U.S. Appeals Court Reinstates R/E Developer's Fair Housing Suit Accusing Mostly-White Arizona City Of Racial Animus In Alleged Stonewalling Of Proposed Affordable Housing Project; City Council Ignored Its Own Experts' Recommendations To Green-Light Construction; Judge: Fierce Community Opposition Avoided Explicit References To Ethnicity, Instead Used 'Code Words' Referring To "Stereotypes Of Hispanics That Would Be Well-Understood In Yuma"

Courthouse News Service reports:

• A city council for a mostly white city in Arizona must face claims that racial animus inspired its stonewalling of affordable housing, the Ninth Circuit ruled [last week].
  
  Two real estate developers, Avenue 6E Investments and Saguaro Desert Land Inc., brought the challenge in 2009 after Yuma's city council denied their request to rezone a parcel of land to permit higher-density housing developments.
  
  Avenue and Saguaro's rezoning request had been the only rejection of 76 applications the council had considered in the three preceding years, [last week's] opinion on the case notes.
  
  The ruling also notes that Avenue and Saguaro have "a reputation as a developer of Hispanic neighborhoods based upon their development of several affordable housing projects in Yuma in which the majority of homes were sold to Hispanics."
  
  Though the developers accused the council of equal-protection clause and Fair Housing Act violations, a federal judge dismissed the complaint at summary judgment for failure to state a claim.
  
  Today's reversal by a three-judge panel in San Francisco blasts the lower court for not considering evidence that the city council capitulated to the protests of the development's opponents, "in the face of the city's own expert's recommendation to approve the request and its practice of generally granting these requests."
  
  Elizabeth Brancart, an attorney for the developers with the Pescadero, Calif., firm Brancart & Brancart, applauded the outcome. "We are very pleased with the decision and gratified that the Ninth Circuit recognized both the historical and current importance of the federal Fair Housing Act," Brancart said in an email.
  
  The 39-page opinion notes that the property at issue is on the western boundary of an area in Yuma's southeast portion, where most residents are white. Many homeowners there sent letters to the city council opposing the proposed development, according to the ruling.
  
  Although none of the letters specifically mentioned Hispanic people as a group, they contained such complaints as the development would create "a low-cost, high-crime neighborhood" and would be "catering" to low-income people.
  
  Finding that the developers' complaint "contains sufficient allegations that the city's decision was driven by animus to state a plausible claim for relief," the federal appeals court called dismissal of the disparate-treatment claim improper.
  
  "Community members' opposition to the developers' application, using language indicating animus toward a protected class, provides circumstantial evidence of discriminatory intent by the city," Judge Stephen Reinhardt wrote for a three-judge panel.
  
  There is precedent in which the use of "code words" may indicate discriminatory intent, according to the ruling.
  
  Although none of the statements by community members "expressly refers to race or national origin," they did "raise various concerns about issues including large families, unattended children, parking and crime," the ruling states.
  
  Reinhardt said these concerns consist of "stereotypes of Hispanics that would be well-understood in Yuma."
  
  And "in denying the rezoning, the city council's decision ran contrary to the unanimous recommendation provided by the city's planning and zoning commission, as well as the recommendation of the city planning staff," the ruling continues.
  
  Yuma's "singling out" of the developers' zoning request for denial "supports the developers' contention that the city had a discriminatory intent," Reinhardt added.
  
  Meanwhile the "sole ground" for summary judgment Yuma had raised alleged that southeast Yuma offered similarly priced housing elsewhere, the court noted.
  
  "We reject that ground and hold that when a developer seeks to rezone land to permit the construction of housing that is more affordable, a city cannot defeat a showing of disparate impact on a minority group by simply stating that other similarly-priced and similarly-modeled housing is available in the general area," Reinhardt said.
  
  Yuma's obligation to establish a "legitimate and credible basis" for its rezoning denial "is not an unreasonable burden," the judge added.

Source: Arizona Developers Have Case for Discrimination, Ninth Circuit Says.

For the court ruling, see Avenue 6E Investments LLC v. City of Yuma, No. 13-16159 (9th Cir. March 25, 2016).