Owner Can Let Section 8 HAP Contract Expire, Not Liable for Discrimination

Facts: Residents sued a Section 8 project owner in state court for discrimination under the theory of disparate impact liability. The owner decided not to renew participation in the project-based Section 8 subsidy program when it expired. Instead of continuing the project-based subsidy, the owner opted to accept Section 8 enhanced vouchers from the tenants, which enables the residents to continue living at the site with a rental subsidy.

The residents claimed that the decision to allow the project-based subsidy to lapse discriminates against current tenants and potential tenants in the community. They alleged that the loss of low-income housing would harm the neighborhood and have a proportionately discriminatory effect.

The trial court dismissed the residents’ complaint, and the residents appealed.

Ruling: The Massachusetts Supreme Court upheld the dismissal of the residents’ complaint.

Reasoning: The state court set a precedent in Massachusetts that disparate impact claims based on the alleged discriminatory effect of a neutral policy or management decision can be brought against housing providers under the state’s antidiscrimination laws in addition to the federal Fair Housing Act. However, even though state law allows disparate impact claims, the residents in this case failed to meet the initial burden of proof that discrimination actually occurred.

The residents failed to show that there was any harm to existing residents. All of the Section 8 tenants were deemed eligible for enhanced vouchers, which allowed them to remain at the site or to live at another site with a subsidy.

The court also found that the residents failed to show harm to applicants on the waiting list. The courts said there is no guarantee that applicants would have the opportunity of Section 8 housing at the site even if the housing assistance payments contract was renewed. The court found no “robust causality requirement” showing that the owner’s action results in a statistical disparity affecting those on the waiting list. Therefore, there was no showing that the owner disproportionately disadvantaged members of a protected class.

• Burbank Apartments Tenant Association v. Kargman, April 2016