217 F. Supp. 3d 1040
D. Ariz.2017Background
- Plaintiffs (Avenue 6E Investments, LLC and Saguaro Desert Land, Inc.) sought rezoning of a 42‑acre Yuma parcel from R‑1‑8 to R‑1‑6 to build ~198 smaller, lower‑priced homes (intended prices ~$125k–$160k); City denied the rezoning after neighborhood opposition.
- Neighbors opposed based on concerns that lower‑priced housing would increase crime and reduce property values; some comments contained racially charged language suggesting animus toward Hispanics.
- Plaintiffs sued under the Fair Housing Act (FHA) alleging disparate impact (and other claims); the Ninth Circuit reversed earlier dismissals and remanded for further consideration of plaintiffs’ statistical showing.
- Plaintiffs’ expert (Dr. Bradford) used HMDA loan data and comparable developments’ sale prices to show that the Hall proposal’s price band would have a higher share of Hispanic buyers (~45%) than the price band of the larger‑lot development that will result from denial (~30% Hispanic), producing statistically significant disparities.
- The City challenged the statistical methodology (choice of comparison group, reliance on HMDA excluding cash sales, whether larger‑lot development would actually occur) and offered zoning‑goal and reliance on neighbors as nondiscriminatory justifications.
- The court denied the City’s renewed summary‑judgment motion, finding plaintiffs presented sufficient evidence for a prima facie disparate‑impact claim and that disputed facts remained about the City’s proffered justifications and less‑discriminatory alternatives.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prima facie disparate‑impact showing | Bradford’s HMDA‑based analysis shows a statistically significant reduction in Hispanic share between the plaintiffs’ proposed price range and the neighboring higher price range | Plaintiffs’ statistics are speculative and not tied to actual affected purchasers | Court: Bradford’s analysis suffices to create a triable prima facie disparate‑impact claim |
| Proper comparison group | Compare purchasers in plaintiffs’ proposed price band to purchasers in neighboring larger‑lot price band (what denial preserves) | Must limit to actual would‑be purchasers of plaintiffs’ development (or use local population) — broad market stats are improper | Court: Using actual Yuma buyer data in narrowly defined price bands is an acceptable proxy; Darensburg distinction addressed |
| Data reliability (HMDA, cash sales, census) | HMDA reflects actual mortgage buyers and is a reasonable proxy for applicant flow; census household data also consistent | HMDA omits cash/seller‑finance (large share per City expert); Census blocks misstate household composition | Court: Disputes over cash sales and best data source create genuine factual issues; cannot reject Bradford as a matter of law |
| Municipality’s justification / less‑discriminatory alternatives | Denial lacked adequate nondiscriminatory necessity; plaintiffs proposed buffers as less‑discriminatory alternatives; neighbor comments indicate possible discriminatory motive | Denial justified to preserve neighborhood character, neighbors’ reliance on existing zoning/plat, and because buffer compromise was rejected | Court: City’s proffered justifications raise factual disputes (e.g., conditional plat expiration, unanimous planning commission approval, evidence of alternative buffer); not entitled to summary judgment |
Key Cases Cited
- Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, 135 S. Ct. 2507 (U.S. 2015) (recognized disparate‑impact claims under the FHA and set burden‑shifting framework)
- Avenue 6E Investments, LLC v. City of Yuma, 818 F.3d 493 (9th Cir. 2016) (Ninth Circuit reversed dismissal and directed consideration of plaintiffs’ statistical showing and evidence of racially charged comments)
- Darensburg v. Metro. Transp. Comm’n, 636 F.3d 511 (9th Cir. 2011) (regional statistics insufficient where they do not show impact on the particular projects at issue)
- Hallmark Developers, Inc. v. Fulton County, 466 F.3d 1276 (11th Cir. 2006) (rejected disparate‑impact claim where oversupply of comparable housing negated impact)
- Budnick v. Town of Carefree, 518 F.3d 1109 (9th Cir. 2008) (municipal interest in neighborhood character/zoning goals can be legitimate governmental interests)