Yesterday the U.S. Supreme Court decided Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, a case about the Fair Housing Act, a law passed by Congress in 1968 to combat housing discrimination:
De jure residential segregation by race was declared unconstitutional almost a century ago, but its vestiges remain today, intertwined with the country’s economic and social life. Some segregated housing patterns can be traced to conditions that arose in the mid-20th century. Rapid urbanization, concomitant with the rise of suburban developments accessible by car, led many white families to leave the inner cities. This often left minority families concentrated in the center of the Nation’s cities. During this time, various practices were followed, sometimes with governmental support, to encourage and maintain the separation of the races…
In April 1968, Dr. Martin Luther King, Jr., was assassinated in Memphis, Tennessee, and the Nation faced a new urgency to resolve the social unrest in the inner cities. Congress responded by adopting the Kerner Commission’s recommendation and passing the Fair Housing Act. The statute addressed the denial of housing opportunities on the basis of “race, color, religion, or national origin.” Civil Rights Act of 1968….
The question before the court was whether the FHA can be used for claims of ‘disparate impact’ – that is policies that have the result of affecting minorities and whites differently, even though there is no proof that the policymakers’ intention was to discriminate on the basis of race. The specific case here involves a federal rent-subsidy plan (Section 8) for poor families. The plaintiffs claimed that Texas agencies were contributing to residential racial segregation by steering minority Section 8 recipients to areas that were already disproportionately minority. The Plaintiffs had no proof that this was being done intentionally, so sued under disparate impact. The Supreme Court held that since most other American anti-discrimination laws can be used in this way, so can the FHA:
Recognition of disparate impact liability under the FHA also plays a role in uncovering discriminatory intent: It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment. In this way disparate-impact liability may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.
But disparate-impact liability has always been properly limited in key respects that avoid the serious constitutional questions that might arise under the FHA, for instance, if such liability were imposed based solely on a showing of a statistical disparity. Disparate-impact liability mandates the “removal of artificial, arbitrary, and unnecessary barriers,” not the displacement of valid governmental policies. The FHA is not an instrument to force housing authorities to reorder their priorities. Rather, the FHA aims to ensure that those priorities can be achieved without arbitrarily creating discriminatory effects or perpetuating segregation.
So the United States already had a nationwide law prohibiting private housing discrimination in 1968, and has interpreted both it and similar laws to cover even discrimination that occurs unintentionally.
Let’s turn to Germany. German jurists will point out that the Article 3 of the German federal constitution (the Grundgesetz) prohibits racial discrimination on the part of the state, and that this provision can, in limited circumstances, be applied to transactions between private parties (the idea of so-called Drittwirkung). In practice, however, this possibility is practically irrelevant and is rarely-used. This is one reason the EU constantly prodded Germany to adopt a comprehensive, modern anti-discrimination law. Germany resisted until finally, in 2006, it adopted what’s known as the Allgemeines Gleichbehandlungsgesetz (AGG) or Equal Treatment Law. It was originally known as the Anti-Discrimination Law, but the title had to be watered down.
So what are the housing-discrimination provisions of the AGG? Here’s a short website (g) from a law firm that explains things pretty well. The main provision outlaws discrimination by private landlords on the basis of “race, ethnic ancestry, sex, religion or worldview, disability, age, or sexual identity”. Gosh, that sounds mighty progressive, you might be saying.
But actually, there are quite a lot of exceptions! For instance, if you’re renting a portion of the residence you currently occupy, you aren’t bound by the AGG at all. Seems reasonable enough. But then we get to a rather bigger loophoole: the so-called ‘small landlord’ exception. This provides that the full terms of the AGG do not apply to any landlord who puts on the market fewer than 50 residences. If you own 49 rental properties and are thus a ‘small landlord’ (!!), you are not permitted to discriminate on the basis of race or ethnic ancestry, but you can discriminate on all the other grounds as much as you want. Only when you rent more than 50 residences does the AGG apply in full force.
But wait, there’s more! Turns out there’s a loophole even here: a landlord may refuse to rent to someone in order to preserve ‘socially stable residential population structures’ and to preserve ‘balanced cultural relations’, whatever that means. Ironically, this provision of the law sells itself as an anti-discrimination measure: to prevent large concentrations of foreigners in a certain area, a landlord can refuse to rent to foreigners who wish to come there and live. Of course, the landlord then has to subsidize the rent of the foreigners he discriminated against so they can pay four times higher rent to live in the white part of town. Oh wait, no he doesn’t.
Also, if you want to sue a landlord for damages, you must do so within a 2-month limitations period, which is awfully short. Plus, without access to landlords’ documents through court-ordered discovery, you may have a hard time proving your case.
The doomsayers predicted a wave of litigation after the AGG was passed, but it never happened. Critics call the AGG a paper tiger (g) and have routinely called for it to be strengthened.
Germans take almost-sensual pleasure (g) in denouncing the ‘pervasive racism’ of American society. But the American legal system offers far more powerful tools for combating racial discrimination than Germany does.* In Germany, legal innovations that have long been the law of the land in the USA are still fiercely opposed by all but the most left-wing parties.
* So do I support anti-discrimination laws? You betcha, as Sarah Palin might say. But sometimes, you might protest, I point to grim realities that might seem to justify discrimination. I also sometimes point out that many racial and gender stereotypes have a firm basis in empirical reality, as pointed out in The Unbearable Accuracy of Stereotypes, as well as many other places.
This apparent conflict can be resolved by paying close attention to the is / ought divide, something many people don't seem to understand. Discrimination is, in certain contexts, entirely rational. From a heuristic perspective of using shortcuts to efficiently interpret the world, you might well conclude that you're unlikely to seriously screw up by hiring an all-male aerospace engineering workforce, given that 88% of all aerospace-engineering students are male. Sure, there might be a few talented women you overlooked, but with such a hugely skewed population of job applicants, the chance that you failed to hire a woman who was drastically more talented than the man you hired is pretty small. And you saved yourself the time and effort of reading the 12% of the applications submitted by women. Further, unlike with some jobs such as marketing or public relations, diversity for its own sake is unlikely to be a major selling point. The rocket either flies or it doesn't.
So that's the way the world is. But laws and regulations are about the way it ought to be. Societies should strive to extend equal opportunities to everyone, even if this means — as it surely will — increased inefficiency. The injustice done to the female job applicants by not even considering them for engineering jobs is considered more socially harmful than the efficiency losses imposed by requiring employers to give a fair shot to all applicants, even if they come from social groups which are unlikely to generate promising candidates. That's the proper balance to strike for many reasons, including individual justice and overall social harmony.