concern is that the smaller lot subdivision proposed on adjacent land will attract residents of different racial, ethnic or international backgrounds.  In this situation, the distance between what you “know” and what you can prove is great.

             Finally, the legislation applies to “the permitting of development,” which means administrative officials with permitting authority are covered under this act. 

 Effect vs. intent

             The new statute creates yet another basis for litigation.

             Even if intent cannot be demonstrated, a plaintiff could argue that the decision has a discriminatory effect under G.S.41A-5(a)(4).  Land use and permitting decisions that have a deleterious impact on affordable housing in a community can also be found to be discriminatory. 

 Defenses

             Local governments may discriminate if the denial is based on intent to limit high concentrations of affordable housing.  Local governments may also make a decision with unintended discriminatory effects if the decision was “motivated and justified by a legitimate, bona fide governmental interest.”  In a practical sense, this is more than a legal defense.  It is a shifting of the burden of proof to the local government once a plaintiff establishes discriminatory effect.

             In my experience, fair housing proponents do a good job of knowing the law.  The General Assembly has just handed them new weapons to advance fair housing in North Carolina.  Based on my experience with elected boards and neighborhood opponents, it won’t be long before those weapons are used.

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