Challenge To Housing And Revitalization Project Found Not Cognizable Under The Fair Housing Act And California Fair Employment And Housing Act

• Published date: 14 March 2022
• Subject Matter: Real Estate and Construction, Real Estate
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Ms Brooke Miller

In a case potentially overshadowed by the California Supreme Court's same-day denial to hear a request to stay a cap on student admissions at UC Berkeley,¹ the Second Appellate District Court (Div. 2) issued its opinion in Crenshaw Subway Coalition v. City of Los Angeles. This decision found, in effect, that the federal Fair Housing Act (FHA) and its State law counterpart, the California Fair Employment and Housing Act (FEHA), do not protect established minority-majority communities against displacement due to gentrification.

Crenshaw Subway Coalition involved a challenge to a project located in the "Crenshaw Corridor" in the City of Los Angeles. The project, which had been in the works since 2008, would redevelop an existing mall to add significant commercial, office and residential uses over its 20-year construction timeline, including 961 new residential units with a 10% affordable set-aside. The developer also agreed to hire 25% of the workforce to build and operate the project from the local community.

Petitioner Crenshaw Subway Coalition, an anti-gentrification nonprofit comprised of "residents, property owners and merchants in the South Los Angeles community," contended that the Crenshaw Corridor functioned as the "political, cultural and commercial heart of Black Los Angeles" since the 1960s, with census data demonstrating that 43% and 47% of the residents in the Crenshaw Corridor are Black and Latinx, respectively, and that 65% and 25% of the residents in the nearby Leimert Park neighborhood are Black and Latinx, respectively. Petitioner argued the project would lead to an influx of new, more affluent residents that would result in increased rents and property values, and would ultimately push lower-income Black and Latinx residents out of the neighborhood. Therefore, according to Petitioner, the project would have a "disparate impact" prohibited by FHA and FEHA by displacing Black and Latinx populations. As part of its petition, Crenshaw Subway Coalition sought an injunction against the project until adequate measures were in place to ensure such displacement would not occur.

Relying on the 2015 U.S. Supreme Court decision in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519, the Second District found Crenshaw Subway Coalition's claims under the FHA and FEHA...