Noel v. City Of New York

Background

Shauna Noel and Emmanuella Senat, who are African-American, sued the City of New York under the federal Fair Housing Act and the New York City Human Rights Law. They challenged the City’s community preference policy for distributing affordable housing through lotteries. The policy reserves 50% of the affordable units in a project for applicants who generally live in the community district where the project is located. The plaintiffs alleged that the policy has a racially discriminatory effect, perpetuates residential segregation, and was adopted, expanded, and maintained with discriminatory intent.

The plaintiffs moved for partial summary judgment on their discriminatory-effect claims. The City cross-moved for summary judgment on all claims. Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law.

Disparate-impact claim

The court granted the City summary judgment on the plaintiffs’ disparate-impact claim under both the Fair Housing Act and the New York City Human Rights Law. A disparate-impact claim challenges a facially neutral policy that allegedly disproportionately harms a protected group.

The plaintiffs relied primarily on expert analyses comparing applicants who lived in the relevant community district with applicants who lived elsewhere. Their evidence showed that the policy could advantage or disadvantage different racial groups depending on the racial makeup of the community district where a project was located. The court held that this did not establish that African-American New Yorkers as a group were disproportionately harmed by the policy. Instead, the evidence showed that the policy’s effects generally tracked the preexisting racial demographics of each community district: the dominant racial group in a district tended to receive the greatest benefit there, while other groups could be disadvantaged.

The court also rejected the plaintiffs’ argument that it was enough to show that applicants had less equal access to housing opportunities in some districts. Because the plaintiffs did not claim that particular community districts offered greater opportunities than others, they did not show the required race-based disproportionate impact. The court therefore granted the City’s motion for summary judgment on the disparate-impact theory.

Perpetuation of segregation

The plaintiffs also argued that the policy unlawfully perpetuates segregation. The court explained that they would need to show that the policy has a legally significant effect on inhibiting integration. It rejected the plaintiffs’ proposed rule that it would be enough to show that the policy permits less integration than an alternative lottery without the community preference. But it also rejected the City’s argument that a policy cannot perpetuate segregation if it produces any integration at all.

Both sides presented competing expert analyses using data from affordable-housing lotteries. The City’s expert concluded that the lottery process with the policy generally reduced segregation and that the policy had a trivial and insignificant effect on reducing integration compared with a lottery without the policy. The plaintiffs’ expert used a different method and concluded that community-preference and non-community-preference awards had substantially different effects on integration.

The court held that the conflicting expert evidence created factual disputes. Deciding which expert methodology was more persuasive, weighing the evidence, and assessing witness credibility were matters for a fact-finder rather than the judge at summary judgment. The court therefore denied both parties’ motions for summary judgment on the claim that the policy perpetuates segregation.

Intentional discrimination

The City also sought summary judgment on the plaintiffs’ claim that it intentionally discriminated based on race. The plaintiffs argued that the City knowingly responded to people seeking to preserve residential segregation. The City argued that it adopted and maintained the policy for legitimate reasons, including preventing displacement of low-income residents and reducing opposition to new affordable housing.

The plaintiffs presented evidence that opposition to affordable housing and neighborhood change may have been partly motivated by resistance to racial change. They also pointed to evidence that the City’s stated anti-displacement rationale might be pretextual, including evidence that neither the length of an applicant’s residence in the neighborhood nor the applicant’s housing conditions affected eligibility for the preference.

The court held that the record presented a triable factual issue about whether, and to what extent, fear of racial change—as opposed to fear of displacement caused by rising costs—motivated the City’s maintenance of the policy. The court therefore denied the City’s motion for summary judgment on the intentional-discrimination claim.

New York City Human Rights Law claims and disposition

Because the court denied summary judgment on the federal claims based on perpetuation of segregation and intentional discrimination, it likewise denied the City summary judgment on the corresponding New York City Human Rights Law claims. The court granted the City summary judgment on the New York City Human Rights Law disparate-impact claim for substantially the same reasons it granted summary judgment on the federal disparate-impact claim.

The court denied the plaintiffs’ motion for summary judgment in its entirety. It granted the City’s motion for summary judgment as to the discriminatory-effect claim to the extent that claim rested on a disparate-impact theory, and denied the City’s motion in all other respects. The court also rescheduled the final pretrial conference and referred the case to Magistrate Judge Parker for settlement purposes.