United States v. Starrett City Associates

840 F.2d 1096 (1988)

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Nature of the Case

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Facts

Starret City Associates (D) owned a housing development. State agencies had made substantial mortgage loans to D. D had racial quotas of 64% white, 22% black, and 8% Hispanic. D claimed these quotas were necessary to prevent the loss of white tenants, thus transforming the development into a minority complex. When vacancies occurred, applicants of race similar to the departing tenant were chosen and offered the apartments. Blacks had to wait longer than whites to get apartments. A group of black applicants brought an action against D alleging that D's tenanting procedures violated federal and state law by discriminating against them on the basis of race. The parties stipulated to a settlement. P commenced the present action to resolve the legality of D's policy and practice of limiting the number of apartments available to minorities in order to maintain a prescribed degree of racial balance. The United States (P) claimed that this was discriminatory, and violated the Fair Housing Act (FHA). D claimed that these quotas were for the benefit of the state and for the maintenance of an integrated community. P sued D under Title VIII of the Civil Rights Act of 1968. The district court found that apartment opportunities for blacks and Hispanics were far fewer than would be expected if race and national origin were not considered, that the white flight argument of D was undercut by expert testimony and the lack of difficulty that D had in finding 35 more apartments for blacks. The district court granted a summary judgment for P and permanently enjoined D from discriminating. D appealed.