Disparate Impact: The Natural Disaster Aid Inequities Storm On

As the Atlantic Hurricane season continues through the summer to the end of November, communities in the Southern United States are readying themselves for what the National Oceanic and Atmospheric Administration (NOAA) has suggested will turn out to be a “near-normal” season. [1] While stocking up on emergency items and tracking the paths of the hurricanes coming their way, some households are also bracing themselves for a more complicated storm of events that may follow hurricane season – the steps towards gaining financial recovery and aid. These very steps and their uneven responses between bodies of applicants reflect and magnify the inadequate measures taken by government agencies involved with natural disaster response, such as the Federal Emergency Management Agency (FEMA) and Department of Housing and Urban Development (HUD), to alleviate crisis, thus highlighting their culpability for disparate impact.

Janice Perry-Evans, resident of Houston, Texas, recounts her experience of dealing with the aftermath of Hurricane Harvey in 2017, which flooded her rental home and left her family without a place to stay. [2] As she put her efforts towards sourcing aid, she applied to FEMA, which gave her $2,500 to pay for a deposit and the first month’s rent. However, because Perry-Evans needed to provide transportation for herself to work and her children to school, the money went towards a new car – a decision which FEMA reprimanded her for when she returned to reapply for more housing aid. Following the interaction, Perry-Evans turned elsewhere to government agencies like the Small Business Administration (SBA) and HUD. However, she was told that her income as a mail carrier for USPS was too high to qualify for aid. The same income was not enough to meet her and her family's needs, and soon she signed a lease for a house in poor condition that was far more expensive than her old place.

Not much has changed since then. Although it can be argued that government agencies which are involved in providing natural disaster relief and aid, such as the FEMA and HUD, are liable for disparate impact of standard liability or unintentional discrimination, proving that this is the case may be more complicated. Various court cases in recent decades have certainly opened the debate surrounding disparate impact, including Griggs. v. Duke Power Co. (1971), Texas Department of Housing & Community Affairs v. Inclusive Communities Project Inc. (2015), and Greater New Orleans Fair Housing Action Center v. US Dept. of Housing and Urban Development (2011). Furthermore, there are countless stories and narratives that spell out the difficulties surrounding the tiring application process for financial aid and grants from government agencies like FEMA and HUD. In exploring the implications behind holding government agencies accountable, this article will discuss the history of disparate impact and its

application to fair housing, and evaluate the specific policies and formulas employed by FEMA and HUD,including their anti-discrimination plans.

The road to recovery after natural disasters often looks very different between low-income communities and their more affluent neighbors, the latter of whom can meet the rigid application requirements far easier than their counterparts. Even with aid, low-income neighborhoods and communities of color, which are more vulnerable even prior to a disaster, struggle to recover. For example, residents of communities with a majority population of people of color, face an average 31-point decline in credit score, whereas a majority white populated community faces a 4-point decline following a natural disaster. [3] The convoluted application process and changing grant formulas cause reasoning and allocations for aid to homeowners to change between each case and demonstrate that agencies do not always take the transparent route to assist these communities.

At its core, these actions and consequent inequity are an illustration of disparate impact of standard liability, which can be traced back to the 1971 case Griggs. v. Duke Power Co. Willie Griggs, the petitioner, challenged his employers and requirement of, “a minimum score on two separate aptitude tests in addition to having a high school education” on behalf of his African-American employees of the the Duke Power Company. [4] Griggs argued that the policy was discriminatory and violated Title VII of the 1964 Civil Rights Act. Ultimately, the Supreme Court decided that the policy was indeed discriminatory against African-American employees, but it also set forth a precedent that respondents of future cases regarding disparate impact would be liable only if their actions were found to have a “disproportionately adverse effect.” [5]

