Federal Appeals Court Rejects Challenge to Kyle, Texas, Ordinance

Words: Dan Kamys

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The U.S. Fifth Circuit Court of Appeals has rejected an appeal filed by the NAACP and National Association of Home Builders, who claimed that revised zoning standards adopted by the City of Kyle, Texas, violate the Federal Fair Housing Act (FHA). The Federal Court’s decision (Case No. 09-50352) published on Nov. 11, 2010, essentially affirms the Federal District Court decision in March 2009, which had rejected the legal challenge on the basis that the plaintiffs had not presented any evidence that the city’s revised zoning standards had discriminated against African-Americans or Hispanics.

The case was being followed closely by cities throughout the region and beyond, because of the potential impact on local planning and development decisions.

The lower court judgment was affirmed unanimously by the Fifth Circuit, which found that neither the NAACP nor the NAHB had standing to sue the City under the FHA. In a nutshell, the court embraced all of Kyle’s standing arguments and held, in particular, that neither the NAACP nor the NAHB had established any direct injury to their members or any substantial diversion of their own financial resources traceable to the particular effect of Kyle's regulations.

Kyle (est. pop. 26,000), located about 20 minutes south of Austin, is known in the area for having a rapidly growing population, a “minority majority” City Council, a large Hispanic population (57 percent), and for having a large inventory of entry-level affordable housing. Kyle’s zoning ordinance, revised in 2003, established minimum standards for residential construction in the city: a) minimum of 1,600 square feet, up from 1,400 square feet; b) minimum lot size of 8,190 square feet, 20 percent greater than previously; c) garages of not less than 480 square feet, and d) constructed with exteriors of 100 percent masonry, encompassing clay (brick), concrete, cement-based or stone options.

The zoning ordinance was amended again in November 2005, when the city, anticipating litigation, raised the fee for residential building permits by 25 percent to cover the expected litigation costs. When Austin-area home builders and the NAACP joined forces and singled out Kyle’s revised zoning ordinance, which included new masonry standards, as being “anti-growth” and, in effect, discriminatory toward minorities and low-income people, the folks in Kyle felt a mixture of disbelief and amusement, according to former City Manager Tom Mattis.

In November 2005, the national NAACP, Texas State Conference of NAACP, Austin Branch of NAACP together with the National Association of Home Builders and the Home Builders Association of Greater Austin filed suit in Federal District Court. The plaintiffs claimed that the revised zoning ordinance violated the Fair Housing Act and that the city retaliated against the HBA by raising the permit fees.

U.S. Dist. Court Judge Lee Yeakel heard the case in February 2008 and handed down his ruling in favor of the city on March 30, 2009. Judge Yeakel stated in his decision that “the Austin HBA and NAACP failed to conduct a proper statistical analysis” to support their claim that the city was trying to price minorities out of the housing market in Kyle. He said most of the home builders who are active in Kyle have adjusted well to the new minimum standards, because they want to build a product that people will want.

The full text of the appeals court decision can be found at

www.ca5.uscourts.gov/opinions%5Cpub%5C09/09-50352-CV0.wpd.pdf.

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