The Heritage Foundation

Executive Memorandum #168

July 16, 1987

July 16, 1987 | Executive Memorandum on

The Unfair Fair Housing Bill

(Archived document, may contain errors)

7/16/87 168


C ongress currently is seeking ways of strengthening- the 'enforcement of laws prohibiting racial discrimination in housing. The aim is to make it easier to prpsecute those who break the law. To do so, Congress is foc using on a so-called fair housing bill, S. 558, co-sponsored by Senators Edward Kennedy, the Massachusetts Democrat, and Arlen Specter, the Pennsylvania, Republican. But this is a seriously flawed attempt in pursuit of a worthwhile goal.i It is long on en forcement but short on the safeguards necessary to protect:the rights of U.S. citizens falsely charged with discrimination.

If Congress wishes to beef up enforcement and penalties, then it must specify very clearly what is discrimination. Outright refusal to rent or sell on the basis of race, for example, can be dealt with by straightforward prohibitions. But reasonable practices that do not involve an intent to discriminate should! not be deemed illegal discrimination subject to harsh penalties. The dange r with the bill is that vague and uncertain standards of liability invite the harassment of innocent landlords and sellers.

Some states and localities already are adopting - housing -!quota policies to mix races in neighborhoods through various forms of in ducements! or pressures. The definition of "discrimination" needs to make clear that the federal legislation does not authorize such quota policies, and that real estate brokers and others will not break federal law merely by failure to help enforce such q uestionable quotas. Indeed, federal legislation should reaffirm that such state housing racial quotas- are--- illegal for they establish racial classifications and discriminatory practices. The U.S. Department of Justice currently is challenging such quot as in court.

Lack of Safeguards. The Kennedy-Specter bill substantially increases the penalties for discriminatory practices, adding new punitive damages and criminal penalties. It would establish a system of administrative law courts and judge's to adjudi cate and impose such penalties without the constitutional protection of trial by jur r other safeguards normally incorporated in the judicial pr9cess.. This lack of ,Y9 0 C sateguards would seriously endanger the rights of innocent Americans in cases whic h tend to be very emotional and political in nature. Moreover,, the use of administrative tribunals elsewhere has not led to a quick resolution of cases. Either party is still able to resort to court after the process is over. - The Administration

proposes instead a binding arbitration system to force a speedy but fair resolution of disputes. This would likely be far more effective than cumbersome tribunals.

The Kennedy-Specter bill would also provide federal grants for local community groups to help eli minate housing discrimination and enforce the law. But this program simply would channel taxpayer money to local political activist groups, who doubtless would use the resources to campaign for their own ideological agendas, such as rent control, prohibit ions on evictions, and restrictions on development. Federal funding of these activities is an abuse, of the taxpayer. Congress should be eliminating the funding of political activists where it already exists, not expanding it to new areas.

In additio n, the Kennedy-Specter bill would add new prohibitions on insurance companies denying coverage to prospective customers on the ibasis of race. Yet there is no evidence of significant discrimination by insurers. 1 lWe danger--in- the- legislation is that i n surers would be prevented from refusing coverage based on a valid assessment of risk in inner city neighborhoods. Such restrictions would not only be unfair to the insurers but would just make it generally much more difficult and expensive to obtain housi ng insurance.

FAchuling Drugs and AlcohoL The Kennedy-Specter legislation adds vague new prohibitions against discrimination on the basis of handicap. While this is needed, it can be abused. To prevent this, language needs to be added to the bill to exclud e from the definition of handicap any impairment due to alcoholism, drug abuse, or other conditions that are a potential danger to the:safety or property of others. Moreover, the proposed legislation requires landlords, to allow handicapped renters, at th e renter's expense, to modify their leased premises.-to suit their handicap. But such modifications should be limited to minot. alterations. If not, landlords could face enormous and unexpected costs when they rent theirproperty. Congress should require th e renter to bear the cost of restoring the premises to their original condition. The proposed legislation further defines discrimination against the handicapped as desigm*ng or constructing any multifamily dwelling not providing for equal access and use by the handicapped. This would, in effect, establish the precedent of national building code regulations which may require housing I features with substantial costs well in excess of benefits. This unneeded regulatory burden would significantly increase hous ing costs for lower income Americans and likely reduce housing construction.

With careful consideration and protections for the rights' of all U.S. citizens, a comprehensive and effective fair housing bill is possible. Yef the Kennedy-Specter bill would im pose heavy financial burdens on property owners and open the door further to racial quotas and politically motivated nuisance suits. If lawmakers focus solely on the goal of enforcement and pay inadequate attention to the rights of the falsely accused, or the unintended burdens such legislation could impose, the new housing legislation will be fair in name only. Prepared for Ile Heritage Foundation by Peter J. Ferrara, a Washington attorney, formerly a member of the White House Office of Policy Development


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