Though Griggs v. Duke Power Co. discussed disparate impact in the context of providing equal employment opportunities, Texas Department of Housing & Community Affairs v. Inclusive Communities Project Inc. later validated disparate impact claims in the context of the Fair Housing Act (FHA) of 1968. [6] In this case, the Inclusive Communities Project (ICP), based in Dallas, Texas, accused the Texas Department of Housing & Community Affairs (TDHCA) of disproportionately granting tax credits towards development between minority and Caucasian neighborhoods. However, ICP could not point to the statistics of the allocations alone to defend disparate impact, and instead had to prove that the distribution of tax credits was backed by “a compelling governmental interest and no less discriminatory alternatives existed.” [7] In other words, Texas Department of Housing & Community Affairs v. Inclusive Communities Project Inc. emphasized that racial and statistical disparities alone are not enough to support disparate impact, and that future claims must prove casualty, not just intention. In a 5-4 decision, the district court determined that the TDHCA was liable for disparate impact, and when TDHCA went to the U.S. Court of Appeals for the Fifth Circuit, they affirmed that the decision aligned with the standard of the HUD, which was responsible for enforcing the FHA. Accordingly, HUD, to this day, takes care to break down the FHA and describe specific items that are protected and prohibited in their

online resources. HUD summarizes that under the FHA, “Housing discrimination is illegal in nearly all housing, including private housing, public housing, and housing that receives federal funding,” and creates policies that abide by this general statement. [8]

However, the HUD themselves faced accusations of utilizing a grant formula that violated the Fair Housing Act in the 2011 in Greater New Orleans Fair Housing Action Center v. U.S. Dept. of Housing and Urban Development – which gave rise to further questions about the effectiveness and equity of existing agency infrastructure for determining aid allocation. [9] This case arose following Hurricane Katrina in 2005 when HUD created the Road Home Program, which provided $11 billion to homeowners to assist with redevelopment. In the filing, plaintiffs alleged that under the Road Home Program formulas, grants given to African-American homeowners were more likely to be given grants based on the pre-storm values of their homes, whereas their white counterparts were more likely to receive grants based on the cost of repairs. [10] As the value of similar homes in predominantly Black neighborhoods was usually less than those in predominantly Caucasian neighborhoods, the grants given to white homeowners were more generous than those given to Black homeowners. Thus, plaintiffs argued that disparate impact had taken place. Ultimately, the case was settled, and the state of Louisiana provided additional funding for Black homeowners. In terms of reevaluating additional funding, it was settled that homeowners must meet additional requirements such as living in one of the four most affected areas or having received an original grant amount severely impacted by their pre-storm home value. While the settlement better accommodated these homeowners, the situation raised concerns if the policies used by government agencies were suitable for all communities regardless of income.

Above all, the biggest question raised by the plaintiffs and the district court was whether formulas and other actions taken by government agencies had led to an uneven recovery, and if agencies had truly taken the steps to accommodate for potential obstacles such as access. For example, naturally, more affluent households are better able to respond to applications for financial aid, due to easier access to things such as proper paperwork and computers. The 2022 Statutory Report, by the U.S. Commission on Civil Rights, which investigated the federal response to Hurricanes Harvey and María, confirmed this. [11] The report concluded that guidelines regarding applying for aid need to be made more transparent and simplified. By appealing to experts and testimonies of natural disaster survivors, the U.S Commission on Civil Rights also recommended more efficient data and information sharing on all levels of government to meet FEMA’s access points for assessment and a more flexible approach to determine aid allocations to accommodate those in need who lack “electricity and telecommunication access,” more comprehensively. [13]

FEMA and HUD have accordingly taken preventative measures against discrimination and disparate impact, with FEMA housing the External Civil Rights Division to enforce “civil right

obligations,” and reference legislation and executive orders that they observe, such as the aforementioned Title 44 of the Code of Federal Regulations. [14] Furthermore, in their report “A Whole Community Approach to Emergency Management: Principles, Themes, and Pathways for Action,” FEMA outlines mechanisms to counter instances of discrimination, though research has suggested that such methods are inaccurate and inadequate. [15] Other objectives to address discrimination, such as the “FEMA Equity Action Plan” usually emphasize community efforts and usage of their departments such as their Complaints Office. [16]

However, as stated before in government reports, relaying efforts back towards affected communities and surface-level methods of measurements is not enough to prevent disparate impact. Instead, in utilizing federal resources, a more streamlined approach within the bureaucracy and related agencies may prove to be more effective. Studies indicate that a better-coordinated effort by both community and government leaders, and complementary investments throughout better-constructed multi-stage reconstruction efforts are needed. [17] Furthermore, when it comes to taking preventative action prior to natural disasters, it has been suggested that it would be more effective for agencies to look into the structural reasons behind community resilience and weakness to community-wide disasters as opposed to relying on surface-level methods of measurement.

