[Continued from yesterday's Part 1.]
In yesterday’s Part 1, the story of Mount Holly Gardens, which ought to have been another in the line of important cases on the limitations of eminent domain for economic development (ED4ED), had become redefined as a symbol of the Administration’s deployment of its novel ‘disparate impact’ theory of civil rights discrimination, a lever that had proven so effective the Administration was able to obtain extremely large cash settlements from banks that it accused of unknowingly having discriminated against black borrowers.
What the case should have been about
As (badly) reported by MSNBC.com (November 15, 2013):
In 2003, the New Jersey Township of Mount Holly declared the Gardens neighborhood blighted and sought to redevelop it, claiming that was the only way to end rising crime in the area and revive the township’s economy.
Back in 2003, ten years ago, Kelo v. New London had not been decided,(leading to its ending in farce) and the broad blight blanket was being widely (and largely uncontroversially) used to clear neighborhoods for private redevelopment that the city government believed would revitalize the community or the economy.
Blighted now for sure; was it blighted in 2003?
So the Township acquired homes, presumably by eminent domain, and set about its neighborhood redevelopment plan.
Over ten years, the remaining Gardens residents watched their neighbors flee as the township turned more than half the neighborhood to rubble. They woke up to the rumbling of machines destroying homes still attached to theirs.
Though the photos are unclear, it’s probable Mount Holly Gardens was an old FHA Section 608 property, developed in the decade right after World War II and intended to be a form of middle-income and low-income housing.
Nearly all 608′s were walkup, brick exterior, with small rooms (though with beautiful hardwood floors and wood balustrades and staircases), and typically with very basic front stoops and porches over the entrance.
A Section 608 that outlives its useful life?
While many 608′s were rental, after thirty or forty years their FHA mortgages would have been fully repaid, and it would have been an attractive chance to buy.
Given the slow growth of no-growth economy of Mount Holly, these homes would gradually have become obsolescent and obsolete. Their plumbing would be lead pipes; their electricity would be low-amperage unable to deal with air conditions, leave alone microwaves, computers, and big-screen televisions. The bathrooms would have been antiques. And the neighborhood, as some neighborhoods do, would have declined – the more so if the residents were, as they appear to be, almost exclusively elderly (and women heads of household) and thus less able to maintain their properties.
We’re doing you a favor; demolition at Mount Holly Gardens
So it’s understandable, in practical community-development terms, if the township believed it would be doing everyone a favor by upgrading the neighborhood – by, if necessary, demolishing everything there and building new.
That represented only one problem: the economics of development required a certain net operating income, and apartments are occupied by money, not people. The real estate result would be fore-ordained:
The redevelopment included new housing that would be too expensive for residents who wanted to stay.
They sued under the Fair Housing Act, saying that the township’s redevelopment plan was a form of discrimination because it would have a disparate impact on the township’s minority residents.
It is a curious feature of American civil rights law that one can discriminate against many things but not some other things. One can discriminate against poor people but not black people. So to make this argument, the residents had to claim (even if by assumption) that poverty and blackness were synonymous, at least in Mount Holly Gardens, and that the blackness trumped the poverty.
Under former Department of Justice civil rights chief and current Labor Secretary Thomas Perez, the Obama administration had pursued an aggressive strategy, using disparate impact against banks that they say discriminated against minority borrowers.
Do I look like a minority to you?
And it was here that Mount Holly Gardens started turning from a real estate and eminent-domain case into a symbol of something.
What the case should have been about: was this eminent domain abuse, or not?
So useful had the lever become that the Administration was willing to lose another case – in fact, willing to withdraw a case that it had previously brought – rather than allow the lever to be placed in legal jeopardy.
Are you in jeopardy of having that answer ruled invalid?
The Supreme Court almost got a chance to rule on the issue of disparate impact last year, when a group of landlords said that the city of St. Paul was discriminating against minority tenants with its enforcement of building codes.
To argue that enforcement of building codes is anti-black requires believing, as if it were self-evident, that the definition of ‘substandard housing’ is inherently racial, different for black than it is for white. And if that were so, then by extension one might be obligated to provide substandard housing to black people if they could not afford the rent of standard housing.
That case was seen by some civil rights advocates as a group of slumlords opportunistically using civil rights laws to protect their ability to provide poor people of color with substandard housing.
One doesn’t have to be a civil rights advocate to see the St. Paul case in those terms – in fact, it’s hard to imagine any other construction at all.
In other words, it was a perfect case for conservatives to argue that disparate impact [As a principle of law – Ed.] was harmful.
Nonsense, and shoddy journalism. Whether ‘disparate impact’ as a civil rights claim is beneficial or harmful is a political judgment, not a legal one. A legal conservative would argue simply that ‘disparate impact’ is not the law.
But Perez made a deal with the city to withdraw the case, and the Supreme Court never got to rule on it.
No Supreme Court hearing for you, I’m afraid
Though Perez’ decision was cleared by Justice Department ethics lawyers [In-house counsel agreed with their boss's view? I'm astonished! – Ed.], conservatives were furious that he had prevented the court from ruling on the argument that disparate impact claims are not a valid interpretation of discrimination under the Fair Housing Act [sentence rewritten to eliminate hypotheses presented as facts – Ed.].
Actually, the legal conservatives were furious because the Department of Justice, which had brought the case, decided to un-bring it, in what I am sure they interpreted as politics trumping the law or the Administration fleeing the game because it was losing.
I’m five over par … and my back really hurts, so I’ll quit the round
Protecting a landmark civil rights law, which after all, was Perez’s job –
Only if one sees the Administration’s new interpretation of disparate impact as so obviously true it cannot bear to be litigated to a decision that might be adverse.
– almost ruined his chances of being labor secretary, as Republicans leveled accusations of corruption, even though Perez didn’t gain personally from the deal.
I didn’t realize that corruption applies only to direct personal economic benefit. Silly me, I thought it might include practicing politics instead of law.
(Bait-and-switch withdrawal of a case or its settlement after protracted pre-trial litigation was for two decades a favorite obstructionist tactic of the Cambridge Rent Control Board, which would deny landlords the rents they were entitled to under their own law, wait for the landlords to sue and pursue the suit for several years, then conveniently moot the issue by granting some relief, and thus force the landlord to sue all over again. It has become one of my hallmarks of a rotten administration.)
You won’t lay a suit on me
Meanwhile, in Mount Holly, the town was proceeding with its redevelopment, even as the elderly residents were holding out.
They refused to leave, meeting every few weeks just to hear the same news–that the township didn’t want to negotiate, and that there was no way to tell how long they’d be able to stay.
But the ten years of litigation, and the imminence of a Supreme Court hearing, led to an unexpected result:
Turn right here
[Continued tomorrow in Part 3.]