Developers lose Fair Housing Act case against Orange County community

A housing developer wanted to build a 181-unit project in Orange County, New York, but the Village of Monroe denied its applications for a building permit, prompting the developers to sue for housing discrimination, claiming the denials were motivated by animus against a Hasidic Jewish community, to which the developer intended to market the development. The developers lose the case, not because the Village did not demonstrate anti-Jewish animus, but on more mundane procedural grounds.

The case is BMG Monroe LLC v. Village of Monroe, issued on February 16, more than one year after the Second Circuit heard oral argument. Cases like this are not uncommon in the Hudson Valley. About 10 years ago, someone wanted to build a large community in Sullivan County but met up against community opposition, leading the developers to also claim anti-Semitic discrimination. That case went kaplotz, as the civil rights laws pose a variety of hurdles to successful cases like this.

In today's hurdle, the issue is ripeness. You cannot sue in federal court over land-use discrimination without exhausting all remedies available to you at the local level. When that process is done, the case is ripe for federal court. That process only prolongs this case, which began in 2001, when plaintiffs first proposed the residential development plan, called the Smith Farm Project. But the local planners rejected the application, finding it did not comply with zoning rules. So the developers sued in federal court under the Fair Housing Act, which prohibits religious discrimination, among other things.

Under the case law, before a case like this can proceed in federal court, you have to go through the local planning process. Once you get a final decision from the Zoning Board of Appeals, you can then file in federal court. That exhaustion requirement is excused if the process will prove futile, or a waste of time, because the decsionmakers have already indicated they will reject the project. But proving futility is quite difficult. 

Plaintiffs did not bother with the Zoning Board of Appeals because, they said, such application would have been futile based on the Village Planning Board's having "made clear" it would "refuse to consider any amendment to its conditions on the Smith Project approvals." The Court of Appeals (Sullivan, Parker and Lee) disagrees, holding the record actually shows the Village Planning Board workshop minutes "demonstrate that its members were actually considering BMG's request for a variance, albeit with some initial skepticism." That skepticism does now show the planners were digging its heals and making it clear that it would deny all variances. Expressions of doubt are not the same as putting the kibosh on the project before the application is even filed.