At its core, a review of these policies and actions, and thus potential solutions, taken by FEMA and HUD should be taken under the umbrella of the Fourteenth Amendment. If, accordingly, all citizens are provided equal protection and due process in the case of property deprivations – those affected by the actions of FEMA and HUD should not only be able to petition their case and demand personal reparations – but push for a broader change in a system that directly affects them. Equal protection – as the amendment promises – should be the focus of such government organizations moving forward.

The FHA has long been used to protect citizens in “regular circumstances” and address inequality, but income and racial lines still persist between communities. Natural disasters often make these divisions worse. The exact language of the FHA does not mention natural disasters, and its reference in court cases regarding natural disaster reparations is a relatively new approach. Much of this has to do with the fact that FEMA and HUD are newer additions to federal disaster policy, both agencies having been founded in the late 1900s, and thus, reorganizations of funding and authority change constantly within each program. [18] This, paired with the blurry lines of proving disparate impact, makes it difficult to precisely state that FEMA and HUD can be liable for disparate impact. Government reports and policy examinations will, however, prove that, though not intentional, disparate impact has been perpetrated by the agencies through their complex aid application and guidelines, and limited actions to adhere to civil rights obligations. Though not expressly proven guilty, there is much to improve about the current approach of FEMA and HUD toward allocating aid to citizens.

Edited by Kay Zou

[1] “NOAA Predicts a Near-Normal 2023 Atlantic Hurricane Season,” National Oceanic and Atmospheric Administration, May 25, 2023, https://www.noaa.gov/news-release/2023-atlantic-hurricane-season-outlook.

[2] Rebecca Hersher, and Robert Benincasa, “How Federal Disaster Money Favors the Rich,” NPR, March 5, 2019, https://www.npr.org/2019/03/05/688786177/how-federal-disaster-money-favors-the-rich.

[3] Caroline Ratcliffe, William J Congdon, Alexandra Stanczyk, Daniel Teles, Carlos Martín, and Bapuchandra Kotapati, “Insult to Injury: Natural Disasters and Residents’ Financial Health,” Urban Institute, April 2019, https://www.urban.org/research/publication/insult-injury-natural-disasters-and-residents-financial -health

[4] Griggs v. Duke Power Company, 401 US 424 (4th Cir. 1971). [5] Griggs v. Duke Power Company.

[6] Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc. 576 US (5th Cir. 2015).

[7] Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project.

[8] “Housing Discrimination under the Fair Housing Act,” U.S. Department of Housing and Urban Development (HUD), https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview#_Wh at_Types_of.

[9] Greater New Orleans Fair Housing Action Center v. US Dept. of Housing and Urban Development (D.D.C 2008).

[10] Greater New Orleans Fair Housing Action Center v. US Dept. of Housing and Urban Development.

[11] U.S. Commission on Civil Rights, “Civil Rights and Protections During the Federal Response to Hurricanes Harvey and María,” 2022, https://www.usccr.gov/files/2022-09/2022-statutory-report-fema.pdf.

[12] U.S. Commission on Civil Rights, “Civil Rights and Protections,” 2022.

[13] U.S. Commission on Civil Rights, “Civil Rights and Protections,” 2022.
[14] “External Civil Rights Division,” Federal Emergency Management Agency, July 7, 2023,

https://www.fema.gov/about/offices/equal-rights/civil-rights.

[15] “A Whole Community Approach to Emergency Management: Principles, Themes, and Pathways for Action,” Federal Emergency Management Agency, December, 2011, https://www.fema.gov/sites/default/files/2020-07/whole_community_dec2011__2.pdf.

[16] “Federal Emergency Management Agency Equity Action Plan,” Federal Emergency Management Agency, February 23, 2022, https://www.fema.gov/sites/default/files/documents/fema_equity-action-plan.pdf.

[17] Institute of Medicine of the National Academies, Healthy, Resilient, and Sustainable Communities After Disasters Strategies, Opportunities, and Planning for Recovery, Washington, D.C: National Academies Press, 2015.

[18] “History of Federal Disaster Policy,” History of Federal Disaster Policy, 2015, https://www.huduser.gov/portal/periodicals/em/winter15/highlight1_sidebar.html.