In MHANY Mgmt., Inc. v. County of Nassau, 2016 U.S. App. LEXIS 5441 (2d Cir. 2016), the Second Circuit adopted the burdens of proof for disparate impact claims under the Fair Housing Act spelled in the regulations of the U.S. Department of Housing and Urban Development. Those rules place the burden on the plaintiff to prove a discriminatory effect either by showing a disparate impact on a protected group or a segregative effect. If that can be shown, the burden shifts to the defendant to show a “substantial, legitimate, nondiscriminatory interest” that justifies the discriminatory effect. At that point, the HUD regulations, now adopted and approved by the Second Circuit, put the burden of proof on the plaintiff to show that the “substantial, legitimate, nondiscriminatory interest” of the defendant “could be served by another practice that has a less discriminatory effect.” 24 C.F.R. ยง 100.500(c)(3). The Second Circuit, and some other Circuits, had previously required the defendant to prove that it could not achieve its goal in a less discriminatory manner.
The decision also finds discriminatory intent on the part of the Village government when it chose to zone a parcel of land for townhouses rather than multifamily housing. While those who spoke at public hearings did not make outright racist statements, and nor did anyone is the municipal government, the District Court found that members of the public used “code words” that indicated a racial animus. Those words were meaningful in the context of a village that had a very low minority population, surrounding towns that had much higher minority populations, the fact that a greater percentage of affordable housing residents are African American or Latino than white, and the speed with which the village overturned a prior decision to allow multifamily housing on the site.