MHANY Mgmt., Inc. v. Cnty. of Nassau, No. 14-1634-cv, 14-1729-cv (2d Cir. Mar. 23, 2016).
This case recognizes that opposition to real-estate development can cloak racial animus.
A municipality in suburban Nassau County—a municipality with no affordable housing at all—wanted to rezone a portion of its public land to allow multifamily housing. This rezone would serve as a prelude to selling the land to a private developer. Independent studies showed that the planned redevelopment wouldn’t burden the local schools, harm the environment, or materially increase traffic—and would also provide a net tax benefit to the municipality.
Local residents, however, were up in arms about this plan. At a crowded public hearing, they said they were worried about multifamily housing. Some said they wanted assurances that the developer wouldn’t build affordable housing on the land. In the weeks that followed, a flyer began circulating around the town saying that property values might decrease if multifamily housing, particularly “affordable housing,” was built on the site.
In response to this opposition, the municipality decided to allow only single-family housing on the site. Due to this decision, the plaintiffs in this lawsuit, who include developers of affordable multifamily housing, couldn’t submit a compliant bid to buy the property. This lawsuit, which asserts claims under the Fair Housing Act, among others, then followed.
The Second Circuit now largely affirms the district court, which after a trial ruled in favor of the Plaintiffs on both disparate-treatment and disparate-impact theories. Most interesting is the Second Circuit’s discussion of local residents’ comments in opposition to the proposed redevelopment. The appellate court affirms the district court’s finding that many of these comments were just “code words for racial animus.” By acquiescing to this race-based animus, the municipality violated the Fair Housing Act. This is an important, and, in my view, a wise ruling.