No Shelter in the Storm

For those of us in the business of forecasting the future prospects of affordable housing development, the Supreme Court’s March 2003 decision in City of Cuyahoga Falls v. Buckeye Community Hope Foundation is profoundly demoralizing, both for what the Court said and for what it did not say. While I’m fundamentally an optimistic person, I believe Buckeye is the final ingredient in a “perfect storm” that threatens to wipe out 50 years of progress.

To understand how things got so bad, we have to examine how this tropical depression began to form. The first atmospheric turbulence began decades ago with “white flight” to the suburbs, in a conscious attempt to get away from urban problems like poverty and substandard housing conditions. The storm was fed by conscious policies of disinvestment in central cities, by banks, insurance companies and other businesses whose capital and services are vital to economic development in any community.

The 1980s, with its rapid decline in federal housing support and its rampant profit-taking in the private sector, undermined public sympathy for poor families, eliminated many conventional incentives to build affordable housing and channeled new housing production into the enormously inefficient Low Income Housing Tax Credit (which, incidentally, promised to house a more affluent group of low- and moderate-income renters). While the prosperity of the 1990s helped to spur unprecedented housing development by nonprofit organizations, pressure continued to build, and community opposition to such housing became better financed and more sophisticated. By the close of the decade, formerly uncontroversial senior developments and tax credit apartments for teachers and fire fighters were routinely defeated in the face of neighborhood protest, litigation and electoral “payback” for politicians who supported affordable housing.

Hurricane warnings should have been posted in 1998, when a federal court found that the U.S. Department of Housing and Urban Development (HUD) had violated the First Amendment rights of community opponents when they investigated claims of housing discrimination lodged against them. The appeals court affirmed that decision in 2000, finding that opponents had the right to assemble, petition their elected officials and publicly protest the development of permanent housing for formerly homeless people without inquiry by HUD.

Now, I know it is dangerous to predict the “storm of the century,” when we still have 97 years to go. But here is why Buckeye is likely to make such a prediction accurate: Advocates had thought that the Fair Housing Act and constitutional guarantees against discrimination would provide a bulwark against the storm. I now fear we may have miscalculated. As Congress and HUD have been gradually giving state and local government more discretion in the administration of federal programs, the increasingly conservative federal judiciary has spent the last decade narrowing the reach of federal civil rights laws.

Even before the case was submitted to the Supreme Court, Buckeye’s lawyers dropped the disparate impact claim under the Fair Housing Act, concerned that the conservative Supreme Court would use the case to declare that a violation of the act could be established only by proof of intentional discrimination, and not merely by evidence of a disproportionate ill effect on minority groups. The case went forward on arguments that the city’s use of the referendum process was a violation of the equal protection and due process clauses of the Constitution.

The Court’s decision rests upon its view that the citizen referendum is the ultimate exercise of First Amendment rights. The Court held that city officials had no choice under the city charter but to put the site plan to the referendum. Writing for the majority, Justice Sandra Day O’Connor made clear that she thought since all political power flowed from the people, the referendum could not constitute improper interference by them in the zoning process. While she agreed that the referendum might have been challenged as racially discriminatory had it not been invalidated by the Ohio court, O’Connor firmly held that Buckeye had no right to challenge the referendum procedure itself.

Justice Antonin Scalia’s separate opinion should send chills down the backs of affordable housing advocates everywhere. He wrote: “There is nothing procedurally defective about conditioning the right to build low-income housing on the outcome of a popular referendum.” This amounts to a clear signal to NIMBY forces who want to delay or stop construction of affordable housing.

For affordable housing sponsors already stretched thin trying to secure zoning approval and struggling to assemble multiple sources of financing, the specter of defending hard-won gains through a highly politicized referendum may be enough to dissuade them from building where they may encounter organized resistance.

We all know the weatherman is not always right, particularly with long-range forecasts. But here is my advice as I continue to scan the computer models: It’s time to stock up on plywood, sand bags, batteries and bottled water. You never know how long the storm may last.

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