Desperate Impact

It’s one of liberalism’s most cherished tenets; “If you define what’s “for everyone’s good”, and force people to do it on pain of forfeiting property and liberty, nothing bad can happen”.

The City of Saint Paul – which is such a one-party state that North Koreans feel sorry for us St. Paul residents – has been practicing that bit of preaching for a couple of decades now.

Like most liberal-dominated cities, Saint Paul has for decades used its poorer neighborhoods – the lower East Side, Frogtown, the North End, and the pre-gentrification Selby-Dale, all formerly decent working-class neighborhoods that were gutted by other liberal, interventionist policies like “Urban Renewal” and the drilling of interstate freeways through the vacuum of political clout from which they suffered – as “warehouses for the poor”, convenient places for the DFL-run bureaucracy to put public housing and the welfare recipients who live in it.

Property values eroded by the freeways and the bureaucratic attention, property owners fled to the ‘burbs, leaving lots of property available for people to snap up at bargain-basement prices.  Which led to the city’s plague of “absentee landlords” in the eighties and nineties.

As often happens in neighborhoods blighted by liberal policy, crime rose.  Minneapolis’ Phillips and North Side neighborhoods, along with Saint Paul’s neighborhoods (and the remaining shards of unfashionably-black Rondo, which was almost completely wiped out by I94), with the departure of the people who’d made the neighborhoods ticked, fell into blight, decay and crime; as the “war on drugs” gave those people an outlet for their suppressed and unfashionable entrepreneurship, the crime wave grew big ugly teeth.

The City of Saint Paul decided to fight back by…attacking the “absentee landlord”.  The number of private, small landlords in the city – people owning less than ten rental units – dropped from thousands in the eighties to, by some estimates, hundreds today.

Crime didn’t abate – although it didn’t swell by quite the same numbers that it did in Minneapolis.

And so in the early 2000s, the city took another approach; fighting all landlords.  Thanks to eighties-era regulations, it’s very difficult for landlords to evict problem tenants, or do much of anything at all about them.  Nonetheless, the city discovered that it was simpler to go after “problem properties” extrajudicially, using the city’s Department of Safety and Inspections, than via using the police.   Landlords who objected were smeared as “slumlords” by an elaborate and extensive whispering campaign by city-government-affiliated DFL activists – sometimes accurately, often not, and in context a fairly shabby defamation.

And in 2004, a group of those landlords sued the city.  In Magner v. Gallagher, the landlords’ lawyers argued the theory that the city’s efforts had a “disparate impact” on the poor – which, indeed, they did.  Saint Paul’s policy – demonizing landlords – was precisely the same one at a policy level (and in most of the mechanics) that has made places like Manhattan, Boston, Philadelphia and Washington DC such idyllic places to be poor.

“Disparate Impact”, of course, is one of the tools by which the Johnson-era federal bureaucracy has browbeaten banks, cities and landlords.  The Wall Street Journal gives a brief history lesson on the subject (emphasis added), which includes the fact that the theory is alive and well…:

The Justice Department started a special unit in 2010 to pursue disparate-impact claims, which don’t require proof of intent. Lower courts have loosely interpreted the Fair Housing Act to allow for disparate-impact analysis, which ignores other factors that affect lending decisions.

Bank CEOs have tended to settle these cases rather than risk bad publicity, and Justice has pocketed the cash to distribute to its political allies. The Department of Housing and Urban Development is also pushing a new rule to codify disparate-impact analysis under the Fair Housing Act, and the Consumer Financial Protection Bureau is making such lending enforcement a priority.

…which ends in the fact that now, Saint Paul is the big bad banker.  The 1%er, the Daddy Warbucks on the wrong end of a “Disaparate Impact” suit.

If Saint Paul won the case – which has burbled up to the Supreme Court over the past eight years – it would weaken the use of “disparate impact” as a tool to blackmail and browbeat banks and the private sector.

And so the Obama Administration stepped in and pressured Mayor Coleman to drop the city’s response to the lawsuit:

St. Paul released a statement Friday saying it “likely would have won” at the Supreme Court but that “such a result could completely eliminate ‘disparate impact’ civil rights enforcement, including under the Fair Housing Act and the Equal Credit Opportunity Act. This would undercut important and necessary civil rights cases throughout the nation. The risk of such an unfortunate outcome is the primary reason the city has asked the Supreme Court to dismiss the petition.”

To sum up: St. Paul has spent taxpayer money for almost a decade fighting a case to force slumlords [See?  The city’s PR campaign made it all the way to the WSJ!] to provide the poor—including minorities—with better housing. But just as it was on the cusp of what it claims would have been a victory at the Supreme Court, the city withdrew its appeal under pressure from the Obama Administration and liberals who feared they might lose a weapon of dubious legality that they want to use to tell banks how and to whom to lend.

The piece concludes:

It’s enough to recall the old joke that liberals love the poor in theory—it’s the actual poor they have a problem with.

The poor are just another tool by which the left achieves and maintains power.  When they’re of use, good for them.  When they’re impediments, the join the Constitution, liberty and genuine fairness under the bus.

If there is a case that spotlights the cynicism of the American left at all levels better than this, I’d love to hear about it. 

Bob Johnson at the A Democracy blog has been covering Saint Paul housing issues, and especially Magner v. Gallagher, long before anyone else could figure it out.  He’ll be covering it long after they leave.

3 thoughts on “Desperate Impact

  1. The Supreme Court renders final verdicts. The Court of Public Opinion is far more pliable.

  2. When I first learned that “disparate impact” was used as a tool to persecute lenders I was shocked. It’s the ultimate “correlation equals causation” BS. Worse, it makes a person or institution “guilty until proven innocent”, with no possible way to prove their innocence. All they can do is pay off the persecutor in the hope of being let alone.
    An analogy: Suppose you were a landlord with a rental unit and had only rented to white tenants, because only whites had ever applied to your rent your place. A city official stops by and tells you that, statistically, you should have had at least one minority family rent your place. You stand accused of housing discrimination. How can you defend yourself? You aren’t accused of any specific action that you can prove you didn’t do (or they can prove that you did).
    No wonder the JD doesn’t want the Supreme Court to consider this case.

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