A claim of disparate impact based on gentrification in predominantly minority communities is not cognizable under the Fair Housing Act. Crenshaw Subway Coalition v. City of Los Angeles, 75 Cal.App.5th 917 (2022). 

A development project in the “Crenshaw Corridor” of South Los Angeles was approved by the Los Angeles City Council.  The 43-acre project proposed increasing, among other things, the density of housing, commercial, retail and office space. 

Plaintiffs sued the City to enjoin the project under the Fair Housing Act (FHA) (and the State’s equivalent: the Fair Employment and Housing Act (FEHA)) based on a theory of gentrification – namely, that the project would lead to an influx of new, more affluent residents, resulting in increased rents that would push low-income residents out of their neighborhoods.  Plaintiffs claimed that that since the majority of residents in or near the project site were African-American and Hispanic, the project violated the FHA because there was disparate impact on minority community housing.

The court rejected the plaintiff’s theory of gentrification, observing that the FHA only prohibits policies and practices that discriminate—by intent or by effect—on the basis of “race, color, religion, sex, familial status, or national origin” and does not reach discrimination on the basis of socioeconomic status. If gentrification were a valid theory for FHA relief, the court said, “city officials would be required to avoid gentrification-based displacement for a potential development located in a majority minority community, but not for one in a mostly white community.” This gentrification-based claim was not cognizable under the FHA because it would be inconsistent with U.S. Supreme Court precedent holding that the FHA may not be used to inject race into land use decisions, to discourage the construction of affordable housing, or to perpetuate segregation. The considerations underlying that precedent were equally applicable to claims under the FEHA. The court explained that both the FHA and FEHA were established to, among other things, eliminate historically segregated communities, housing patterns, and discriminatory practices, not to preserve minority-majority communities or address discrimination on the basis of wealth. 

The court also upheld dismissal of plaintiffs’ CEQA claim, filed over a year after approval of the vesting tentative map for the project. The City’s subsequent approval of a development agreement and height and zoning district changes necessary to implement the Project did not restart the limitations period. That implementation of the project was contingent on further approvals did not negate the entitlement conferred by approval of the map, and thus did not preclude the approval of the tract map from constituting an “approval” for purposes commencing the statute of limitations under CEQA.