Two Fair Housing Cases Settled

Mount Holly, NJ Disparate Impact Litigation

On November 13, 50 neighborhood residents and Mount Holly Gardens Citizens in Action, Inc. reached an agreement with Mount Holly Township, New Jersey, ending a decade of litigation over the redevelopment of the “Gardens” neighborhood.

The Mount Holly case is currently pending before the U.S. Supreme Court, with argument scheduled for December 4, 2013. The settlement agreement means that it is not necessary to have the case heard by the Supreme Court.

The Gardens is the only predominately minority neighborhood in Mount Holly Township. The redevelopment plan at issue would have largely demolished the neighborhood, which once had more than 300 row houses, to build new housing that few current residents could afford, thus excluding most of the town’s minority residents.

For this reason Gardens residents sued, asserting that the redevelopment plan violated the Fair Housing Act. Over the Act’s 45-year history, lower courts and HUD have consistently held that it outlaws both intentional discriminatory acts as well as policies or practices that have an unnecessary or unjustified “disparate impact” based on race, color, religion, sex, disability, familial status, or national origin. A federal court of appeals held that the residents established that they would experience an unlawful “disparate impact” under the redevelopment plan.

The key aspects of the settlement agreement include:

  • Forty-four new homes will be constructed, 20 of which will be for current residents of the Gardens in exchange for allowing their existing homes to be demolished. Those 20 homeowners will not experience adverse economic consequences as a result of moving.
  • Seven households who elected to relocate out of the neighborhood will receive a relocation allowance based in part on the appraised value of their homes.
  • The remainder of the Gardens development will go forward, creating additional new homes and commercial and retail development.

Olga Pomar of South Jersey Legal Services, Inc., lead counsel for the plaintiffs, said, “This settlement offers our clients the opportunity they have always wanted – to be able to remain in Mount Holly and participate in the revitalization of their community if they so choose, rather than being uprooted from the homes they have lived in for many years, and separated from their neighbors, friends and families.”

Co-counsel Susan Ann Silverstein from the AARP Foundation said, “We are delighted with the outcome because it ensures that the older residents will be able to remain in their community as they age in safe and well-designed homes. Residents of all ages have worked together for the long haul to obtain this tremendous settlement and to uphold fair housing and equal opportunity for everybody in Mount Holly.”

Joliet, IL Discrimination Claims

Also on November 13, HUD, the Department of Justice, and the City of Joliet, IL settled housing discrimination litigation that will preserve affordable housing for low income residents for at least the next 20 years. The agreement resolves claims in two lawsuits in which the federal government contended that the city had discriminated against African Americans in violation of the Fair Housing Act when it attempted to condemn a federally subsidized affordable housing development (see Memo, 8/19/11). The development, known as Evergreen Terrace, contains 356 units of affordable housing currently operated by a private owner under a 20-year contract with HUD.

According to a HUD media release, key features of the agreement include:

  • Tenants who wish to remain in Joliet will not be displaced unless and until Joliet finds suitable housing in the city that will also accept residents’ federal housing subsidies. The city will also provide relocation counseling to displaced residents through a HUD-approved organization and will provide all assistance required by the Uniform Relocation Act;
  • The city must preserve at least 115 of the low income housing units for the next 20 years. Current and former Evergreen Terrace residents have first priority for residency. The housing would initially remain at the property, but the city could seek to transfer the subsidy to another development in Joliet pursuant to HUD program requirements. Transfers could not be carried out until replacement housing is ready for occupancy;
  • To the extent any other housing is developed at the property, it would include the minimum number of affordable units required by the Low-Income Housing Tax Credit Program;
  • The city must construct and maintain a community center to provide services to current and former Evergreen Terrace residents and other low and moderate income residents of the city;
  • Most of the Evergreen Terrace site must be used for public purposes for at least 20 years;
  • The city’s CDBG and HOME funds, which had been withheld, are restored.

A media release from Mount Holly plaintiff’s attorneys is at: HUD media release about the Joliet settlement is at: