Racial integration and community revitalization: Applying the fair housing act to the low income housing tax credit

At the heart of a debate about the future of American race, housing, and urban policy are two important lawsuits recently filed in state courts in New Jersey and Connecticut. Plaintiffs challenge the authority of their respective state housing finance agencies to fund subsidized units, with U.S. Treasury issued tax credits, in neighborhoods of racial and social isolation. These cases seek clarification of the Fair Housing Act of 1968 (Title VIII), parallel state fair housing provisions, the equal protection clauses of state and federal constitutions, and the meaning of the two most important state fair housing cases ever decided. On a broader policy level, the litigation highlights critical differences between civil rights advocates and regionalists on one side and many practitioners of community development and urban political leaders on the other. Civil rights forces see racial segregation, and the integrally related concentration of poverty, in the housing market at the core of the problem of individual opportunity and urban redevelopment in America. They argue that building and rebuilding low-income housing in the poorest neighborhoods deepens - or at least makes permanent - racial and economic barriers between individuals and metropolitan communities. Community development forces argue that the building and rebuilding of low-income housing in poor segregated neighborhoods must continue and is the only way, within the existing political context, to revitalize these places. Further, they would argue that civil rights concerns are not applicable to the allocation of tax credits, and even more importantly Congress actually gives preference in statute to using these tax credits in densely poor segregated neighborhoods. The outcome of these cases, and the broader resolution of these policy conflicts, could mark an important turning point in U.S. civil rights law and housing and urban policy.